What is an asking price?
When purchasing a property, many buyers become fixated on the asking price and this is absolutely the wrong thing to do, especially in the current market. Remember that an asking price has been decided by the seller or the estate agent, and in many cases, is not reflective of what the property is actually worth.
We’re seeing many pricing strategies in this market. Some properties are priced in line with the current market with a view of it selling at the asking price, and other properties are priced opportunistically where the seller is willing to try their luck with a higher asking price to see if anyone will pay up.
Over the past six months, we’ve also seen many properties being priced very low in order to attract a lot of interest from buyers and spark a sealed bid situation. This is becoming increasingly common, and is sometimes coupled with the property being launched via an open day.
In these cases, buyers are typically held back and only allowed to view during one or two particular viewing slots. During these viewing slots, buyers encounter their competition and it can be a really unnerving experience as they get a sense of just how many other buyers they will be competing against. On top of this, if the asking price is very low, the property will usually go to sealed bids within a matter of days, with offers much more than the asking price. In one case for a client, we were bidding on a house against 14 other buyers. We’ve seen properties go for more than £400,000 over asking price in some sealed bid situations.
Because of the different pricing strategies used in the market, don’t become too fixated on the asking price or you can miss out. You need to focus your attention on what the property is actually worth in today’s market, and also what it’s worth to you. Bear this in mind when searching for a property online, too; widen the price bracket you’re searching in as you don’t want to miss out on properties deliberately priced low, or those which are priced high but with room for negotiation.
If you have a question you’d like Jo to answer please email enquire@eccord.com or tweet her @joeccles.