Key Post Selling house - setting asking price

brandaan

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I'm currently selecting an agent for an executor's sale. I am getting contradictory advice from two agents: one advises to set the asking price low in order to get as many people through the door as possible; the other advises to set the price high and and to encourage offers.
The sale price desired by the estate sits between the two extremes of the respective asking prices. Any thoughts on the forum what the best strategy is based on recent experience?
House is located in desirable location in South Co Dublin, where there is a shortage of supply.
Thanks for any feedback.
 
How far apart are the two figures? And what are the figures - ball park? If they are for example €300,000 and €475,000 then I can see the difficulty. If they are €300,000 and €320,000 then not so much...
 
I don't think the asking price makes a great difference so long as it is in the right ballpark. It is ultimately potential purchasers who decide the selling price.

I'd be influenced by other factors as well as the agent's pricing strategy. Things like:
- Are they prompt in responding to you?
- Do they have a portfolio of properties in the same market segment as yours?
- Do you know anything about their reputation?

All other things being equal (or equally unknown to you) I would think that the agent who wants plenty of people through the the door is prepared to put more work into the project.
 
The difference is 365k vs 495k so huge difference, thus my conundrum. Other agents were suggesting asking prices between 400 and 450...
 
If I were in the market with a maximum price of about €425k, an asking price of €495k might kill my interest in a property.

It's unlikely that an asking price of €365k would deter me. There is the small possibility that I might wonder if there was something wrong if the price were out of line with comparable properties.

You are free to over-ride an EA's advice and set the asking price yourself.
 
If I were in the market with a maximum price of about €425k, an asking price of €495k might kill my interest in a property.

It's unlikely that an asking price of €365k would deter me. There is the small possibility that I might wonder if there was something wrong if the price were out of line with comparable properties.

You are free to over-ride an EA's advice and set the asking price yourself.

Thanks, and agreed.
 
The difference is 365k vs 495k so huge difference, thus my conundrum. Other agents were suggesting asking prices between 400 and 450...

So you've 4 prices there. The mean of that is 427. I'd go with an asking price of 430K, and pick the agent you like. They are all the same.

Have you looked up the property price register to see what comparable properties are selling for.
 
So you've 4 prices there. The mean of that is 427. I'd go with an asking price of 430K, and pick the agent you like. They are all the same.

Have you looked up the property price register to see what comparable properties are selling for.

It's not the price I'm concerned about (I think it will end up getting the same price regardless) - it's picking the right agent - which one has the most sensible strategy and will work hardest for their commission.
 
I'd rule out the ones that gave the highest and lowest valuation. My reasoning would be that, in my opinion, the one that gave the lowest valuation may be looking for a quick sale and quick commission as opposed to getting you a good price. The one that gave the highest valuation may be just looking to get you on their books by giving you a high valuation and, a few weeks down the line when there's no interest, suggesting you drop the price.

For the above reasons, I'd choose one of the other two agents - whichever one seems to respond to queries quicker.
 
I disagree with the idea that the initial asking price does not affect the final selling price.

In a context where properties are difficult to sell, the strategy of setting the price low and getting people interested can work. If you can get even two potential buyers involved, they have seen the property a number of times, they may have had a survey done, the price may well advance beyond a medium level.

After all if they like the property they won't walk away for a few thousand more.

On the other hand in a market where prices are rising, especially with a house type that does not have a lot of supply. The strategy of saying these houses are not worth that low price they were selling for in the past, they are worth this new unexpectedly high price, may well work.

If you are not in a hurry to sell, I suggest trying the high price approach. A desirable location in South County Dublin, could well achieve a breakthrough price, if you are brave enough to ask for it.
 
How to set the selling price for a house?

I started a separate thread, not realising that this one existed - Brendan

A friend of mine is selling his house, and the auctioneer valued his house at between €425k and €450k. My friend is hoping for €450k and will probably wait for that price. The auctioneer strongly advised setting an asking price of €395k "to generate interest and viewings".

This seems the wrong strategy to me. The house should be relatively easy to value as others in the area have sold recently. One can value the house by adjusting for the condition and then maybe adding a bit for house prices since.

It seems to me that people will be reluctant to pay €55k or 14% over the asking price.

If it's put on the market at €425k, people might expect to pay a bit more and may well go to the required €450k. There is no advantage to the seller in having people looking for a bargain at €395k who can't go over €400k traipsing through his home.

I wonder if the auctioneer is setting a low price to generate lots of viewers whom he can then direct to other houses in their price range?

Or is he trying to reduce the client's expectations to facilitate a quicker sale?

Do different auctioneers have different strategies? Some set the asking price below and others set it above the price expected.

From looking at daftdrop.com , there seems to be more reductions in asking prices than increases.
 
I think that my own strategy would be to ask for €450k. It's more honest with people. I am saying "If I get an offer of €450k and no higher offer, I will sell it at that". This would be a true asking price.
 
Your friend has taken the higher end of the valuation as gospel.

My own view is that most people don't set realistic prices at the beginning, hence the drops you've noticed.

But the auctioneer is in a bind. If he comes in too low on valuation, another auctioneer will get the business.

It is these two competing interests that is at play here.

I imagine the house is actually worth around the 425 mark. And setting the price under the 400K is a psycological trick, like the 9.99 thingy.

It will bring in more viewers, and hopefully a bidding war, and people, if they really like the house, they maybe stretch a bit further.

Sellers can set a price in their heads, and will look at houses in that range, but not higher, and then go further, there's always a secret bit held back, when they see the right house.

That's my twopence worth.
 
Well in Dublin different estate agents deal with it differently. Some set a low asking price to bring in loads of people and hope to get the bidding starting, others ask on the high side near where they want to finish.
I saw one asking on the low side, well we didnt think it was very low but it went for 100k over the asking in less than a week!! it was a good, but not amazing, house in a nice area. Another around the corner was asking 50k higher than the first and there was no interest cause it was probably asking too much and the house wasnt as nice.

So who was right here?

If it was a good house I'd go for the higher price, you get very sick of viewing houses that you know deep down will go for way over what they are asking. On the other hand we were slightly wary of houses that were priced very high as at the back of our mind we wondering if they will go for way over that.
 
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On the other hand in a market where prices are rising, especially with a house type that does not have a lot of supply. The strategy of saying these houses are not worth that low price they were selling for in the past, they are worth this new unexpectedly high price, may well work.

If you are not in a hurry to sell, I suggest trying the high price approach. A desirable location in South County Dublin, could well achieve a breakthrough price, if you are brave enough to ask for it.

A very good point. The strategy depends on the demand for the houses. My friend's house will have a queue of potential buyers, so I will suggest setting a high price.
 
I think if you set a price that is too high initially you potentially kill any downstream interest in the property.

Brendan - in your friend's case, the reason the agent suggested 395 is so it would fall into the 0-400k search bracket on MyHome. The vast majority of buyers set specific budgets on internet searching, yet can stretch a bit further when they find the property they like... hence I would recommend this strategy and once bidding commences the original asking price becomes irrelevant.

I just recently went sale agreed on a house. that I was selling (an investment property bought in 2006 :eek:)
I honestly hadn't much idea on what we might get for it, but hoped to get around 175k.

When agent reviewed it prior to putting it up for sale, he thought it might fetch 200k in the right conditions, but recommended setting 180k as asking price.

We had a lot of interest and subsequent bids, and within 2 weeks of it going up we had gone sale agreed at 211k. I was delighted as I needed to get rid of it this year (to realise CGT loss!). Contracts all signed now, but I am delighted that I followed agent's advice.

Similar house was put up a couple of months before in same area at 200k and is still up even though price has been cut in the interim..
 
A very good point. The strategy depends on the demand for the houses. My friend's house will have a queue of potential buyers, so I will suggest setting a high price.

Again I would think generating interest and bidding war is key. A colleague of mine had a very desirable second house in a very desirable part of a very desirable part of South Dublin. Still up for sale 4 months after he put it up. He's missed the boat to some extent. He had only 2 viewings...

I have seen agents increase the asking price where demand suggests that it is priced too low - with no downside. It is very difficult the other way around to re-generate interest in a house that has been on the market for a while.

Just my two cents
 
We had our house valued by several agents recently. There seemed to be two schools of thought...

1) You start a bit lower than you want to achieve in order to get early bids in and to get a bit of competition going.
2) Start with a more honest expectation and asking price closer to what you actually want to achieve - as people hate to view a house at, for example €395k only to find the vendor really wants €440k.

We were also told that if you pitch too high - above what comparable houses are achieving then potential buyers expect the wow factor when they arrive. If they don't get it then they won't feel the house is worth the asking price. Probably the worst thing that can happen is that you need to reduce the asking price as then it looks like there is a lack of interest/ or something wrong with the house.

When I view a house myself I can handle the idea of an increase over the asking price but only within a certain amount/percentage. If it goes above that threshold then I start to think it's overpriced and bad value. 10-15% above the asking starts to feel overpriced to me (even if it actually isn't compared to other houses). The initial asking price does have an impact on the eventual price you can achieve I think.
 
Tell the agent recommending the €495k that his entire fee depends on getting at least €495k. If he doesn't get this, he doesn't get paid. See how serious he is about his recommendation.
 
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