Setting the asking price on a property - lessons learned

T

TimothyC

Registered User
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Hi all,

My sister sold her house last week (well unconditional contracts signed).

I told her to be very realistic about her asking price. Peak was 600k in the area in '06 so she set it at 380k. My advice to her was terrible.

Lots viewed the house and all made offers well below the 380k. 330k being the highest. Very disappointing.

So, she took the property off the market and started again 1 month later. This time, she set the price at 450k. Property went sale agreed for 412k within 4 weeks and went unconditional last week at 408k.

Big lesson learned. Vendors, keep your prices as high as you can.

T.
 
TimothyC said:
Big lesson learned. Vendors, keep your prices as high as you can.

T.
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Congratulation to your sister, i bet she is over the moon to be 'contacts signed'. But in fairness yours is one case and where did you get the 380k figure from?

Its quite simple for venders who want to get a fast sale, look at what houses are going for in your area. If a similar house has been on the market for a long time, then you need to price your house cheaper, no interest after awhile then drop a bit more and so on till you get a sale.
You've made a fairly sweeping statement and one example does not mean a market truth, especially one that goes against the whole market in general, isn't there something like 40k houses for sale on daft.ie? what would your advice be to them? raise the price more and the buyers will flood in?

I've said it all along, there are buyers out there and if you want your house sold then you only have to be realistic.
 
Hi,

Yes it is correct to be realistic with your price for selling but if you put your house up for E100,000 no buyer is even going to offer you that they are going to try and get it for as little as possible so you would have to put your price at perhaps E130,000 to E140,000 to get your E100,000 if that is the least amount of money that you can accept.

Angela59
 
So in reality your sister sold at 30% below peak (2006) price. And then included in that was an asking price of 10-15% above what she eventually sold at.
 
TimothyC said:
Hi all,

My sister sold her house last week (well unconditional contracts signed).

I told her to be very realistic about her asking price. Peak was 600k in the area in '06 so she set it at 380k. My advice to her was terrible.

Lots viewed the house and all made offers well below the 380k. 330k being the highest. Very disappointing.

So, she took the property off the market and started again 1 month later. This time, she set the price at 450k. Property went sale agreed for 412k within 4 weeks and went unconditional last week at 408k.

Big lesson learned. Vendors, keep your prices as high as you can.

T.
Click to expand...

I think it's simply a lesson on the continued laziness of buyers and the advice they receive. There have been countless threads on this site where someone says they are planning to bid on a house with an asking price of €X. No other information is given and straight away people who believe they are experts (why else would they offer advice on a financial website) jump in and recommend and offer of Y% below the asking.

In your sister's case many typical posters would have recommended an offer of €300k based on the initial price and €360k based on the reset price, a €60k difference!

There is no strict science behind setting an asking price, these days it is no guide whatsoever. The only way to get an feel for an appropriate offer is to get involved in the bidding on a number of similar properties in a similar area
 
By pitching the price at 380 you only got people who view in the say 350 to 400 bracket would be my take on this. When she priced at 450 she got those who could afford between 400 and 450 (the max 450 based on nobody, I think, currently paying more than asking). Stamp duty threasholds can also have an effect.
 
DerKaiser said:
I think it's simply a lesson on the continued laziness of buyers and the advice they receive. There have been countless threads on this site where someone says they are planning to bid on a house with an asking price of €X. No other information is given and straight away people who believe they are experts (why else would they offer advice on a financial website) jump in and recommend and offer of Y% below the asking.

In your sister's case many typical posters would have recommended an offer of €300k based on the initial price and €360k based on the reset price, a €60k difference!

There is no strict science behind setting an asking price, these days it is no guide whatsoever. The only way to get an feel for an appropriate offer is to get involved in the bidding on a number of similar properties in a similar area
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You are talking about threads on here about what buyers should offer and the OP is talking about what sellers should set as advertised prices. Two very different things, a seller has the luxury of refusing an offer they dont accept, in the hope of getting more. Once they do get an acceptable offer they are "finished" with that asset, future value is irrelevant. The buyer has to consider having this asset for years to come and has to factor the future market into the offers.
With no market stability on the horizon, buyers should be offering what they think the house will be worth in the future. If that's much less than asking, so be it. Sellers can say no if they choose.
 
"Property went sale agreed for 412k within 4 weeks and went unconditional last week at 408k."

What does "went unconditional" mean?
Does this mean she now has sold the house? The original sale agreed offer having falling through?
 
moneygrower said:
"Property went sale agreed for 412k within 4 weeks and went unconditional last week at 408k."

What does "went unconditional" mean?
Does this mean she now has sold the house? The original sale agreed offer having falling through?
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Dont know the case, but the offer may have been put in "subject to survey" that survey then brought up something that will cost €4k (+/-) to fix, so the offer is now €4k less but the condition of survey has been passed.
It would still be sale agreed until contracts are signed, but at least its a step in the right direction.
 
Well, I'd say the OP should wait until the house is actually sold before jumping to conclusions.
 
The fact that there were offers above the previous asking price shows there is some merit to what the op says but there is no blanket approach to be taken to the property market. Some posters lately have been saying that 40% below 2006 price is where offers should start but in Limerick for instance that is so far off the mark it is unreal. There is often too many giving advice on how low to go with very little info at hand that it corrupts the view of the op and does them no favours at all.
 
People can only offer that is within their remit surely they are not going to get into debt now that the economy is in so much trouble... If a person likes a property and they have no financial problems paying the mortgage or the other responsibilities that comes with home-ownership then go ahead with the sale.

People will make offers of course but will they go ahead with the sale also as everyone know a sale is binding until a contract is signed.
 
I will only buy when I feel some of the fall yet to come is already priced in, not just the fall that's already happened. Obviously I don't expect to get bottom prices now but I do expect to get the house for significantly less than the current rate. Otherwise I wait.
 
Joody1 said:
..surely they are not going to get into debt now that the economy is in so much trouble... .
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Strange logic this - I would have thought that now that the economy is in trouble people are more likely to get into debt?? Eg. negative equity following house purchase, loss of jobs, pay freezes, reduced hours, etc, etc.
 
Yeah, maybe everyone that is currently trying to sell their house should just raise the price. That should do it alright! Not like there isn't a shortage of houses or anything. I think the OP is telling porky pies to be honest. But it is good for a laugh!
 
Jeez, that person who bought at 408K will feel really stupid if they ever do an internet search!
 
Lord Snooty said:
I think the OP is telling porky pies to be honest.
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I don't.

If, for example, a prospective buyer is searching on line, many will set their criteria (area, minimum number of bedrooms, property type) to include minimum prices as well as maximum. So it can easily be that in setting a lower price than the market "expects" you're actually filtering out some of your potential viewers / buyers. The same, of course, applies to setting an unrealistically high price.

I think what happened to the OP's sister was a combination of setting the price below market expectations of what the asking price would be, and buyers taking the "Well, everyone offers 20-30% under asking" approach, which may be unrealistic depending on the property and the reasonableness of the initial asking price.

Before anyone jumps on me to say "No buyer sets a minimum price" / "No buyer starts their searches online" (both of which are statements I've seen made very assertively)... you're wrong. That's precisely what I did last time I was house-hunting, although at that point it was still in the realm of most houses selling above asking.

Buyer expectations have now changed, and a buyer with €450k available may very well set €400k as a minimum and a max which could easily be €600k, with the expectation of paying less than whatever the asking price is.

I think the lesson from the OP's story is that realism has to be tempered with strategy. If you want to sell, set your price below comparable properties in the area but not so substantially below that someone will either miss it entirely or will assume that there's financial desperation behind its being so much cheaper, or issues with neighbours or the structure of the house.
 
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