The Value of “For Sale” and “Sold”

Understanding the value of your home is very difficult. More so at this point in time as we are experiencing some serious price increases.
 
On a very recent open day, on a nice property in Greenwich, we received many offers and had to go to sealed bids to fairly assess the winner of the property.
 
This property sold for 40% over the full asking price to a cash buyer – yes 40% – which is remarkable (and dare I say unsustainable) albeit great news for anyone looking to sell at this point in time.
 
So how do people possibly understand the value of their property?
 
I am going to look at two possible ways, the first against properties on the market for sale and the second based on properties that have sold.
 
Properties on the market For Sale
 
When considering the value of a property prior to putting it on the market, many vendors understandably look at the asking price of other properties currently on the market locally, and draw pricing conclusions based on this research.
 
Whilst this is not an unreasonable way of determining value, there are some traps to look out for.
 
Firstly, an important observation is that if a property is on the market, it is by definition “unsold”. And an unsold property is invariably one that is overpriced. If it had been priced correctly then it would have sold, but in any event the market has rejected it and it will probably now only sell if the price is reduced. So if you have a similar property and you price it at about the same level as the unsold property, then the chances that yours will remain unsold too.
 
We know that purchasers buy by comparison.
 
So, your property has to compare favourably when seen alongside others on the market. If your property is similar to another on the market nearby, then yours only becomes readily saleable when it is priced favourably and offers better value for money.
 
Additionally, if you feel that your property is slightly better than a neighbouring property for sale (as you are bound to as you chose the décor and it has your possessions in it) then surely it makes sense to quote a similar price, rather than attempting to offset the extra features with a higher price.
 
Ultimately, correct pricing is all about seeing the world through the eyes of the buyer and making responsible and effective pricing decisions which always point to offering better value than that offered by competing properties available locally.
 
Properties which have actually sold
 
When considering what asking price to quote, common sense dictates that the price of other homes which have sold locally could be a good indicator of the price you should be quoting. However, your research could well prompt you to price your property at a level which could under- or over-estimate your optimum sale price.
 

 
Irrespective of national trends, the property market is very sensitive to imbalances in supply and demand even on a street by street basis. When there are many qualified buyers all seeking a rarely-available house in a popular street the price goes up. If fate dictates that the following week five such houses become available in the same street, the price will inevitably fall.
 
Likewise there can be situations where a property is sold at a record price to an individual who particularly wanted a specific property for personal reasons. Conversely a situation could arise where a desperate seller, who might otherwise suffer repossession, agrees a sale at a very low figure for a quick sale.
 
Only the estate agent involved in any of these transactions knows how the individual circumstances of sale can affect value.
 
So a word of caution – leave the science of valuation to an experienced local estate agent who is highly active in the market and has a good track record of achieving swift sales at or close to his/her suggested asking price.
 
What to look for when choosing an estate agent
 
Understandably many people see estate agents as all the same. You instruct them, they come and take some photos, stick the property in their window – and on some web portals – and it will sell?
 
Yes, the above does have some truth in it, but I can guarantee if you want to achieve the maximum value for your property there is so much more science than this.
 
I will give you an example.
 
A developer on 7 new build apartments on Trafalgar Road recently instructed the team at Conran Estates in Greenwich. There were two local estate agent companies instructed in order to get as many prospects along to an open day and secure as many offers as possible. Anyway, the great news for us is that we sold all 7 apartments.
 
This was by no means luck and here’s an explanation why.
 
When we are instructed to market a property we are given the job because we are marketers and not the stereotypical estate agent. The following are a few ways we typically set out to sell your property;
 
– We ensure that the photography is both to professional standards and professionally edited (within legal limits of course)
– Our in-house designers create a great looking glossy brochure with a nice 3D floor plan
– We speak to our (many) existing landlords and tenants along with many pre-qualified applicants
– We use social media to showcase our brand (and properties) because that is how a lot of people shop these days
– We market the property in various lifestyle magazines along with our own in-house magazine.
 
In fact, no expense is spared and we certainly do not advertise cheaply as our job is to get the maximum a property is worth in the market place at any one time. Of course, we do this really well.
 
With three local offices in Greenwich Borough – staffed by people with great knowledge & interest in the area’s they serve – if you think you could be in the market for a move we are sure to be able to help.