The price is right – how to decide the best asking price11/05/20
What is an asking price?
An ‘asking price’ for a property or piece of land is also known as the ‘listing price’, as it is ‘listed’ at a certain price in order to attract buyers.
Picking a sensible asking price is critical as it serves as the benchmark for negotiations between the seller and the buyer.
How is an asking price decided?
The key to calculating this is usually through surveys, appraisals and market analyses of asking prices of local comparable land or properties and the prices from recent sales.
The asking price will also depend on how quickly you need to sell; if a quick sale is needed, then asking prices can be lower.
There is the temptation to over-price a house, which can make the time for an ‘offer price’ to be made quite protracted.
Asking Price: The value a property is marketed at.
Offer Price: The value offered by both by and seller during a negotiation.
Sale Price: The value both buyer and seller are prepared to transact the deal at.
Asking price vs offer price:
Buyers often hope that their lowest ‘offer price’ will be considered and accepted while a seller is entitled to hold out for a value that is different from the marketed asking price.
Asking price vs offer price vs sales price:
Sellers will, of course, want to obtain the maximum ‘sales price’ for their property or land, but in many cases, buyers and sellers will negotiate through counter-offers until a final sales price can be reached and agreed upon by both parties.
Both sides need to understand that an independent valuer’s opinion of value is based on average market conditions, a reasonable period of marketing (this is normally 2-3 months for a residential house) and excludes special purchasers. It is not unusual for a valuer’s opinion of value to differ from the sale price and as long as the two figures are close then there is no reason for the agreed sale price to be altered.
What comes next?
Whether you are a seller or a buyer of a property, you should consider the benefits of a home buyer report survey.
If you are looking to buy, it is essential to knowing the condition of the property, as any issues can offer the chance to negotiate a fairer price.
If you are selling, a survey can help you secure and protect the sale, or enable you to undertake remedial works before selling the property.
Ask the professionals
We offer an RICS-approved Home Buyer report service, which provides a detailed and accurate property ‘health check’, giving you the peace of mind to having your ideal price accepted on a residential property.