As property professionals, we are called upon a lot to make valuations for people who are looking to sell their home. And, as part of this free, no-obligation service, we are often asked why some houses are being valued at a different price to that of the valuation we have provided.
In this guide, we hope to answer this common question and clear up a few facts about the difference between a marketing price for a home and a sale price.
What is a Marketing Price for a Property?
Also known as the ‘asking price’, the marketing price is the value a property owner decides to place upon their home for the purposes of advertising. It is usually based upon a valuation figure that an estate agent or other property professional has given a home.
You can find out more about how an accurate valuation is calculated in our feature guide, ‘How to Get an Accurate Property Valuation’.
In short, an estate agent should come up with a value for your home based on actual and recent sales figures for your area which is adjusted for market trends and the accommodation offered by your home in comparison to those that have sold.
Once a valuation has been prepared, it is ultimately down to the homeowner to decide what figure to use for marketing. Often, if an estate agent has provided a guide figure of (for example) £450,000 to £460,000, then it is likely that the homeowner will opt to use the higher figure for marketing purposes.
What is the Sale Price for a Property?
The sale price, often referred to as the ‘achieved price’ is the actual figure that your home is sold for. It reflects the value of the transaction as recorded by the Land Registry and is the figure which is used by sites such as Zoopla and Right Move when you look up the historical property price details.
Why is There a Difference Between a Marketing Price and Sale Price?
There are plenty of reasons why there may be a difference between the price for which a home is marketed at and the eventual price for which it is sold.
At one end of the scale, it is not uncommon for some estate agents to overvalue a property with a view to securing the business because a homeowner wants to secure the highest value for their house. In these circumstances, it is typical that a house will languish on the market for some time before the price is inevitably reduced and sold for far lower than the initial ‘valuation’.
This kind of practice is not recommended and ultimately leads to delays in the sale of your home and even the estate agent may lose out themselves in the long run.
Sometimes, a property owner who has been on the market for some time may ultimately accept a lower offer on their home in order to proceed with a sale. This can happen if they have found another property and don’t wish to lose it. In these circumstances, a cash (or chain-free) offer that is lower than the asking price may be more tempting than waiting around to realise a greater profit on their home.
At the opposite end, there are some circumstances when the marketing price may be exceeded by the sale price. This is more likely to happen when homes are valued accurately and a property is viewed, and liked, by several potential buyers. In a situation where there are multiple parties interested in a home can result in a bidding war.
What Price Should You Market Your Home For?
Whilst every property owner wants to achieve the best sale price for their home, this does not always mean that the price your home has been valued at is what it is actually worth.
It all boils down to the trust you are placing in that magical figure that has been offered to you by a property professional.
It is always recommended that you seek a second (and even third) opinion on the value of your home before you decide to settle on a marketing price.
What Price Should You Sell Your Home For?
When it comes to accepting an offer, the homeowner is once again in the driving seat and there are many factors that can influence what price you accept for your home.
If you have placed an offer on another property then a quick sale of your own may be the motivating factor over what price you take.
Likewise, it is worth having access to an estate agent who can guide you on the current (and predicted) market conditions for your area so you can judge for yourself how fair an offer is. Property prices fluctuate all the time and if your home has been on the market for several weeks (or months) then the offer you get may well be fairer than you initially think.
At the time of writing this feature, Land Registry records and Zoopla listings data reveal that homeowners could expect to receive an asking price of 96.3% of the marketing price over the last 12 months. However, this figure was higher in 2018 and varies by region.
If your property is listed in London, for example, then the prices accepted versus the original asking price could represent a disparity of more than 5.5%. Whilst in Edinburgh and Glasgow, the reverse is true and homeowners can expect to achieve a sale price of over 6% and 5% respectively.
Selling Your Home With Property Assistant
Whilst Property Assistant prides itself on providing accurate valuations for clients, we welcome the opportunity to compare this with other professionals in the area. We know that our fees and services come highly recommended so that you can put faith in our ability to secure you the best sale price in the shortest period of time.
Ask us for a free and no-obligation valuation of your property today and let us provide you with an accurate (and achievable) price for your home. Our clients know that we put their interests first so let us help you get moving today. Call us on 0118 912 2370 for further information.
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