What is Pricing to Entice?
Pricing to entice is essentially putting your property on the market at a realistic level that will attract serious home buyers.
Why do this?
Time and time again, estate agents advertise properties for significantly more than what they’re actually worth.
This results in homeowners needlessly waiting for months on end to sell.
Advertising your home in line with actual sales conditions creates a healthy environment that allows the market to do the talking.
You get the right price and your property does not linger on the market unsold.
What’s the risk?
A slightly controversial topic, some argue that sellers get short-changed.
Although there is an element of truth in this, we argue that the opposite is often true.
At Property Solvers, we often see over-optimistic sellers taking a worse hit on price.
Pricing to entice means that you’ll attract well-positioned buyers that want to make genuine offers.
What’s more, you’ll benefit from the power of crowds to get a quick and efficient sale of your property.
Estate Agents Want Your Business…
When you’re about to put your house on the market, the general guidance is to ask 3 estate agents around for a valuation.
In most cases, the agent will not be professionally qualified in the same way as, say, a surveyor would be.
You’ll probably get a price based on what he/she is feeling rather than on real data.
Within the industry, it’s commonly known that estate agents don’t win instructions by telling the truth.
Many will visit your property mindful that they’re in competition with other agents.
With this knowledge, they’re more than likely to give you a higher suggested asking price to raise your expectations.
It’s easy to be influenced by the most favourable house valuation.
Who wouldn’t be?
This is often the most valuable thing you own. You’ve put your heart and soul into maintaining it.
What’s more, nobody wants the embarrassment of ‘seller’s remorse’ down the line.
Estate Agents that Over-Promise, But Under-Deliver
Some agents may also tell you that there will be buyers clamouring to make an offer – sometimes over the asking price.
This is very apparent in the online estate agency industry, where agents are not incentivised to actually sell your property.
They pocket their commission the moment your property is listed.
So how can you see what’s what and ultimately make the smartest / best decision?
The good news is that it’s never been easier to do this for yourself…
Price to Entice – Case Study 1
Our client wanted to sell up to release the money to buy a houseboat and was keen to get a quick sale for the best possible price.
We knew the demand for houses like this is popular amongst growing families – particularly as there are excellent schools, parks and other amenities close by.
As ever, we used recent sold prices (via the HM Land Registry) to provide the vendor with a realistic suggested asking price.
This was based on other properties of similar spec, size and condition within 1/4 mile. We always do our analysis on a price per square foot basis.
The vendor took our advice and speaks further about the process in the video below (from outside his new houseboat!). His review is also underneath…
How to Price Your Home Correctly
A science, as it’s reasonably easy to access evidence of sold house prices so you can see how yours compares.
An art, as every property is different. There are many factors that come into play that are difficult to pinpoint.
Psychology and emotion can also have a major impact.
For instance, we’ve seen viewers ‘fall in love’ with properties and almost ignore the price. They’ll do whatever it takes to get it.
How Much is Your House Truly Worth?
The most trustworthy data source for house prices, by far, is the HM Land Registry.
It’s here where you can see sold house prices, uninfluenced by estate agents’ commercially-led bias.
Our post on how to value your house goes through the FREE online tools you can use to get the information you need.
Of course, things are not that simple…
In most cases, you cannot just do a ‘like for like’ comparison.
There’s a range of variables, that could mean that your house is worth more – or sometimes less – than the others…
Here are some questions worth asking when doing your research…
- How big is your property compared to neighbouring homes? You can check on the EPC register or asking Property Solvers for a free house valuation report. Generally, if it’s bigger, you can certainly push up your asking price;
- How big is your garden? If your property is larger than the others on the street, then you can usually fetch more. South-facing gardens are also considered very desirable (you can check whether yours is by zooming out on Google Maps);
- Do you have a driveway and/or a garage? If your neighbours don’t, then this is definitely a plus point;
- Have you spent money on the house – say a new bathroom, kitchen or even a full renovation? Or, perhaps you’ve upgraded your property’s security features, investing in a modern apartment building intercom system, CCTV surveillance or smart tech features? Remember to have look at images of other properties that have sold on Rightmove to see how yours compares;
- Have you had an extension, conversion or conservatory installed? If your neighbours haven’t, then you can definitely ask for a higher price;
- Does your property have scope for development (such as extra land or potential to extend at the rear or into the roof)? Although how much you can add to the asking price is open to debate, it’s definitely something your estate agent should highlight in the marketing;
- Related to the above, check whether your property has Permitted Development Rights (PDRs). This would mean that there’s no need to get full planning permission to extend and/or convert. This is a major plus point;
- Does your property have any interesting features that would appeal to buyers? For example, many like Victorian and Edwardian properties that have retained their original characteristics and have high ceilings;
- Where’s your property located? If it’s close to a main road, bus stop or some other blight, this could be an issue amongst potential buyers;
- Is your property in a good school catchment area (check local Ofsted reports)? If so, there’s a lot to be said about nudging up the price;
- Do you have amenities closeby? As long as the area is not too congested, this is a good thing.
Of course, how much of a premium you should charge on top is open to debate.
Remember that most buyers will get a formal survey either through the mortgage lender or independently.
These days, most surveyors take a conservative approach.
If the house surveyor / valuer thinks the property is being sold for too much, there will be no qualms about downvaluing.
Local House Market Conditions
You may find that buyers are wary about the direction of the market. Their offers may end up lower than what you originally expected.
For example, there’s a lot of concern as to how Brexit will impact house prices. Some buyers may resist pushing up their offers too much as they feel the market could drop and they could get a better deal elsewhere.
If there are similar properties up for sale in your neighbourhood, the laws of supply and demand can come into play.
This can mean that you may be forced to drop your price.
Do your homework, look at the evidence and never rely on estate agents or so-called ‘professional’ opinions.
Here at Property Solvers, we very much welcome the licencing of estate agency professionals in line with Royal Institute of Chartered Surveyors (RICS) valuation standards.
The result, in our view, would be a marketplace based on common sense – and not speculation.
We were originally contacted by this client who was interested in our quick cash sale service.
The term on her interest-only mortgage was coming to an end and she needed to dispose of the property within a relatively short timeframe.
After some investigation and communicating, it was revealed that she had more time than she had originally thought and decided to list through our estate agency instead of selling directly.
The property was in Catford (Zone 3 London) in a well-served neighbourhood.
We looked closely at what properties were selling for on a square foot basis.
Although this house was slightly smaller than others on the street and needed some work, it had huge potential to extend and also benefitted from a massive garden.
We conducted two open days (approximately 25 viewings in total) and invited sealed bids.
After a strong bidding process, the property was to a lovely first-time buyer couple.
Controlling the Risks When Pricing to Entice
The idea is to market your property at a level that’s 100% in line with real market conditions.
It’s crucial to work with an experienced estate agent that understands the market and knows how to negotiate on your behalf.
He/she needs to be able to steer things in the right direction.
For this reason, make sure that you check the agent’s track record (here’s ours, for example).
Below we’ll analyse some of the common misconceptions/questions we come across when adopting this strategy:
Buyers think there must be something wrong with the property. Why else would the price be so low?
Here, the estate agent needs to demonstrate local sold house prices in the area.
Remember that the idea is not to price the property below market value.
We would also often show buyers other properties marketed by other agents and how long they have been on the market.
Check out tools like Property Log, for example.
Such property market data will show how the sales value is genuinely in line with what buyers will pay.
Furthermore, most buyers educate themselves about the market and know what a fair price to pay is.
We also strongly suggest pricing the property a little higher, to account for negotiating ‘wiggle room’.
There’s a structural issue with the property
Assuming there isn’t, buyers can and should instruct a full structural survey.
Most mortgage companies would want this anyway.
Many of the properties we have sold using this strategy require some kind of refurbishment work.
We often find that serious buyers know what the costs involved are.
Those that point this out unnecessarily are usually timewasters.
You, as the seller, must be desperate
Many buyers will automatically assume that you need to sell quickly and will accept any price they pluck out of the air.
Here, it’s a simple case of rejecting any silly offers that come through.
You can also instruct your agent to automatically reject any prices that come in below a set level. This way you don’t even have to know about any low offers.
You can also ask for ‘best and final’ offers so that you can instantly reject anything you’re not interested in.
Again, here, it’s a case of referring to HM Land Registry sold prices.
You’ll only get low or ‘heat of the moment’ offers
It’s often thought that people will come in a make an offer just for the sake of it.
In our experience, this couldn’t be further from the truth.
Pricing to entice often attracts many people to the property. A good proportion is actively looking to buy.
Of course, a handful won’t be serious but the ones that are super-keen are recognisable straightaway.
We can then create a competitive bidding environment which will push the value upwards and get you an excellent result.
This looks like a property that should be in an auction
Pricing to entice is relatively similar to an auction.
You’re ultimately looking to get a quick sale for the best possible price (in a similar way to which we highlight in this post).
However, as a seller, pricing to entice normally means you’ll pay less in fees.
Auction houses are charging at least 2% these days, and you’ll often have extra legal bills to pay at the end.
More often than not, we’ll arguably be able to get things done quicker. Auction periods, for example, average 3-4 months in total.
We’ve also found that the likelihood of attracting cash buyers is higher.
This eliminates much of the hassle that comes with mortgage-funded purchases which is one of the main reasons as to why so many home sales take so long.
What if the property doesn’t sell
Implemented in the correct way, we are very confident in our ability to get you a great outcome.
If for any reason the property doesn’t sell, we do not tie our clients into a minimum contract.
In the unlikely event that pricing to entice doesn’t work, you can then simply delist and reinstruct another agent.
Remember that if a property is priced too high on the market, you risk buyers thinking there are deeper issues at play (even if this isn’t true).
We often find that the ‘pricing to entice’ strategy works best for properties that need work.
However, Property Solvers priced to entice this immaculate property with an excellent result.
The owners were a lovely couple who were looking to downsize due to the kids leaving the nest.
The property benefitted from being close to the essential amenities and popular for growing families.
Originally purchased as a new build, we ensured the pricing was not only based on sold data (HM Land Registry / Office of National Statistics) but also factored in the promising growth prospects.
We also advised the sellers to be wary of the ‘premium’ that recently built properties up for resale that often isn’t factored in (why so many remain unsold).
Here’s their review summarised…
Property Solvers Estate Agency
You’ll probably hear different valuations floating around, which no doubt leaves you confused.
Here at Property Solvers, we do things differently…
We start by having a frank and no-obligation chat about your selling situation.
We’ll also offer a FREE valuation report, which uses real-time evidence from Rightmove (the UK’s leading house sale portal), HM Land Registry and a number of other credible sources.
Work with Genuine Property Experts
Our directors have been working in homes sales for over 17 years.
In this time, we have also bought and sold properties 100s of times for ourselves and clients.
Our first-hand experience enables us to offer you a better service than other estate agents.
We’ll Work to Get You an Offer 28 Days
We take our experience of working on fast transactions (in the sell house fast space) and focus on getting our clients maximum value in under a month.
Using the ‘price to entice’ methodology highlighted above, we’ll drive potential buyers from the first day of listing. This is when buzz and excitement are at their peak.
Of course, we’ll position the asking price at a level you’re completely happy with.
You can also see regional data specific to your area to see how your postcode compares with others. Note we include this data in our house valuation reports.
No Tie-Ins Contracts
You’ll probably find that most agents want to tie you into a contract for at least 3 months.
Property Solvers are so confident about our service that we won’t put you in such a position.
We usually request for us to have 28 days but, if you’re not satisfied with us, you can leave with no questions asked (not that you’ll need to!).
No Sale, No Fee
Most online estate agents want an up-front fee.
Although the total costs usually end up cheaper, you’ll find that you’re tied in with them without any real guarantee that they’ll sell.
Here at Property Solvers, we need to prove ourselves before taking a fee.
In other words, in the unlikely event that we don’t sell your property, you won’t pay us a penny!
Tech-Driven with the ‘Personal Touch’
We are continually developing our internal systems to minimise friction and speed up the process.
At the same time, we pride ourselves on having one-to-one relationships with our clients.
Our sales team always makes itself available to deal with any issues – even over evenings and weekends.
Feel free to test our freephone enquiry number on 0800 344 3797.
Wide Online Exposure
Our job is to get as many eyes looking at your house – which is what we do best.
Your property will be advertised on all the major portals including Rightmove, Zoopla, Prime Location, House Ladder, Net House Prices, Mouseprice, Home.co.uk and many more (see where we advertise).
Those that use our Premium package will also benefit from having their properties featured on Rightmove and Zoopla (alongside other benefits).
High-Quality Photos, Floorplan and 3D Tours
We’ll take high-resolution photos and produce a detailed floor plan (with no charge).
For those that choose our Premium package, we’ll include a full augmented reality (AR) tour of your home.
If you’re not happy with any aspects of the advert, we’ll be more than happy to make any changes.
A Bright ‘For Sale’ Board
Our luminous ‘for sale’ boards can be seen from many metres away. They’re also visible on darker days and in the evenings.
Every board has our freephone number for people to book viewings and request information.
24/7 Estate Agency Service
Our enquiry line and online chat service 365 days of the year.
This means we never miss a beat when it comes to organising viewings, dealing with questions and handling any possible situation that could arise.
We use our professional viewing experts to show buyers around your home.
Members of our viewing team and associates are available evenings and weekends. You do not necessarily need to be present.
Our sales staff will follow up every viewing with detailed feedback (via email and/or phone call).
We’ll then be available to deal with any questions or open up the negotiation process.
Deal with Serious Buyers Only
We’ll check the financial situation of any offer before allowing the sale to proceed.
Typically we make sure the vendor has an up-to-date and valid mortgage in place. We also confirm that they have the deposit ready to buy your house.
We usually suggest that sellers stay away from a chain sale, but sometimes there’s not much choice – especially in higher-value areas.
In such scenarios, we will regularly check all aspects of the chain and help the solicitors deal with any issues.
We sometimes also ask for a non-refundable deposit, especially when we sense that a buyer is not committing. This usually ‘sorts the wheat from the chaff’!
Full Communication and Weekly Reports
Having sold houses through other agents in the past, we became frustrated with the ‘set and forget’ attitude after we signed up.
We found it hard to get updates and clear answers to our questions.
These negative experiences have taught about the importance of dealing with queries whenever our clients need them.
We’ll also send over a weekly report which has data direct from Rightmove and Zoopla so you can see the kind of interest your property is generating online.
Complete Sales Progression
We have many years experience in processing home sales. We will make regular checks with the solicitors and be available to deal with any issues you need us to.
Property Solvers are also happy to put you in touch with the solicitors we use for our private sales.
We’re also completely available to help you with the legal documentation or if you need ‘hand holding’ throughout the process.
For a short introduction to how we work, check our introductory video below:
Please call us anytime for a friendly, no-obligation chat. Our freephone number 0800 044 3733 is open 24 hours, 7 days a week.
The vendors were brothers who had inherited this Derby property from their father and were considering an auction sale.
The property needed complete refurbishment but was in an excellent area close to the Rolls Royce factory and other employment hubs.
For this sale, we replicated an auction environment by conducting an open morning and establishing a minimum guide price.
As expected, the offers came through thick and fast. We achieved the vendor £5,000 over the asking price shortly after the open market. The sellers paid a fraction of the fee compared to using an auction house.