We know that figuring out how to set the right price of your home can be tough. It is a big financial decision and you need to get it right. This guide will explain how to find the right price and what can affect your home’s value.
The difference between the market price, asking price and selling price?
There are three price levels when selling your home: the market price, the asking price, and the selling price, but what do they all mean? The market price is what your estate agent or online valuation believes your home is worth. The asking price is the price you actually put your home on the market for. The selling price is what your home actually sells for. The asking price is ultimately your decision so it is important you know how to price your home right.
How to find the right price
Valuation:
One of the best ways to find the right price for your home is to have a valuation.
Take a look at our last blog , a guide on how to value your home. There we cover how the valuation is conducted and compare the different types of valuations that you can do.
Research:
Doing your own research is a great way to help you find the right price.
Property market: Look at the current property market to see what homes are selling for in the UK. A great place to get this information is from the Land Registry. With data from all over the UK, you can get an idea what homes are selling for in the current market. According to the Land Registry, in June 2022, the price of a home on average in the UK is £286,397. Take a look below at the average house prices by area in June 2022.
Homes in your area: do some research into into what price homes in your area have sold for and are on the market for. This will help give you an indication of what your home could be worth. Check out apps like Rightmove and Zoopla or your local estate agent’s windows for this information. You can find the best estate agent in your area using Homemove.
A simple way is to use Haus, a dedicated desktop valuation website. Haus tells you when properties in your area were last sold and how much for, it can also offer you an estimation on what your property is worth. This might hep you decide on the right price for your home.
You can also ask your estate agent to provide you with this information. An agent will have knowledge of your local area and likely have sold similar properties in your area before.
The dangers of overpricing or under-pricing your home
Overpricing
You don’t want to set an unrealistic price for your home. Overpricing your home could mean that your home might not sell. Alternatively, it could be on the market for a long period of time. Your home might not be seen by as many buyers and buyers might not be willing to pay more than what they think it’s worth. Remember, buyers will filter the online portals according to their budget. If you are looking for a quick sale overpricing really isn’t a good idea.
There is the option to to price your home for 5-10% more than your estimate. Consequently, if you agree to lower your house price during negotiations, you won’t lose real value.
Try not to be tempted to overprice your home by more than 5-10% as it may not sell.
Under-pricing
You may lose money if you under-price your home and it sells for less than its value. Reducing the price of your house could result in a faster sale if you’re looking for a quick sale. By reducing the price, you could also start a bidding war between buyers. This would show buyers that there is interest in your home, and, counterintuitively, could increase the sale price.
It is for this reason that many auction properties go on the market for a low ‘guide price’. Don’t under-price your home if you aren’t in a hurry to sell. Doing so could result in you losing a lot of money. 10% of a £300,000 is £30,000! Many people will find this sum to be life-changing.
What can affect the price of your home?
Before setting the price of your home there are things you need to take into consideration which could affect the value of your home.
Location, location, location!
The location of your home plays a part in the value. If you live in a desirable area with great views and no risk of flooding this can add value to home.
Bedrooms
Do you have an office or playroom that could be used as a bedroom instead? Research has shown that an extra bedroom could boost the value of your home by up to 15%. If you are able to add a bed to the room to show the potential of it as a bedroom.
Schools in your area
Having good nearby schools in your area can increase the value of your home, due to families wanting to be able to access great schools easily. Research done by the government shows that if your home is near the best primary and secondary schools then the house prices are higher.
Transport
What nearby transport do you have? Many buyers will need to have access to buses, trains and trams to get around, so having nearby transport is great for adding value to your home. For example, a study shows that if you live in London and are 500m away from a station, then there is a £46,800 premium increase compared to if you lived in a similar home 1,500m away.
Extensions
Having an extension can up the value of your home by 23%. If you have an estate agent valuation make sure to show the agent your extension and they will take this into consideration when coming up with their valuation.
Condition
The overall condition of your home will affect the value. You don’t need to make your home pristine but cleaning the indoors and outdoors of you home, painting the walls and fences, fixing broken windows and doors are all little things that will improve the overall condition of your home and increase the value. If it is not possible to do up your home then it is good to be open minded during negotiations, as the buyer may ask for the price to be reduced.
Outdoor space
In recent years there has been an increase in buyers wanting to have outdoor space. This is especially so since COVID-19. According to AA if you have a garden the value of your property could go up by 16%.
Housing market
The current housing market has an affect on the price. In 2022 property value in the UK had an annual increase of 7.8%. you can easily keep an eye on the data by looking at the house price index online.
Bathrooms
Having additional bathrooms in your home can attract more buyers, an extra bathroom can add about 5% to the value of your home.
When coming up with the right price for your home, take all the features mentioned above into consideration to ensure you get the best price. The best way to understand if features of your home or area add value is to speak to an estate agent. They have the experience and knowledge to take these features into consideration when doing a valuation on your home. If you are struggling to find a trusted estate agent in your area be sure to use homemove to find the best agents in your area.
Don’t worry if you are unable to add a new bathroom or extension, these features can cost a lot of money. The best way to get a good price for your home is to keep it in good condition and make it look inviting for potential buyers.
To summarise
Finally, with your valuation, research and understanding what affects the price of your home, you should now be ready to choose the right price for your home and take the next steps in your journey to selling.
