Understanding property pricing
Hattie Coates, partner & Storrington estate agent, explains some of the different terms and strategies when it comes to pricing a property:
During a market
appraisal, or a valuation as it’s often called, understandably the owners are
interested in the price their house might achieve. Of course everyone wants the
most they can for their property, but many different aspects have to be taken
into account, such as market trends and the owners’ timescales.
Guide price
This indicates the figure which the seller is looking to achieve but indicates that they are open to negotiation. A straight ‘asking price’ may mean that the seller has a firm price, although many buyers will often put forward an initial offer in any event.
Offers in the
region of…
Usually shortened to OIRO, and similar to ‘guide price’, this provides a guide for buyers as well as allowing for flexibility in a changing market, both in an upwards or downwards direction subject to different factors.
Offers in excess
of…
This strategy is used to encourage potential buyers to offer above the stated amount and is often shortened to OIEO. Again, it often works best with a lower headline price to gather momentum and can be very successful, especially for unique properties where the market demand will determine the final value.
Sealed bids
When a property generates a huge amount of interest, like at an auction, sealed bids strategies allow many parties to make their best offer. A sealed bid scenario allows everyone to have an equal chance to be the one successful buyer and a date and time is set for the opening of the bid envelopes.
Open days
These work best on properties likely to generate a lot of interest, like a derelict old cottage, where lack of similar homes and a relatively keen price designed to encourage as many viewings as possible will help to create its own demand. It can often be combined with sealed bids. ’Open day’ marketing has to be carefully managed and works most successfully when the property first comes to the market.
In addition
When arriving at a marketing price and strategy, we’ll also consider the seller’s position, the wider economy and of course the type of property for sale and likely demand from current buyers.
“A property is worth what someone’s prepared to pay for it” still rings true but it’s the impact of accurate pricing and pinpoint strategy which help maximise the final figure. Price and speed can often go hand in hand.
01903 742535
harriet.coates@henryadams.co.uk
