Confused about how to price your house in Kent?
I recently received a telephone enquiry from a home owner. He’s considering selling his home and like many home sellers, he went online to see if he could work out how much his home is actually worth.
“Rightmove values my house in Kent at £320,000,” he told me. “Yet, one of my neighbours recently sold their house, which is almost identical to mine for £360,000.”
He explained that he is quite confused about the whole home-pricing process and wanted to know if I could help him out.
How to set the price of property
First of all, the online property portals and the online valuation tools offer only “indications” of a home’s value. They have never seen your actual property or any other home for which they determine an estimate, so they are seldom 100% correct. You should consider them as more of tool to give you a rough indication or “in the ballpark” type figure.
An online or desktop valuation is done using online information such as land registry data (for the property itself and comparable properties in the area) and house price indices in order to calculate an estimated market value. The price is going to be based on a number of factors including the historical price of the home and of similar homes.
Ultimately the price of the property is whatever someone is actually willing to pay for it. However, the chances of finding that one person who is prepared to pay a million because she absolutely loves you’re yellow bathroomed, 1950’s kitchenette, artex walled home are going to be slim!
What’s the market value?
The home owner did understand however that the price he sets for the property should reflect its current market value.
The only way to know what that is – what a willing buyer will pay to a willing seller for a home like his – is by working out what buyers have paid for similar homes in the recent past.
Proper research is needed. This means we need to look at the sales prices of similar homes in the local area. However, there’s more that goes into determining if a home is comparable to yours than meets the eye. As a Local Property Expert I look at various pricing criteria including…
- The age of the home
Homes sold that are of similar age of your home.
- The size of the home
Yes, the physical size of the property and plot, as well as the number of bedrooms and bathrooms determines the market value.
- The home’s location
We try to find sold homes in close proximity to the subject property, but will consider a wider range if necessary. The area around your particular neighbourhood may also impact its market value.
- The style of the home
Is the property a bungalow, house, detached, semi-detached etc.
- Does the property have sea views
Sea views can add thousands to market value e.g the properties along the Whitstable, Tankerton and Herne Bay seafronts.
- Improvements, amenities and condition
We’ll compare your home to the sold homes, consider any home improvements, whether similar amenities are offered and most important, how the condition of the homes compare.
Next, we’ll do the number crunching to determine if your home is worth more or less than the sold homes.
You set the price
Always remember, that it is you, the home owner that actually sets the final asking price. The asking price should also be based on how quickly you wish to sell. It you want, or need to sell quickly, then a lower price will attract buyers as they will see your property as a “bargain”.
However, if you’re not in a rush and don’t need to sell quickly, then start off at a higher asking price. Should you sell at a high price, fantastic. If you don’t, then you can slowly reduce the price until you do sell.
Be aware however that this sales strategy can mean your property is on market for a long time. There is then the danger that people think there might be something wrong with the property if it doesn’t sell for a while.
Room for Price Negotiation
Remember, negotiation is part of the house selling process.
- Buyers presume there is room for negotiation in the asking price, so you should adjust for that
- Ask for between 5 and 10% above what you would be happy to accept
Citizens Advice has more unbiased advice on setting your price.
When looking for a new home people tend to consider homes between price ranges that are separated by five to ten thousand pound increments.
Consider setting your price near one of these natural price points. For instance, a price £249,995 would probably net you exactly the same number of buyer enquiries as a price of £246,995. And if you needed to sell quickly, moving your home down to £244,995 (the next price point down) would widen your potential buyer pool.
Look at how the property portal Zoopla set the price points in their search form.
External Considerations on Pricing
Housing market forecasts – thanks to the internet it is now possible for everyone to find out the latest market forecasts. These will have an impact on the price of your property. Consider the current economic conditions when setting your price. At the time of recession, people may have less money to spend, so it may be necessary to reduce prices in order to influence the buying decision.
Mortgage Company Valuation
What will the valuer say? The mortgage company and their valuer have the final say in how much your home is worth in today’s market. No lender is going to approve a mortgage for more than a property is worth.
This is why we are so thorough in our determination of the appropriate price for your home. An inaccurate evaluation on your agent’s part can lead to a failed transaction, just when you thought it was a done deal.
The mortgage company’s valuer will probably carry out a desktop valuation of your property first. They’ll look at recent sales and data to work out whether the agreed price is acceptable.
A Basic Survey
Mortgage valuations don’t take very long – approximately 15-30 minutes. They don’t generally go into any great depth when considering the condition of the property. The surveyor will look at things like whether the property is in a high-risk flood zone, next door to a firework factory, above a shop, or really run down condition. They’ll then combine this knowledge with the online data.
(If you’re a home buyer then a full structural survey is recommended – this can give better protection by alerting you to potential problems before you buy.)
A mortgage lender is valuing your property as collateral for the mortgage. Their aim is to estimate how much the property would sell for on the open market, assuming a sale needed to be achieved quickly (in case of repossession for example). For this reason, its valuation may be a bit more conservative than your own or one from an estate agent.
If you are unhappy with the mortgage companies valuation of your property and you have specific evidence of why it’s worth more – for example comparable properties which have sold for more recently in your local area – you can speak to the mortgage lender and ask them to reconsider.
When you hire an professional estate agent, the suggested list price should match or come very close to the mortgage surveyors value of the home. This is why it is so important to interview more than one estate agent for the job of selling your home.
Thinking of selling or letting your house? Call Haydon Rouse!
Tel: 01227 360922
I’m proud to service the following: Herne Bay, Whitstable, Canterbury, Faversham, Westgate-on-Sea, Margate and the surrounding areas.