Analysis shows benefits of realistic pricing
Homes put up for sale at an unrealistic price sell for £12,000 less than their listing price on average across England and Wales and remain longer on the market, new research suggests.
Overvalued properties can remain on the market up to 58 days longer than their more accurately valued counterparts, rising to 60 days in London, according to a study from property firm Zoopla.
The analysis company compared the difference between the listing and sales price of properties that were not discounted, fairly priced, and those that were discounted or overpriced.
Zoopla says that the results highlight the importance of accurate pricing and the potential repercussions of valuing properties aggressively, either to win instructions or test the market.
By analysing the price that properties were initially listed at and cross-referencing them with sold prices from the Land Registry database across 12 months, it found that homes in Salford, Driffield and Dronfield, on average achieved 100% of the initial asking price.
The report suggests that estate agents based in these towns are particularly skilled in managing sellers’ expectations and assessing the state of the local market. The next best was Sheffield at 99.6%.
The overall average in England and Wales was 96.3% while the best in London the average was 94.6%. The best in the capital was in the borough of Waltham Forest at 97.9%.
‘Our research highlights the importance of accurate pricing and reveals the areas where there is the healthiest alignment between a seller’s expectations and what a buyer is willing to pay for a property,’ said Charlie Bryant, managing director of Zoopla.
‘When a home is valued too ambitiously at the start, or simply overpriced, the sales process can be derailed. Homes can languish on the market for much longer than they should and the vendor loses control of the sale, often leading to price reductions,’ he pointed out.
‘Agents in Salford, Driffield and Dronfield stood out in our report in aligning their vendor expectations with the realities of the market, and what a potential buyer is willing to pay for that particular house, in that particular location,’ he explained.
‘The English and Welsh average sold price, which amounts to 96.3% of the asking price, indicates a market realism, and moreover a market that is transacting good values, despite wider macro-economic and political concerns,’ he added.