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Too cheap? Too expensive?
The optimum offer price!
One could get the impression that some estate agents and sellers simply advertise properties according to the formula „any comparative price x living space“. This results in asking prices of 235,124 euros or 551,399 euros. Neither of these is attractive or effective.
In the current market situation, with significantly subdued demand and fewer enquiries, the advertising price chosen wisely and in line with the market plays an even more important role than before. Until 2022, the high demand and high willingness to pay automatically ironed out tactical errors in pricing. This has not been the case for a few months now.
If you offer a property too cheaply - yes, this is still possible - you will not automatically receive so many higher purchase offers until the price is at market level, but you will most likely receive less than the possible sales proceeds. So you are giving away money.
If the price is set too high, there is no demand at all or it is reduced to unmotivated „exposé collectors“ or „bargain hunters“ who make extremely low counter-offers. The focussed and serious buyers stay away from such offers, after all there are plenty of other offers to choose from. Sellers are then tempted to reduce the price in small steps - not realising that this is the start of an unstoppable downward price spiral. Read below to find out how to do it better.
The basis for any successful pricing strategy is a market-driven valuation based on various valuation methods supplemented by critical market observation and the experience of the estate agent. Only agents who have successfully brokered several sales in different market segments since mid-2022 have the necessary market intuition at present. The biggest mistake would be to be guided by the other asking prices of comparable properties. In our estimation, only around 20% of the advertised properties are currently priced in line with the market. The rest are still offered at too high a price and therefore cannot serve as a reference for the price!
The estate agent is a decisive factor not only in setting the price, but also in implementing it. You have to actively sell property again instead of just advertising and waiting! With a transparent presentation and committed communication, bidding or purchase offer procedures can also work and contribute to a successful sale. However, these are not a panacea, but must suit the property and the seller's wishes. They should be used carefully so as not to have the opposite effect.
What are the signs that a pricing strategy has failed and needs to be adapted? If you no longer receive any or no serious enquiries, the presentation should be reconsidered. If there was no purchase offer at all in the first few months, the advert is also not reaching the desired target group. After longer marketing periods, you are more likely to get questions about „snags“ in the property than positive curiosity. There is no fixed timetable: Some prices should be adjusted after just two weeks, while other listings can work for several months at the initial price. You have to listen to the voice of the market.
As a general rule, price is not the only way to revitalise an offer. You should first scrutinise the potential of the property, the quality and reach of the marketing or the commission strategy before lowering the price. If you are left with only the latter option, it is again a question of instinct.
The step should not be too small that you are forced to repeat these small reductions several times, but also not too large that you are below the market price. New market research and feedback from interested parties from the previous phase should play a major role in the new pricing. This also works best with many years of experience.
Because one thing is also clear: the market usually gives you a second chance, but this new price has to be right and lead to success. „Trial and error in several steps is not a good way to go.
To summarise, the asking price is one of the key components of a successful sales strategy. Rely on WEKEYS IMMOBILIEN and get in touch with us to have your property professionally valued.
We look forward to hearing from you.
