I had an interesting question the other day from a homeowner in Manthorpe
who asked me the difference between asking prices and values and why it
mattered. When
it comes to selling property, there must be agreement between the purchaser
(buyer) and seller (vendor) for a property sale to take place. The value a
buyer applies to a property can massively differ from the value a seller or
mortgage company places upon it. The seller, the buyer and the mortgage company
must find an agreeable value to assign to a property so the sale can proceed.
In
many of my articles about the Grantham property market, I talk about values, i.e. what property in Grantham actually
sells for, but I haven’t spoken about asking prices for while. Now asking prices are important
as they are one of the four key matters a potential buyer will judge your
property on (the others being location, bedrooms and type). Price yourself too
high and you will put off buyers. So let’s take a look at the Grantham numbers.
Over the last
12 months asking prices (i.e. the price advertised in the paper and on
Rightmove) in Grantham have decreased by 7%, taking the average asking price in
Grantham to £175,400 (down from £188,000 twelve months ago).
Interestingly
though, when we look at, say semi-detached and terraced property, a slightly
different picture appears. Twelve months ago, the average asking price for a semi-detached
house in Grantham was £131,700 and today its £137,900 (a rise of 5%); whilst
over the same 12-month period, the average asking price of a terraced property
was £129,500 a year ago, and today its £127,400 (a drop of 2%).
However, my
research shows that the supply of property for sale in Grantham is beginning to
increase. In December 2015, there were 295 on the market in Grantham today
there are 325 properties on the market (up 10%). This will mean homeowners
looking to sell will need to be conscious of how their property compares
against others on the Grantham property market. The Grantham property market
still has substantial momentum and sufficient demand remains. This noteworthy
increase in supply since Christmas is currently providing more choice for
buyers.
… And here
is the second point to make. Asking prices are one thing, but what a property
sells for (i.e. value) is a completely different matter. These are the average
prices achieved (i.e. what they sold for or the average value) for
property in Grantham over the last 12 months...
·
Overall Average £187,300
·
Semi-detached £143,200
·
Terraced £122,400
You can
quite clearly see, there is a difference between what people are asking for
property and what it is selling for. The underlying fundamentals of low interest
mortgages and tight supply remain prevalent in the Grantham property market
however, the number one lesson has to be this ... if you want to sell, be
realistic with your pricing.
