If you’ve decided to put your property on the market for sale, you’ll have to determine the ‘right’ asking price for it.
Here’s where some people are at a loss, since they aren’t quite sure what’s a number that’s acceptable to potential homebuyers while still reaping a neat profit.
There are several things you need to take note of, before you can zero in on a realistic amount of money that does the property justice.
What’s more, with the ongoing uncertainty in the real estate industry due to COVID-19 and the Movement Control Order (MCO), it’s going to be even more of a challenge to know the right value to let go of your property.
Here’s how to go about setting an asking price that’s not only reasonable and will help you sell your house quickly, but fits the current market conditions.
What Is An Asking Price?
The asking price refers to the sum of money the seller of the property wishes to quote to potential buyers.
However, just because you ask a certain price does not mean that’s the amount you’ll receive – asking prices are not fixed, and the eventual sum of money the house is sold for will depend upon how the negotiation process goes down.
As a result, the property may be sold at a higher or lower figure.
Why It Is Important To Set The Right Asking Price
The asking price you set must be realistic, okay! If you ask for an exorbitant sum in exchange for your property, buyers will look at others that are being offered for more pocket-friendly prices.
As a result, your property will remain on the market for a long stretch of time before you either lower the price, or find a buyer willing to part with the amount of money you’re looking for.
On the other hand, if the price you’re asking for your property is too low, you’ll be undervaluing it and not raking in a good profit.
Factors Which Determine How The Asking Price Is Set
1) The Type Of Property In Question
This has an impact on the asking price you can realistically set.
If the property is a freehold, it’ll belong to the homeowner for an infinite amount of time after having been transferred to them by parties such as the state, or the property owner itself.
Freehold properties are subject to lower restrictions than the leasehold counterparts, and are financed more easily.
As a result, freehold properties are often more sought-after.
While the owner of the freehold property can modify the land as they please, such as changing the landscaping or erecting structures, he/she will still have to adhere to local laws.
Leasehold properties, on the other hand, belong to the owner for a limited number of years, after which the land in question will be returned to the government.
Malaysian leasehouse tenures generally last for 30, 60, or 99 years. However, there’s the possibility of extending the lease, which the owner must apply for before the tenure elapses.
The length of the lease affects how the property is valued, as a leasehold property with a longer life would be worth more than one that is nearing the conclusion of its lease.
2) General Price Trends
To arrive at a suitable price for your home, you cannot simply throw out any number you please and pray that it would attract some prospective buyers!
To give yourself a better idea of where to start, research the prices which similar properties have sold for in the last few months to a year.
You may choose to set an asking price either slightly above or slightly below that average selling price, but make sure that the figure is not unreasonably low or high.
3) Type Of Neighbourhood And Facilities
If the property in question is in a prime location with offices, malls, schools and other lifestyle options within its vicinity, buyers will likely be lining up for a chance at owning it.
Alternately, if the property is in a highly prestigious, sought-after residential neighbourhood where people of a certain financial status are known to settle down in.
It won’t hurt to have a reasonably higher asking price, as prospective buyers would be more willing to part with their money.
How To Set The Right Asking Price For Your Property:
1) Get Expert Help
If you’re not confident in how to go about the process of pricing your house or feel overwhelmed at the prospect of having to do so, the best thing is leave this task to the experts.
After all, if you were to go about it yourself, you may make errors, be swayed by factors other than logic, or attempt to approach the entire pricing process based on your emotional attachment to the property.
A reputable property agent will do all the intellectual heavy lifting for you, including research and trend evaluation.
Connect with pros who can help meet your needs.
2) Listen To The Market
Observe how similar properties are performing in the market.
Is it a buyer’s market where there are too many houses up for sale and property owners have no choice but to sell at low prices just to get their homes off their hands?
Or is it a seller’s market where there is fierce competition between buyers, with each of them trying to outdo the other by offering to part with more cash just to acquire their dream home?
If possible, time the listing of your house accordingly.
How To Increase The Asking Price After Listing The Property On The Market
If you’ve carried out major renovations that enhance the overall quality of the property, such as revamping certain portions of the house, repainting the exterior or adding in a few new rooms, you have the right to set a higher asking price.
2) Price Cues Based On Sales From Other Properties
If your neighbourhood is experiencing a surge in buyers willing to pay more just to acquire the home of their dreams, you can consider raising your asking price to appeal to those kinds of buyers.
If not, your lower asking price might make your property seem less attractive as compared to neighbouring plots being sold for more.
3) External Appraisal Services Gave You A Higher Valuation
If you engaged the services of a third-party appraisal agent to evaluate how much your property would be worth and you trust their opinion, you should increase the asking price as long as you have been advised to do so.
In the case of your own asking price versus the opinion of a seasoned expert, it is always better to listen to someone who evaluates properties for a living!
If you’re looking to sell your property fast, determining the asking price of your property should be one of your top priorities. Study up on everything that would influence the asking price, or better yet, hire a qualified real estate professional so you are able to get the most out of your property.
Disclaimer: The information is provided for general information only. PropertyGuru International (Malaysia) Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.