Estate agent setting low asking price

FledNanders · 01-02-2023 11:06am #1

Are there any disadvantages to an estate agent using the strategy of setting a low asking price in order to drive interest and thus increase the final price via increased bidding?

I'm thinking of selling and the estate agent has advised to use this strategy, but I'm worried that it might just attract a lot of buyers with budgets below what we would like to ultimately achieve for the sale price. And also I'm worried the low asking price might make people think twice about going too far above this level.

I personally think the asking price he has mentioned would be about 15% below what we would hope to achieve for the house sale, going by other properties in the area.

RedXIV · 01-02-2023 11:18am

If there are other houses in the area going for what you want to sell for, I can't see a reason really to lower the asking price.

We've been looking recently and saw a house about 10% less that others in the area and we did offer asking but because the sellers wanted to wait to gauge the market, we pulled our bid because I have no idea what they want to sell for and when they'd be happy to do it. We ultimately went for a house that when we offered asking, they snapped it up. No messing, all happy.

So I guess the risk here is that if you have an internal number that you want bidding to reach, you may find people pulling out if you're waiting for that mystery marker to be hit?

Best of luck!

JohnnyChimpo · 01-02-2023 12:03pm

I'd probably be more comfortable with 5-10% below what you want tbh, or else just ask for what you want to get and save all the nonsense

pc7 · 01-02-2023 2:40pm

I think its a risk atm to be honest, depending on whats going in the area too, but I'd put it for what they feel should get for it or maybe a small be below to get people in. But if you go 10-15% below you could get offers below that as some purchasers will go in under the asking.

herbalplants · 01-02-2023 2:55pm

https://www.boards.ie/discussion/2058282372/estate-agent-setting-low-asking-price

Bad bad move. That peak has gone. Asking price should reflect what you want to achieve. How will a buyer know what you want!

Imagine a buyer comes in and bids asking price and you say no I want more. Likelihood he will go, bye bye.

RichardAnd · 01-02-2023 3:14pm

I think that the best strategy is to put the house on the market for what the valuation deems it to be worth. Putting a house for sale with a deliberately lower price is an underhanded tactic, and not something to be encouraged. It will suck in people who cannot afford the house, give them hope and then waste their time. It's also likely to start a bidding war, which could drive the price through the roof, and many such sales eventually fall through when the "winner" of that pyrrhic victory sobers up and realises what he/she has done.

This is the kind of nonsense that contributed to such a broken market...

Col_30 · 01-02-2023 5:11pm

I would advise against it to be honest. We recently went with this strategy and it backfired a little.

We got about 20k less than what the EA told us we could expect. We also had a lot of interest from people with lower budgets. It just resulted in more work for the EA, so I'm not even sure why they bother with this. It seems a silly waste of everyone's time, especially if you aren't willing to entertain offers below a certain point.

We managed our own expectations in the end and were very happy to get the price we got. There's still a lot of competition out there for certain properties, but they have to be almost perfect to have any sort of bidding war, i.e. Energy efficient with high BER rating, no work required, garden done etc. etc. People are becoming a lot more fussy as the market cools down.

Good luck!!

spaceHopper · 02-02-2023 12:48pm

I think it's a bad idea and I'd even go so far as to talk to other EA's.

They might be hoping to get a lot more people to come to viewsings and flush out higher bidders by making them think it's an "in demand house". But my think on the asking is it's a figure the owner is hoping to get, if it goes for more they will be delighted but unless there is a bidding war they would accept the asking.

Kurooi · 02-02-2023 2:21pm

Most EAs advertise the price under what they hope to achieve. It is perfectly normal to hope to sell for 300k and advertise as 270k (10% down) or even a little lower. Most EAs will do that. When the bidding war starts you discover many will stretch their budget. Either they had a rainy day fund, or bank of mom and dad, a quick loan from a sibling, or just saving up between now and when sale finalizes.

Disadvantage... well if you put it too low, especially if the property maybe due to location or state is not going to be overly fought for, some people might assume there's something wrong with it. They may also be shy to bid like you don't want to price it 50k under and then first 2-3 bidders start playing with 1k increments. Your EA hopefully has the cop on to not allow that, tell them bid has to be at least 5k up from previous lest you'll be there til Christmas.

endofrainbow · 02-02-2023 4:14pm

Find another estate agent

Toots · 02-02-2023 5:22pm

We did this when we were selling our apartment, and in hindsight, I wish we hadn't put it on quite as low as the EA suggested. We had a figure that we absolutely couldn't drop below because that's what we needed in order to clear our mortgage, and the EA wanted to put it on 20k below that to generate interest. We went with their advice, and in fairness, it did generate A LOT of interest (there was about 30 people at the first viewing) but to me it was a bit of a waste of time, because the first couple of bids were below asking and miles off what we could actually afford to sell for, so the thing had ongoing bidding for about 2 weeks before we finally hit the mark where we could have actually accepted an offer.

In the end, the last 3 bidders were two people who had attended the first viewing and had bid consistently all the way along, and eventually ended up bidding about 40k over what they'd originally bid, and a cash buyer who was at the last viewing only. We sold at 30k over asking but realistically it was only 10k over what was needed to clear the outstanding mortgage and between fees etc we just about broke even at the end of it.

I think if I was to go back and do it again, I'd put it on at 10k under what we could accept, and go from there because it was quite stressful seeing all the bids coming in that were pretty much pointless because we couldn't afford to sell it for that price.

herbalplants · 02-02-2023 7:26pm

https://www.boards.ie/discussion/comment/120192845#Comment_120192845

Also a waste of time for the early bidders who couldn't afford what you had in mind.

Supercell · 03-02-2023 9:34am

I agree, this would piss me off as a buyer, ask what you feel its worth and lower if there isnt any interest.

Estate agent setting low asking price

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