When it comes to selling a property in the current market, especially at entry-level prices in Dublin, asking prices may seem more affordable – but what is being asked is not what you may pay.
Buyers are seeing such a significant number of properties that go on to sell above the asking price that they’re looking at the price and adding 5-10 per cent on top, says Michael O’Neill, sales manager at SherryFitzGerald’s city-centre branch which covers Dublin 1, 2, 3, 4 and the city part of Dublin 8. He says buyers’ thinking now is: We won’t be able to afford it, so we won’t go for it. He says if he wants to achieve €310,000 or €320,000, the property needs to be put on the market asking €295,000 or €300,000.
One agent advises buyers to factor in as much as a further €30,000-€50,000 to the price listed on a property portal
An agent’s valuation and pricing strategy is regulated under the national Property Services Regulatory Authority (PSRA) guidelines, says Will Moore of Sherry FitzGerald. The price range employed by a PSRA licensee dictates that the difference between the upper and lower limit of a valuation should be capped at a maximum of 10 per cent.
“If a property has an advised minimum value (AMV) range of €500,000-€550,000, we’re supposed to quote an asking price within that range; neither below nor above that,” says Moore.
Yet the lower pricing strategy is seen in examples across the capital. Michael Kelly of Vincent Finnegan illustrates the situation with number 367 St Colman’s Terrace in Rialto. Situated beside Dolphin House, the three-bedroom, end-of-terrace redbrick with a good-size southwest facing yard and vehicular rear access had been asking €350,000 when the 90sq m house with a BER of E2 was sale agreed last November. The sale fell through. “We dropped the price to stimulate interest and bring it back up to the levels it was at. By reducing the price, we also broaden the audience [online] in terms of search engine optimisation,” says Kelly.
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This is a key factor. “Buyers are quite aware that the asking is a guide price, that it is not necessarily what it will sell for,” he says, advising buyers to factor in as much as a further €30,000-€50,000 to the price listed on a property portal.
After two years of ever-increasing demands from vendors, buyers have become more circumspect in what they will even entertain viewing, so as to minimise disappointment and being priced out.
The market has changed. “Back in 2018, when Brexit was an issue, we were often only getting one bidder, we were doing price reductions and taking three months to sell, says Eoin O’Toole, senior negotiator at Lisney’s Howth Road branch. “Now we’re getting more activity, an average of two or three bidders per property, an increase in buyer levels of between 50 and 66 per cent, and we’re probably selling within an average of four weeks.”
He is currently selling a two-bedroom maisonette in a mid-terrace house in East Wall. Number 18 Church Road is a small two-bed, E2 BER-rated unit on the ground floor, with its own entrance and back garden, in-walk-in condition, which has come on asking €295,000.
Demand is also driving this. “Asking prices can be very different to prices achieved,” O’Neill says. “The asking price is also affected by whether the vendor has time on their side to sell and wait to achieve the asking; if they’re in more of a hurry then we’ll go with a more competitive asking price.”
Across the city in Stillorgan, DNG brought 49 St Laurence’s Park, a three-bed, end-terrace house of 84sq m with a C2 BER to the market in December asking €495,000. Active bidding has already achieved expectations, says partner Brian Dempsey.
“The correct asking price is the perfect chemistry, but if you feel the property might achieve between €500,000 and €550,000, you will suggest putting it on at the lower end of that scale so it will appeal to a wider audience. It’s like cooking the turkey on Christmas Day. If you undercook it you can put it back in the oven. If you overcook it, you can’t undo it.”
Source : https://www.irishtimes.com/life-and-style/homes-and-property/why-are-property-asking-prices-so-often-lower-than-sale-prices-1.4779729838