Calculate the ‘right price’ to pay for a property

How do you know when the asking price is the right price?

There’s lots of property on the market that is overpriced, and yet others go for above asking, so how can you commit to a purchase without knowing what the ‘right price’ will be?

Overvaluing occurs for several reasons. Estate agents can find themselves in a tricky position, trying to win an instruction when competing in some kind of beauty parade. Overvaluing may be the only way they can take the instruction. Alternatively, they may be pressurised by the vendor to put the property on the market at a higher price than they would otherwise recommend.

Putting a market value on houses is an objective exercise – three agents will rarely come up with the same value on a property, and the more unusual the property, the greater the discrepancy is likely to be.

So how, as a buyer, do you establish the ‘correct’ price for a property?

The asking price is rarely the right buying price. Our advice is to view the asking price as a guide price on which to base your calculations. There are several factors to take into consideration, but if you do your research, and use this equation to make sure you don’t overlook crucial elements, you will come up with a figure that is a sound basis from which to negotiate.

Stacks’ magic formula for the ‘right price’ is this:

B = A – M – V – Bf + CI + R

Where:

B = Buying price

A = Asking price

M = Market discount (Local market conditions and recent comparables)

V = Vendor desperation (How badly the vendor needs to sell)

Bf = Buyer flexibility and attractiveness (How flexible you are in terms of timing, cash buyer, etc.)

CI = Competitive interest (How many other buyers are interested)

R = Rarity (How often a property like this one comes onto the market)

As equations go, it’s not entirely scientific. And it’s not straightforward putting a value on ‘buyer attractiveness’ or ‘vendor desperation’, but you can come up with educated estimates. For instance, if you are a cash buyer who is happy to fit in with the vendor’s desire for, say, a long completion date, then you could look at deducting somewhere between 2% and 3%. And if the vendors are going their separate ways and anxious to move on, then another 5% discount could be on the table.

The ‘right price’ for you may not be someone else’s right price – you need to do some deep thinking as to whether this is the only house for you (probably not, but perhaps) or whether you are the type of person who needs to have ‘done a deal’ in order to be satisfied with your purchase.

Once you know your own position, there are more considerations to add to your rationale :

  • Remember, once you’ve made an offer, there’s only one direction the price is going to go, and that’s up. So don’t start too high.
  • A useful exercise is to ask the estate agents how they arrived at the price – was it based on some science (if so, what), or just what the vendor thought it should be?
  • However punchy your offer, it pays to be a likeable buyer. Nobody likes an aggressive purchaser and some vendors will refuse to deal with you any further if you push too hard – remember this is someone’s home and not just a commodity. And always negotiate through the agent, not directly with the vendor.
  • Don’t be pressured by the agent, and don’t always believe that there’s another buyer who has just happened to come out of the woodwork. But be careful, sometimes there really is, so don’t try and be too clever. It’s a calculated risk how far to push negotiations, so don’t back yourself into a corner and allow a third party to nip in whilst you are procrastinating!

In the end, the price agreed has to be one that both buyer and seller can live with, and which will encourage all parties to co-operate towards a successful exchange and completion.

The best guarantee to be sure you are paying the ‘right price’ is to have the ‘right team’ on your side.  Your local Buying Agent knows the local market, competitive interest and can position you as the best purchaser.  Find out more on how Stacks helps people just like you here.

You may also be interested in

view more

Winning tactics in property negotiation

Understanding the vendor’s motivations is key to bagging a property bargain, say Stacks Property Search, the UK’s longest-running Buying Agency, and have added have added another 2 Ds to the traditional three main drivers of property sales: Death, Debt, Divorce… and Developers ….and Divesters. In the current market there are very few...

How to househunt wisely in Winter

Winter is the best time to househunt in the UK (Why?) but you’ll need to take some particular precautions if you’re going to do it well….   Wait until the weather’s particularly bleak (snow and ice is ideal), and drag yourself away from the fire for a drive-by of the property you’re interested...

What’s involved in going to ‘Sealed Bids’?

According to a new report from Stacks Property Search & Acquisition, despite low property transaction levels, there is still a significant number of properties going to sealed bids. Sealed bids are a device used when demand significantly exceeds supply, especially for a ‘special’ property. It may be a property with compromises, or...

5 Websites Full of Properties with the WOW Factor

Whether you are in the market to buy luxury UK property or simply enjoy exploring the world of high-end property, it can be hard to locate the absolute cream of the crop. At Stacks, we find and acquire properties for clients at all levels of the spectrum, and many of the properties...

Start your property search today

Call us on +44 (0) 1594 842880 or complete the form below

Your Details



Your property requirements:

Status:
SoldThinking of movingOn the marketExchangingIn rented accommodationCash buyerIn need of helpOther


We will never share your details with a third party. For more information about how we handle your data, please see our Privacy Policy

How we can help you
View our services

When making probably the most important financial decision of your life, it pays to have the right advisors at your side.

"found precisely what I was looking for, and even on my request made an offer before I had even seen the property!!"
2018-11-21T12:35:46+00:00
"found precisely what I was looking for, and even on my request made an offer before I had even seen the property!!"
"Through the whole process they went above and beyond, and it was worth every penny!"
2018-11-21T12:59:15+00:00
"Through the whole process they went above and beyond, and it was worth every penny!"
"I would recommend using Stacks as they are well connected to the property market and provide a realistic assessment of activity and pricing."
2018-11-21T12:45:49+00:00
"I would recommend using Stacks as they are well connected to the property market and provide a realistic assessment of activity and pricing."
"Stacks had the critical combination of expertise and tenacity to broker a solution for us"
2018-11-21T12:52:31+00:00
"Stacks had the critical combination of expertise and tenacity to broker a solution for us"
"was fantastic at explaining and helping us with everything that was happening"
2018-11-21T13:07:43+00:00
"was fantastic at explaining and helping us with everything that was happening"
“We want to thank you so much for the very professional and sensitive support you have given us in navigating through the various properties we have considered for investment of our small inheritance.”
2018-11-05T22:55:02+00:00
“We want to thank you so much for the very professional and sensitive support you have given us in navigating through the various properties we have considered for investment of our small inheritance.”
"Relentlessly provided us with the context and facts we needed to make an informed decision "
2018-11-21T12:50:28+00:00
"Relentlessly provided us with the context and facts we needed to make an informed decision "
"Would not hesitate to use you again."
2018-11-21T13:16:29+00:00
"Would not hesitate to use you again."
"found us a home in a sought-after area with a high demand for properties and very little on offer"
2018-11-21T12:37:14+00:00
"found us a home in a sought-after area with a high demand for properties and very little on offer"
"a fantastic job in impossible circumstances"
2018-11-21T12:17:11+00:00
"a fantastic job in impossible circumstances"
"always courteous and pleasant, and most importantly, in our opinion, trustworthy."
2018-11-21T12:19:57+00:00
"always courteous and pleasant, and most importantly, in our opinion, trustworthy."
"Without somebody on the ground asking the right questions on our behalf, finding a home would have been truly impossible."
2018-11-21T13:15:37+00:00
"Without somebody on the ground asking the right questions on our behalf, finding a home would have been truly impossible."
"I’ve seldom had such consistent, wise support in a major life decision, and I can’t emphasize enough how helpful it is."
2018-11-21T12:46:40+00:00
"I’ve seldom had such consistent, wise support in a major life decision, and I can’t emphasize enough how helpful it is."
"We would have absolutely no hesitation in recommending them to anyone thinking of using such a service"
2018-11-21T13:13:46+00:00
"We would have absolutely no hesitation in recommending them to anyone thinking of using such a service"
"utterly tenacious..."
2018-11-21T13:06:52+00:00
"utterly tenacious..."
"You made a huge difference to our search as I am sure you do for all your clients."
2019-05-02T11:00:08+00:00
"You made a huge difference to our search as I am sure you do for all your clients."
"Because I had invested in the process of working with a Buying Agent, I had the confidence to go ahead"
2018-11-21T12:21:23+00:00
"Because I had invested in the process of working with a Buying Agent, I had the confidence to go ahead"
"delivered a great service at a reasonable cost"
2018-11-21T12:30:52+00:00
"delivered a great service at a reasonable cost"
"We now own a most suitable house in the position of our dreams thanks to Stacks"
2018-11-21T13:11:13+00:00
"We now own a most suitable house in the position of our dreams thanks to Stacks"
"They've been a close and very helpful part of our discussions with everybody. When you’re new to a town and an area, that’s priceless."
2018-11-21T12:58:19+00:00
"They've been a close and very helpful part of our discussions with everybody. When you’re new to a town and an area, that’s priceless."
"Stacks has been an invaluable source of experience and wisdom on the successful landing of just the right house"
2018-11-21T12:53:20+00:00
"Stacks has been an invaluable source of experience and wisdom on the successful landing of just the right house"
"Stacks takes great pride in their service, is an expert in their field and above all, demonstrated integrity in all our interaction with them"
2018-11-21T12:54:09+00:00
"Stacks takes great pride in their service, is an expert in their field and above all, demonstrated integrity in all our interaction with them"
"I gained a house, setting and location which are right for me"
2018-11-21T12:43:48+00:00
"I gained a house, setting and location which are right for me"
"The best decision we could have made!"
2018-11-21T12:55:52+00:00
"The best decision we could have made!"
"You have found us a superb home which we feel fortunate to call our own."
2018-11-21T13:18:39+00:00
"You have found us a superb home which we feel fortunate to call our own."
"helped our parents downsize from the family home, in what was a traumatic move for them"
2018-11-21T12:41:04+00:00
"helped our parents downsize from the family home, in what was a traumatic move for them"
"You saved me many miles of driving and were very professional"
2018-11-21T13:19:40+00:00
"You saved me many miles of driving and were very professional"
"You have exceeded our expectations for a buy-side property service and have made the process a smooth one for us."
2018-11-21T13:18:01+00:00
"You have exceeded our expectations for a buy-side property service and have made the process a smooth one for us."
"got our offer accepted even when it was not the highest"
2018-11-21T12:38:34+00:00
"got our offer accepted even when it was not the highest"
"You were able, by taking on much of the responsibility and the effort, to enable us to relax and enjoy the process"
2018-11-21T13:21:20+00:00
"You were able, by taking on much of the responsibility and the effort, to enable us to relax and enjoy the process"
"It made a potentially very stressful process very straightforward"
2018-11-21T12:48:37+00:00
"It made a potentially very stressful process very straightforward"
"They didn’t try to persuade us to buy anything unsuitable."
2018-11-21T12:57:31+00:00
"They didn’t try to persuade us to buy anything unsuitable."
"Your advice on how to effectively instruct and motivate our professional team allowed us to complete in one month."
2018-11-21T13:22:31+00:00
"Your advice on how to effectively instruct and motivate our professional team allowed us to complete in one month."
"Well done in taking us to a house we didn’t know we wanted … and then fell in love with!"
2018-11-21T13:14:45+00:00
"Well done in taking us to a house we didn’t know we wanted … and then fell in love with!"
“We really enjoyed working with Sara and Stacks and would highly recommend having them on your side in the home buying process”
2019-06-19T13:54:55+00:00
“We really enjoyed working with Sara and Stacks and would highly recommend having them on your side in the home buying process”
"...negotiate on anything"

Financial Times

2018-11-06T14:00:36+00:00

Financial Times

"...negotiate on anything"
"We are delighted with our choice and so are the children."
2018-11-21T13:08:49+00:00
"We are delighted with our choice and so are the children."
"Should I move again, I shall definitely use you again"
2018-11-21T12:51:23+00:00
"Should I move again, I shall definitely use you again"
"Thank you very much for the professionalism, patience and understanding"
2018-11-21T12:55:04+00:00
"Thank you very much for the professionalism, patience and understanding"
"The house is ideal ... and it is nothing like our first (unsuitable) ideas!"
2018-11-21T12:56:37+00:00
"The house is ideal ... and it is nothing like our first (unsuitable) ideas!"
"...took just days to come up with the property that fitted all our criteria"

Sunday Telegraph

2018-11-06T13:59:47+00:00

Sunday Telegraph

"...took just days to come up with the property that fitted all our criteria"
"a calming, guiding presence where nothing was too much trouble"
2018-11-21T12:13:26+00:00
"a calming, guiding presence where nothing was too much trouble"
"We were moving country – had booked the packers – and had nowhere to move into!"
2018-11-21T13:12:46+00:00
"We were moving country – had booked the packers – and had nowhere to move into!"
"carried out with discretion"
2018-11-21T12:28:29+00:00
"carried out with discretion"
"In essence, you are buying your best ally "
2018-11-21T12:47:38+00:00
"In essence, you are buying your best ally "
"We love the house and cannot wait to move in and get settled."
2018-11-21T13:10:27+00:00
"We love the house and cannot wait to move in and get settled."
"I completely underestimated how much of a difference you would make"
2018-11-21T12:43:03+00:00
"I completely underestimated how much of a difference you would make"
"Practically, I needed someone to do the legwork and the eye-balling"
2018-11-21T12:49:38+00:00
"Practically, I needed someone to do the legwork and the eye-balling"
"Being able to 'stand behind' Stacks, whilst they brought their negotiating skills to the fore, took us to another level"
2018-11-21T12:22:38+00:00
"Being able to 'stand behind' Stacks, whilst they brought their negotiating skills to the fore, took us to another level"
"You we able to give us confidence that we were doing the right thing"
2018-11-21T13:20:39+00:00
"You we able to give us confidence that we were doing the right thing"
"We were in a tricky housing situation, looking to buy a very specific type of house and needing to find it in a very specific time frame"
2018-11-21T13:12:00+00:00
"We were in a tricky housing situation, looking to buy a very specific type of house and needing to find it in a very specific time frame"
"You have an empathetic approach which, added to your knowledge and wise guidance, has made the whole thing a lot less stressful"
2018-11-21T13:17:15+00:00
"You have an empathetic approach which, added to your knowledge and wise guidance, has made the whole thing a lot less stressful"
"We cannot imagine how long it would have taken us to find our perfect home without Stacks – and we suspect that we would have compromised a long time ago!"
2018-11-21T13:09:36+00:00
"We cannot imagine how long it would have taken us to find our perfect home without Stacks – and we suspect that we would have compromised a long time ago!"
"great value to us during a difficult, competitive purchase"
2018-11-21T12:39:48+00:00
"great value to us during a difficult, competitive purchase"
"Despite other interested parties, Stacks were able to help us secure our preferred property."
2018-11-21T12:32:12+00:00
"Despite other interested parties, Stacks were able to help us secure our preferred property."
"extremely helpful, knowledgeable and tireless in their efforts to assist us"
2018-11-21T12:33:22+00:00
"extremely helpful, knowledgeable and tireless in their efforts to assist us"
"How extraordinary to have found what we were looking for"
2018-11-21T12:42:07+00:00
"How extraordinary to have found what we were looking for"
"I needed the continuous advice and support on the many issues that can and do arise, and, above all, someone acting in one’s own interest."
2018-11-21T12:44:59+00:00
"I needed the continuous advice and support on the many issues that can and do arise, and, above all, someone acting in one’s own interest."

Click here to read more of why our clients need our help