Currently trying to sell your property? Well, it may be overpriced.
There is an ‘obviousness’ to establishing whether this is the case, however there are beginning to be growing levels of industry comment on the epidemic of asking prices that are too optimistically set. Not before time really, given that the mis-match between asking prices and achievable prices has been predominant since the market peak of 2007. eMoov have written plenty on the ‘reality gap’ between the amount that sellers want and the figure that they are likely to actually achieve. Don’t take our word for it… The Halifax house price index is 15% lower now than five years ago. Yet Rightmove asking prices are, on average, at exactly the same level. Isn’t this logical demonstration of the real world struggle between aspiration and the actual.
Rightmove have recently surveyed 40,000 home movers and found that a growing number believe that ‘local house prices are above what is fair and reasonable’. And some 37% more respondents blame over-pricing by sellers and, of course, estate agents than did last year.
So these are the facts.
Accuracy in pricing is the fundamental issue to tackle head on when selling your home. Much more so than the number of photos displayed online or the amount of text in your ad. The number of cupboards shown and the way in which the doors hinge on the floor plan are, frankly, of little importance to a cursory glance from a potential buyer scrolling through several dozen listings on Prime Location, FindaProperty et al. The average time that someone spends looking at each internet ad on a search page? 2.7 seconds says research from Rightmove.
But if you remain unconvinced at the weight that an honest asking price has, then put it to the test. Market your property at any figure that you like. And wait a while.
Assuming your chosen agent advertises sufficiently then lack of interest can only mean one, stark thing. If the market turns its back, it will be due to their perception of your price in a market that is crowded with sellers. This is the uncomfortable truth as to why viewers are not attracted to pricey properties.
The market itself decides the price that a property achieves. It cannot be deceived or side stepped. Buyers are ever resourceful and know their stuff when it comes to justifying what they buy and for how much. The internet has seen to that. And it really doesn’t matter that a local estate agent may have told you what you wanted to hear when they popped round to ‘value’ your home. Estate agents are hardly renowned for their candour. We all know that. So why believe them just because they tell you that they agree with your financial ambitions? The oldest trick in an estate agent’s book is to flatter a potential client with hope followed by you signing on their dotted line, so tying you in to a nice, long sole agency agreement.
So, a reduction in asking price is warranted by the majority of sellers on the market today. Indeed Rightmove say that around 70% of the 1.2m properties for sale currently are overpriced.
But if you are wise enough to grasp the nettle of truth and drop the amount that you are advertising at, do make it a meaningful adjustment.
Lowering from £129,995 to £128,995 really won’t cut it.
The correct amount? Well, given the 15% reality gap as mentioned, you need to consider something as bold as 5% off your asking price. If that is too heavy for you then you may have to prepare for a long haul indeed by waiting for prices to catch up with your aspirations.
Herein lies the voice of reason. Unusual in our industry as that is….