Don’t drop your asking price!

The market is definitely quiet at the moment, it’s true. The buyers seem to have receded with the summer sun, and may not reappear until the daffodils emerge in the spring.

If you’re in a huge hurry to sell, then you may be considering dropping your asking price, probably egged on by your estate agent, looking for a quick sale at your expense.

However, dropping your asking price should never be a knee-jerk reaction to a slow market.  There are many factors to consider. At best, even a large price drop could make absolutely no difference to your viewings whatsoever, and at worst, it could actually damage long-term your likelihood of selling at anything close to the price you were originally hoping for.

So, let’s look at the psychological effects a discounted asking price could have on a potential buyer:

1. Wariness 

The initial surprise a buyer may feel which draws his attention to your advert is very quickly replaced by wariness and cynicism that something must be ‘wrong with it’ to have such a low price.

2. It invites analysis

Selling on price causes buyers to be more analytical of the offer – the bricks and mortar. Because their decision to buy is rational (based on £s) and not emotional (based on feelings), they will be searching for the downside – that leaky tap will be an issue, the soggy garden a serious problem. Buyers making their decision on emotions are looking at your house with roses-around-the-door-tinted glasses.

3. Low price = low quality

Buyers usually want to spend at least their budget, and often end up spending more. Think back when you bought your house – did you stay within your budget? We are conditioned to believe you get what you pay for. After all, if we bought on price, we’d all buy our clothes from Primark and drive around in Skodas. The truth is we like quality; we aspire to it; we deserve it. Show us a property slightly beyond our means and we will want it all the more. A confident, optimistic asking price says ‘buy me – if you can’.

4. Lack of confidence 

What buyer wants to offer on a decreasing asking price? Would you buy shares as they were falling?  When will it stop? Will your investment prove foolish? Each price decrease indicates the seller’s lack of confidence in his own asking price. If the seller isn’t confident, why on earth should the buyer be?!

So before you drop your asking price, remember the passionate belief of all of us at HomeTruths –

People do not buy homes on price.

If you’d like my help to sell your home more effectively, please answer a few short questions here and if I think I can help you, I’ll be in touch.

What to read next: Dropping your asking price isn’t the answer! 

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2 thoughts on “Don’t drop your asking price!

  1. Ron Hastings

    Couldnt agree more. In a slow market a price drop is rarely the answer so long as you got the price right at the start and do everything you can to really sell your house. We recently sold a house that had been languishing on the market with another agent for 7 years. The sellers had not separated and divorced but still stuck together with this joint asset and there lives were on hold. They had given up on any attempt at marketing and simply left it with their agent to fester on their website and by the time we got involved the price had been reduced from the valuation of £265,000 to an asking price of £225,000 but not serious or suitably matched viewers. They had even renewed the central heating boiler but to no avail. Most significantly it was clear that they had given up and the house was poorly presented . We advised on remarketing revalued and put price up £10,000 and with better staged photos re marketed. Result sold full price in months with marketing and legal work all handled by our one stop team now both bought their new homes (separately) and able to move on with their lives. Dropping price wasn’t the answer although as you say once it has dropped and given the no place to hide nature of the Internet it’s difficult to recover to anywhere near the original price and after 7 years buyers are going to be asking serious questions. Naturally coming new to us after a rest helped profile but price history and previous marketing is an open book. Your home truths should be read by every agent and every seller to understand the psychology of selling and the need to choose an on the ball agent. Going with the wrong agent or doing it yourself and getting it wrong can seriously damage your wealth.

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