Tag Archives: asking price

Table with magazines on top Dropping your asking price when your house won’t sell

Table with magazines on top Dropping your asking price when your house won’t sell

If you have had your house on the market for some time without success, dropping your asking price may seem an inevitable, if undesirable, next step.  Your estate agent will often suggest this move if they have run out of ideas, motivation and most importantly, confidence in your asking price.

But is dropping your asking price really the answer to selling your home more effectively?

It’s true that for some properties, reducing the asking price can generate new interest from buyers who would have been previously unable to afford your home.  It’s also a step that for some sellers, is unfortunately necessary, if they have an urgent move, for example, or are facing repossession.

However, with many houses – particularly premium homes – dropping your asking price is not always the answer, and in fact it can even harm your chances of selling your house effectively.

I’ve compiled these DOs and DON’Ts of dropping your asking price to help you get the result you want and move on with your life:

DON’T drop your asking price by less than 10%

Or it just won’t make any difference to the interest you get. Buyers will usually look at homes 10% either side of their budget anyway so you’ll need to reduce by at least that to get noticed by a new set of buyers.

DO ask your agent why you need to reduce

– Your property was originally valued based on sound research and by an expert in the industry.  What’s changed? Understanding whether your agent misjudged the market, or the demand has changed for houses like yours, will help you make the right decision to either reduce or to stick it out.

DON’T keep making small drops in price

–  A price drop can cause suspicion among buyers, who may wonder what’s wrong with it?  Why have you lowered the asking price?  A buyer may not want to risk buying a house that seems to be falling in value. Each drop can signify a red flag to a buyer, so make your drop big and impactful, but make it just once.

DO drop to the next Rightmove price banding

– You can find these by going to www.rightmove.co.uk and entering a search. The list of price bandings that comes up is your guide as to the price your house should be marketed at. For example, there’s no point at having an asking price of £399,999 when the Rightmove banding is £400,000. You can read more about this subject here.

DON’T try to break the ceiling for your road or area

– Not only does this make buyers jittery, it will also make your surveyor nervous, too. Unless you really can’t avoid it, try to price your home at less than the highest price sold in your neighbourhood.

DO ask your agent the right questions before you drop your price

– If you’re feeling pressure from your agent to reduce, or you have a moving deadline looming and can’t afford to drop your price, ask your agency what else could be done to secure that sale, other than reducing your asking price. Have a review with them and look at your marketing critically. Could it be improved? A new twilight image or drone shot could show your home in a whole new light and generate new interest from motivated buyers.

DON’T give your buyers an excuse to make a low offer

– Make sure your home is wonderfully presented, with every room polished and attractive, otherwise you’re literally leaving money on the table. Home staging can add thousands to your asking price and making a few small changes now can help you reap the rewards when you do get an offer.

DO give yourself some negotiation room – but not too much

–  On average, you can expect to achieve around 95% of your asking price, with 5% lost in the negotiations with your buyer. This will depend on other factors of course, like how fast your local market is moving, the confidence in the housing market while you’re selling and how long your home has been on the market. Taking 95% as a benchmark, losing 5% of a £400,000 asking price means you will eventually receive £380,000 on completion. But if you reduce the asking price to £375,000 say, you’ll only get £356,250; quite a drop. Not only have you reduced by £25,000, you’ll also have lost an additional £23,750 in negotiations, putting your total ‘lost’ sale monies at £46,750, a significant loss of 12% of your original asking price.

DON’T forget to analyse your price per square foot

– it’s a far more accurate way to value a house than other methods. If your agent hasn’t already done this for you, make a spreadsheet of the other properties for sale and sold in your area and calculate the price per square foot of each, then compare it to yours. Read more about this way of valuing here – Price per square foot – a more accurate way to value

When your home hasn’t sold and you’re wondering if it’s the asking price to blame, use the above DOs and DON’Ts as a checklist to see if you’re doing everything you can to get your house sold. If your price per square foot is about right and you’re not trying to break the price ceiling for your area, and your home is presented in the best way possible, and you have time to wait it out, then have confidence in your asking price. Because if you don’t, no one else will

Happy selling

Sam

At HomeTruths, a very important part of our service is to provide to our clients a comprehensive and detailed report on their asking price. We look at several different data points in order to establish whether they are still achievable. In the vast majority of the time, we report back, much to our client’s relief, that we believe they should continue to market at their chosen price, or even at an increased level.

However, we are not the only party to be convinced. There are three other parties who, if not confident that your house is worth its price, can sabotage your property sale. Let’s have a look at the implications of their influence in turn:

Your estate agent. If your agent does not have confidence he can sell your home for the price you want, this lack of support will eventually filter down through the branch staff, and be in no doubt, to your viewers. It only takes a careless remark, such as “the vendors are very flexible” or “it’s always worth making an offer” and a buyer will get the subtle message that the agent does not support the asking price. The solution is to gather all the data you can regarding any houses sold in your local area, comparable properties currently on the market and even, if your maths is up to it, a price per square foot comparison table, showing how much house a buyer is getting for their money.

Your buyer. They are probably the best informed out of these three parties, as they are likely to be looking only within a particular price range, geographical area and house type. This makes them a ‘temporary expert’ of a house such as yours. If they don’t feel your house is worth the asking price, they may not even make an offer. The solution is to make your house as appealing for the 21st century buyer as possible, and compete strongly on features and presentation. Your marketing sets the scene, so ensure your brochure, photography and online advert are giving the right message, and back it up with a house that sells itself to a viewer.

Your buyer’s lender. This is a very important point: your estate agent may agree to market your home for a very optimistic price, and your buyer may get carried away enough to offer the asking price, but if he needs a mortgage, it’s the lender who makes the final decision. Their valuer will take a very cautious and guarded view of the value of your house, particularly if your buyer needs a relatively high loan amount. The solution is to present the valuer with your own dossier of comparable evidence to support your price. He will, of course, compile his own data from various different professional sources, but any information you can supply that will make his life easier, and your agreed purchase price more realistic, will really help to support your argument.

The lesson here is that preparation will really put you in a much stronger position and make your eventual sale price more likely to put a smile on your face.

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.

Twenty years ago, a search for your next home would start and end with the estate agent.  Agencies were town centre offices, busy with buyers and sellers all day, and the phones ringing off the hook.

Ten years ago, agents’ websites were the place to look for your new place, which often meant trawling through a slow and clunky website for each of perhaps ten or more agents in your chosen area. (Then give up and phone the office anyway.)

Today, it’s a whole new world.  Homebuyers conduct their searches on Rightmove, Zoopla and Primelocation, at their leisure, over a glass of wine, watching tv, or during a break (or not) at work.  Agents now have no influence over which properties a purchaser will view, moreover, that buyer is completely anonymous and invisible to the agent, right until the last moment, when they call or email to book a viewing on a property they have chosen to see.

Because of this new way of searching for homes, your property advert on the portals becomes the only method of persuading a buyer your property is worth viewing.  It’s vital therefore, that it works.    A buyer needs to take 5 steps before they book a viewing, and you can help facilitate this journey, and give yourself the best possible chance of that buyer choosing to view your house:

STEP ONE: Get found in a property search:

If your property doesn’t show up in an online search, you have zero chance of generating a viewing! Firstly, check the agent has listed you correctly, in terms of postcode, number of bedrooms and type of property.  Mistakes here are surprisingly common so do check carefully.  Next, make sure your asking price is optimised for the portals.  (This post gives more information on this subject.) Simply put, your price needs to exactly match one of the drop down price bandings in the property search box, complete with the three zeros on the end.
Rightmove

STEP TWO: Sell the ‘Click’

The ‘summary advert’ that appears in search results has only one job – to persuade someone to click on that advert.  It is not there to sell the house.  No one will book a viewing from this page; they need to see more information, and they can only see that by clicking your advert.  To make your advert clickable, you need to have a terrific main image, and a really punchy, carefully crafted headline.
Rightmove

STEP THREE: Get them excited with your photo gallery

An interested buyer will look through your images at least two or three times.  It’s vital therefore, that these images all really sell your property.  They need to be professionally taken (ideally), well lit, of beautifully presented rooms, with the external shots taken on a blue sky day.  Don’t overwhelm them with 40 photos (read more here), but do give the buyer enough to want to see more.  I’d suggest you need around 12 images for a 3 bedroomed home, less for a small flat, more for a mansion.  But definitely no more than 20, or you will be showing so much that a buyer doesn’t need to view!

Rightmove

STEP FOUR: Make your brochure accessible 

Has your agent produced a digital brochure for you? Take a look at your Rightmove advert – can you find the link?

Rightmove made some changes to their advert format a couple of years ago, and unfortunately, in their wisdom, decided that the best place for a brochure link was right down at the very bottom of the page.  (It used to be at the top, above the map, which was much better.) The problem is that buyers need to see the brochure before they book a viewing.  Rarely will they decide to view your home without reading the information in your brochure.  Therefore it stands to reason it needs to be at eye-level when they are looking at your advert.  The only way to do this, is to remove almost all of the ‘Full Description’ text.  I suggest that the ‘Main Feature’ section is limited to 5 bullet points, and the text below is written especially for this advert, rather than simply drawn out of the brochure.  If you keep this to a 100-150 word paragraph, you’ll see that the brochure link now sits just below the level of the bottom of the map.  Now add a final line which states “Click the brochure link below for more photographs of this beautiful home”.
Rightmove

STEP FIVE: Reward them for opening your brochure:

There’s something very disappointing about opening a digital brochure and seeing exactly the same images and information as is contained in the online advert.  You need to reward your buyer for going to the trouble of finding the link to your brochure and downloading it to view. Add new, different images and lots of well-written words, so that they will feel interested and also satisfied that they now know enough to book a viewing on your home.
Property brochure

So that’s it – five steps to helping your viewers on a journey that will hopefully result in a viewing for you.  If you need more information on this critical area of your marketing, or your agent is less than cooperative over making changes to your advert, please get in touch; I’d be glad to hear from you and help you to reach your moving goals.

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 do next: Sign up to my Selling Secrets https://www.home-truths.co.uk/selling-secrets

I was once called in to help a homeowner with a beautiful Georgian home in Chichester.  He and his wife had been trying to sell their house for a soul-destroying seven years. If you asked any of the six or so estate agents who had tried and failed to sell the property, why hadn’t it sold, they would chorus as one: it’s the price.  That’s always the reason a house won’t sell, right?

But this house had already dropped in price by a staggering 33%, and was now starting to actually look cheap when compared with the competition, so I knew it wasn’t the reason for the lack of a sale.  Once I’d played detective, I uncovered a whole raft of issues I felt were stopping the house from selling.  We tackled those fairly inexpensively, put the asking price up, sprinkled on a little luck and hey presto, the house was sold inside a month. Once I had identified the factors that were stopping this house from selling, the owners were happy to rectify the issues.  Until my visit, they hadn’t known they existed.

The first step in turning round a failing property sale is to identify what has gone wrong so far. Until you do this, how can you put it right? Whilst estate agents will assume the asking price is too high, (often a price they themselves valued it at) I will look at all the other factors, including the way the house is presented, whether that’s right for the target market, the motivation of the seller, the subliminal messages that the photography and words are conveying, and many other aspects that may not be apparent to the seller. (See also my post ‘Is there a hidden reason your home isn’t selling?’)

With all the houses I’ve helped sell over the last decade or so, there has almost always been a very subtle reason it wasn’t selling.  That reason would stop a buyer being able to connect with the house, and to see it as their new home.  Without this connection, it’s almost impossible to sell your house, other than to an investor with no emotional investment in the transaction.  But until you know the reason, you are relying on luck playing a huge part in your property sale. It’s a big gamble.

So when a client asks me “When will my house sell?” I reply simply, “When you’ve discovered why it’s not selling”.  Find that, and you’re almost there.

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 nextNine Ways To Sell Your House Fast: Easy on the sob stories, hide the kitty litter and don’t skimp on scented candles….

What to do next:  Sign up to my Selling Secrets https://www.home-truths.co.uk/selling-secrets

Sofa set Price on application? Forget it.

“Price on application” is a tag applied to some properties on the market, the price of which, for one reason or another, the agent or owner wants to keep secret. The theory is that an interested buyer will make the effort to call the agent, to find out the price, and even then, agents can prove to be cagey, to say the least.

So what is POA all about, why are some properties marketed this way, and most importantly, does it work?

A price can be kept secret for a number of reasons: the owner could have requested it, perhaps to keep this information from his neighbours or family; he could be a celebrity, and value his privacy generally, so this is just a natural extension of his cautiousness. There is usually only one reason for an agent to choose to market a house at POA: if he has absolutely no idea what it’s worth. He doesn’t want to commit himself to an asking price, so by marking the property without a price, in essence, he may hope to generate enquiries to help him gauge the likely interest and so determine a suitable asking price.

But – and it is a big but – if this property is marketed on the internet, POA doesn’t work! Once upon a time when the internet was just a baby (and so were most of today’s agents) an agent could make up an asking price on the spot when challenged by a buyer. These days, nothing is secret thanks to the internet. You see, when a property is uploaded to a property portal, POA is merely the descriptor; an asking price has to be selected. Therefore, all a buyer needs to do is to enter a wide search, in terms of asking prices and area, and the so-called secretly-priced property will magically appear in the slot allocated by the uploaded asking price.

Let me give you an example: if I enter ‘Reigate’ into Rightmove, with no upper price limit, I may get a list of properties with a POA property right at the top, with no way of knowing its real asking price. If however, I extend the area to say, 10 miles of Reigate, the POA property will then show in order and I will be able to see roughly where it sits. The reason the POA will probably show at the top of my list by the way, is that POAs tend to be in the upper price brackets, typically at more than £2.5 million.

POA is in my opinion, a little bit arrogant, misguided and it doesn’t work. Can you imagine if next time you go into your local newsagent, all the stickers on the cans of Coke and the baked beans simply say ‘price on application’?!

If you’re a seller with a unique, hard-to-price house for sale, don’t let your agent talk you into it, and if you’re an agent, re-educate your client so they understand why it’s such a bad idea.

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.

Price on App Forget it

What to read next: Don’t drop your asking price! 

What to do next: Sign up to my Selling Secrets https://www.home-truths.co.uk/selling-secrets

I was once called in to help a homeowner with a beautiful Georgian home in Chichester.  He and his wife had been trying to sell their house for a soul-destroying seven years. If you asked any of the six or so estate agents who had tried and failed to sell the property, why hadn’t it sold, they would chorus as one: it’s the price.  That’s always the reason a house won’t sell, right?

But this house had already dropped in price by a staggering 33%, and was now starting to actually look cheap when compared with the competition, so I knew it wasn’t the reason for the lack of a sale.  Once I’d played detective, I uncovered a whole raft of issues I felt were stopping the house from selling.  We tackled those fairly inexpensively, put the asking price up, sprinkled on a little luck and hey presto, the house was sold inside a month. Once I had identified the factors that were stopping this house from selling, the owners were happy to rectify the issues.  Until my visit, they hadn’t known they existed.

The first step in turning round a failing property sale is to identify what has gone wrong so far. Until you do this, how can you put it right? Whilst estate agents will assume the asking price is too high, (often a price they themselves valued it at) I will look at all the other factors, including the way the house is presented, whether that’s right for the target market, the motivation of the seller, the subliminal messages that the photography and words are conveying, and many other aspects that may not be apparent to the seller. (See also my post ‘Is there a hidden reason your home isn’t selling?’)

With all the houses I’ve helped sell over the last decade or so, there has almost always been a very subtle reason it wasn’t selling.  That reason would stop a buyer being able to connect with the house, and to see it as their new home.  Without this connection, it’s almost impossible to sell your house, other than to an investor with no emotional investment in the transaction.  But until you know the reason, you are relying on luck playing a huge part in your property sale. It’s a big gamble.

So when a client asks me “When will my house sell?” I reply simply, “When you’ve discovered why it’s not selling”.  Find that, and you’re almost there.

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 nextNine Ways To Sell Your House Fast: Easy on the sob stories, hide the kitty litter and don’t skimp on scented candles….

What to do next:  Sign up to my Selling Secrets https://www.home-truths.co.uk/selling-secrets

window with cat When every penny counts

Are you downsizing?

If you’re at that time of your life when you’re currently rattling around in a house that’s too big for you, that is consuming more time, effort and money than you want to give it, you may have decided it’s time to move on to the next chapter in your life. Perhaps you have your heart set on a cottage in the hills, a coastal retreat or just being closer to the family.

Your home may well be your most valuable asset, and when you’re hoping to make a new life for yourselves, and at the same time make sure you have a nest egg to fall back on, it’s vital you realise your home’s financial potential. Here are some of my suggestions to make sure that you leave your lovely home with enough money to make your move worthwhile:

  • Tell your estate agent – make sure they know how important your sale price is, and that achieving as close as possible to this is your primary goal; more important in fact, than selling quickly.
  • Allow negotiation room – make sure you pitch your asking price with enough of a differential between it, and the price you hope eventually to achieve. Try to resist the temptation of ‘testing’ the market at a higher price for a short time, as this strategy rarely works. Instead, do your research and set your price, then stick to it. Remember too that current asking price to sale ratios are at around 95% at best.
  • Stage your home – if you’ve lived in your home for more than 15 years, unless you’ve updated it regularly, chances are its interior may not be as up to date as today’s buyers expect. Whilst commissioning the services of a professional home stager may cost you a few hundred pounds, this will almost certainly prove to be a very worthwhile investment, and avoid buyers making low offers on the basis that your house is too dated for them.
  • Have confidence in your asking price – if you don’t, how do you expect your buyer and your estate agent to?! Be firm with your estate agent if he tries to persuade you to drop the price, and be equally firm – but fair – with your buyers when they make an offer.

Make sure you implement these four steps, and you’ll be embarking on your exciting new chapter with some pennies in your pocket to enjoy it.

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.

window with cat When every penny counts

What to read next: 3 things to do today to get your home sold

What to do next: Sign up to my Selling Secrets https://www.home-truths.co.uk/selling-secrets