Tag Archives: asking prices

In their fascinating book Freakonomics, (subtitled “The hidden side of everything”) Levitt and Dubner explore the issue of estate agents’ commissions.  They propose that one way of discovering whether an estate agent is doing their best for their client, is to measure the difference in the results achieved for their clients, and those of their own personal home sales.

The results were not particularly surprising, at least, not to me.  (Incidentally, the best property brochure I’ve ever seen was produced by an estate agent to sell his own house.) It turns out that an estate agent keeps their own home on the market an average of ten days longer, and sells it for an extra 3%.  (On a £500,000 home, that’s £15,000.)  The book goes on to explain, “when he sells his own house, an agent holds out for the best offer; when he sells yours, he pushes you to take the first decent offer to come along”.

The authors believe that the difference in the agent’s commission between an asking price offer, and one say, 10% below the asking price, is so little that they will recommend the offer is accepted.

Let’s look at some figures: assuming a sales commission of 1.5% on a house worth £500,000, the seller will pay the agency £7,500, about 5% of which will go to the sales negotiator, or £375.  If an offer is received of £450,000, the negotiator’s commission will plummet to £337.50.  So he stands to lose £37.50 against the seller’s loss of £50,000.  Now imagine that this particular house has been on the market for a few months, it’s two more weeks until payday, and his girlfriend’s birthday is looming.  What is he going to do?

When the seller asks him for his advice on whether or not to take the offer, what is he going to say?  The negotiator would much prefer a certain £337.50 than a possible £375, and who can blame him?

Either we need better-trained, highly-motivated, somewhat altruistic negotiators with the integrity of a nun, or else we need a better system.  And for me, and all those sellers out there, it can’t come soon enough.

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.

Candle and books at the top of the table Estate agent commission

Don’t drop your asking price!

If your home has been sat on the market for longer than you even want to admit to yourself, you may be considering ringing up your gracious agent, and telling them to drop a few numbers from the big one. They may even be encouraging you to do it, too.  People buy homes on price, right? Wrong. Dropping your price is not the way to go, and can actually have a negative effect and create long term damage. Sound a bit farfetched, for something on offer to you? While it may do, you have to consider what people are thinking when they see a house reduced in cost. Get ready to change your mind…

Is something wrong with it? If a house is dropped in price, people begin asking questions. Why hasn’t it sold so far? What’s wrong with it? Why the dramatic price drop? Their image of the house won’t be rosy and optimistic; it will begin to look like a sale item. While your home may suddenly attract a few extra viewings, they’ll be walking around your house looking for the pessimistic side of your four walls, and wondering why it wasn’t snapped up already.

Quality issue – Even though when it comes to many material goods, many of us love a good bargain, it’s different when it comes around to property. With a long term investment, we want to feel like we’re buying in to something worthwhile and valuable, and often budgets are blown and overspent when purchasing the dream property. If a price is assertive and optimistic, it means it is being sold for what it is worth. Drop your asking price, and the quality of it will suddenly seem a little dented. Surprising, but true.

Confidence – If shares were falling on something, would you buy them? The same can be said for property; do you want to put in an offer on something that has decreased in value? A drop in price indicates a lack of confidence in your own home and its original price. If you want to install confidence in your buyer, show confidence in your own home!

Are you thinking of dropping your asking price, or is your agent persuading you to do so? Reconsider! Contact us, we can help.

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.

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It’s Friday and the last in my mini-series of learning from Andy Murray to help you sell your house! 

However on top of their game Andy is, if he wants to stay there, he knows he has to defer to his coach for advice and, well, coaching!  He has to put his total trust and faith in Ivan Lendl, and believe whole-heartedly that he has Andy’s success at heart, wanting the win as much as the player themselves do.  It must sometimes take a lot of courage and ability to overcome his own misgivings in following advice that might seem counter-intuitive, but he knows that without this faith, Andy would be on his own and success would almost certainly evade him.

If you’re trying to sell your home and it’s just not going very well – perhaps you’re suffering from a lack of viewings, and maybe you’re trying your best to resist pressure from your agent to reduce your asking price – you may be wondering what on earth you can do. That’s where HomeTruths comes in.  think of us as your personal property coach!  We ask you to put your trust and faith in us, and in return we will advise and coach you through what can be a very difficult and emotionally-trying time.  We’ll be there for the inevitable ups and downs, to tell you what to do when the feedback is less than flattering, or when you get a very low offer.  We will do everything we can to get you a sale at the price you want.  Sometimes, as I’m sure happens from time to time between Ivan and Andy, you might think we are wrong, that our advice is counter-intuitive, but stick with us, and keep the faith, and together, we’ll get you moving!

Coach

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.

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Fourth in my five-part series with the shamelessly contrived theme of Wimbledon! 

Andy Murray is exceptionally competitive.  To him, winning is everything.  Coming second is no consolation – it just means not winning.  He needs this competitive edge, this determination to win, in order to achieve success. He has to want it enough. Not only this, but he has to know his competitor’s game as well as they know their own. Only by completely understanding  the nuances, strengths and weaknesses of Djokovic’s game could Andy hope to beat him by being better, stronger and more creative.

How well do you know your competition?  Do you know what else someone looking in your price bracket can buy? You need to know what other homes are on the market that in any way could be your competition.  Look at their price in great detail, for example, what is their price per square foot, and how does that compare to yours?  What features are they offering? Is your conservatory equal in value and desirability to their pool?  Does your garden compete well against their paddock?

It’s difficult for a buyer to compare non-exact features such as these, as it’s like comparing apples with pears.  However, compare the houses is exactly what they will do, and they will make a balanced decision on which offers the better value, and the most house for their money.  Thus a young family will often choose a home with new fixtures and fittings over one with more space, but dated fittings; an older couple may well decide a home with two bedrooms and more character has more to offer them than a modern four bedroomed home on an estate. Consider carefully what your most likely buyer will look for, and give it to them.  And give it to them in spades.  Just like the tennis players, your game needs to be better, stronger and more creative, then you’ll beat the competition hands down. Just like Andy did.

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.

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notsohorselesscarriage_530

It was the great Henry Ford who said, “If I’d asked people what they wanted, they would have said a faster horse.”

If you ask a viewer what they think of an asking price, they will tell you it’s too expensive.  Why shouldn’t they?  If they don’t want the house, it will look too expensive to them, and if they are thinking about offering, their comment will help them to justify a low offer; it’s a win-win for them.

Don’t ask a viewer what they think of an asking price; their answer would be as relevant as asking a horse rider what car they want.

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.