It is probably safe to assume that if you have ever sold a property you will have considered dropping your asking price.
Some of you may have been asked by your agent to think about a price cut, others may have been advised it is the only way you are going to secure a sale. And did it work? If the answer is yes, chances are your house would have sold anyway.
At HomeTruths we believe you should never lower your asking price. And here’s why:
8 reasons why you should stick to your asking price:
1. In most cases the drop in price you make probably won’t make any difference to your buyers… whatever their budget. Unless you can afford to slash the price by at least 25% (and why would you?), it really won’t make an impact.
2. Your property was originally valued based on some sound research and by an expert in the industry. What’s changed?
3. A price drop can cause suspicion among buyers, what’s wrong with it? Why have you lowered the asking price? Not a good impression to make on your potential buyers!
4. Unless there is good reason, your house shouldn’t be the cheapest on the street/estate/area. Buyers want to feel they are getting something special. Lets face it ‘cheapest’ and ‘special’ don’t often go together in the same sentence.
5. If you are feeling pressure from your agents to drop your price, ask them what else could be done to secure that sale… put the onus back onto them. That’s what you are paying them for.
6. In today’s market most buyers will most certainly make an offer, not many people will go straight in with the full asking price. If you have already lowered your price, and then go on to accept an even lower offer, how much money have you lost? You do the math.
7. Dropping your price may lead to other properties in the area doing the same. Not only will you have driven down the overall value of homes in your area, but you will still be in the same ballpark as everyone else in terms of price. The net effect? You will be in a similar position as you were before you, except slightly worse off!
8. And finally, have confidence in your price, if you don’t, no one else will!
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.
I couldn’t agree more, Lisa. One simply cannot compete on price, otherwise there is only one way to go, and that is down!
Maybe Lisa needs to become an estate agent?
Unfortunately this article is so far off the mark it’s ridiculous. Sellers WILL have to drop their price because it is only worth what someone will pay for it.
So let’s say Mrs Smith has been on the market for 12 months without a viewing to her name, she should stick to her guns should she?!
Its a buyers market, I think you better give some better advice!
Thanks for your comment Northants Estate Agent.
If a property has been on the market for 12 months, with no viewings, my first question would be why has it been left so long before anything has been done….?
I agree that a house is only worth what someone is prepared to pay for it, but surely most buyers wouldn’t let the price tag put them off viewing it in the first place (assuming the asking price is in their ‘ballpark’).
So unless the price drop is going to be so significant that it would attract a whole new audience, I am not sure what difference it will really make. And if the price reduction is a significant drop, then I would question the original valuation.
At HomeTruths we believe so many more aspects should be considered to secure a sale, rather than resorting to a price reduction… and it seems to be working for us.
In my experience sellers nearly always push their house prices higher than they should, regardless of the agents intial valuation.
I do agree with many of your company’s practices (good photos, good marketing, home staging etc) but sellers almost certainly will have to be flexible on their sale price, BUT if they are buying onwards they will get a good deal on what they buy.
I find that buyers are VERY price sensitive, with so much choice on the property portals, they go with what they feel is a good deal. You’re right to say that taking £1,00o off an asking price is a waste of time, but if something is on for £130,000 and then gets reduced to £125,000 it will have a much better chance of selling.
Thanks for the reply
Sam,
Not dropping the price is great IF you know for sure that the price was correct in the first place. Land Registry statistics recently released (in conjunction with Halifax, Nationwide & Rightmove data) evidence that there is a disparity of 24% nationally between asking prices and selling prices.
It goes to show that either many agents are ‘winning the instruction’ by being extremely speculative with their valuation (no guesses as to why) or sellers are dictating to agents who are weakening just to get another property on their books, knowing it’ll never sell and the seller will eventually cave.
Unfortunately not every property looks as idyllic as some of the examples on your website, and there are some very average properties in average locations advertised at prices reminiscent of the end of 2007. There’s me thinking prices had fallen.
I agree very much with what you do and I think for some properties, staging is an excellent way if making a mark and making your property stand out from the competition.
For other properties its really as simple as pricing correctly. And the only way to do that is to help your seller understand that prices have fallen and the numbers of quality buyers have decreased and pricing correctly is the key, not speculatively (especially if the property simply doesn’t warrant it).
Best
James
Agreed James, but with unique houses this can be very tricky, as I’m sure you will agree. Most of our clients come to us having already dropped their asking price, sometimes more than once, from a price which was originally supported by several valuations. We’re not really talking vendor prices here, but substantiated and valuation-supported asking prices. Good point, thanks James.
The national average of agreed prices is 92.5% An agent needs to value it honestly, then produce the best photography, floor plan description and details they can. All web and print advertising needs to be first class. The agent needs to accompany every viewing and make the viewer feel relaxed. I have heard some agents rush when negotiating an offer, we love getting our clients more than their bottom line and so far this year at Cooper Adams we have achieved an average of 98.2% of the sale price.