January sale advice: why it’s all about the price tag
Reducing the price of your property can reap rich rewards if you are prepared to go low enough. Sharon Dale reports.
SLASHING the price of your home is a sure-fire way of reigniting interest, but for some sellers it presents a huge psychological hurdle.
They see discounting as shameful, desperate or an admission of defeat. They often fear being the subject of gossip among friends and neighbours.
Others feel they are being “mugged” and justify this by imagining what their £10,000 discount could buy them. A new car? A world cruise? How can we give that up? The reality is that their asking price is not what the market wants to pay so the equity is just wishful thinking.
If you relate to any of the above then you need to change your mindset, says Kevin Hollinrake, MD of Hunters estate agency.
“You certainly shouldn’t worry what the neighbours might think. There is no shame in it. Bite the bullet and reduce if you want to. We don’t think any less of M&S and John Lewis when they have sales, so why shouldn’t you reduce the price of your house? It’s a sales strategy and people like a bargain.
“As for that feeling that you’ve lost money, you haven’t if you are selling and then buying another home because chances are you’ll get a discount on that.”
The key to success is to make it an eye-catching reduction.
“You have to take a chunk off and it has to be at least five to 10 per cent off the asking price. So if it’s a £200,000 property, you are offering a buyer between £10,000 and £20,000,” says Kevin
“You also need to make sure that your agent ties this in with a fresh marketing campaign. They should be ringing round, doing mail-outs and flagging the reduction on the website and property portals. They should also look at changing the pictures on the internet and maybe using an interior shot as the main image just to give the property a new lease of life.”
Tony Wright, head of residential at Carter Jonas, agrees: “A discount has to be done at the right time and in the right way, and if that happens you should get some interest.
“We had a case recently where two new houses had been on the market for around two years with another agent. The developer came to us and we advised him to reduce the price by around 15 per cent, re-market and to have an open viewing weekend. As a result we agreed sales on both properties.
“In cases like that I think a big reduction of between 15 and 20 per cent is needed to really create a buzz. It will also put a house into a different price bracket.”
Another seller concern is that buyers will catch a whiff of desperation and will try and negotiate the price down further.
“I think that’s where the agent comes in. They have to take a firm line and point out that the vendor isn’t willing to consider further reductions. You get one or two who try it on but most buyers are actually happy to pay near the asking price for something substantially reduced,” says Tony.
He believes the time to consider price cuts can come as soon as three months on the market if there has been no buyer activity and the seller is motivated.
Of course, there may be no need to discount if you pitch the price right in the first place. Sellers who believe their property is worth what it was in 2007 need a reality check. Prices have fallen and buyers are thin on the ground and very choosy.
Before you put your property on the market, do some homework and check what comparable homes have sold for recently. You can do this on the Rightmove and Zoopla websites. Don’t be flattered by high valuations from agents who are desperate to get the business. It could mean your home lingers and will have to be reduced to a realistic price in the end.
“You should get three valuations,” says Kevin Hollinrake “Ask the agents to produce evidence for their valuations to make sure that they’re not just plucking a figure out of thin air and don’t always go for the highest.
“If you end up having to reduce don’t worry. It can pay pay off.”