We all want to achieve the best possible price when selling our home, while hoping for a bargain in the one we want to buy. However, research by Rightmove has shown that overpricing your home, even temporarily, can have a detrimental effect on the sale.
If you really want to sell your property you need to ask the right price – right from the start.
Analysis of Rightmove data over the last five years has shown that homes that have been reduced in price take longer to sell or may not sell at all. It is also twice as likely that the sale will fall through before completion.
Selling at the right price makes your home 1.35 times more likely to sell and half as likely that the sale will fall through. It will also typically sell more three times more quickly.
Home sellers can be over-ambitious or guided by their estate agent, who will earn more commission from a higher price sale. Estate agents have few properties on their books so might be tempted to attract home sellers by being optimistic about the value of the property just to get the listing. Invite several estate agents to value your home to compare both their services and valuation.
The market frenzy that followed the pandemic is now over, and higher interest rates and financial instability has led to more cautious home buyers who are less eager to snap up a property. Sellers who fail to adjust their expectations to reflect today’s housing market are in danger of losing a home sale.
If a price reduction is required, it is advisable to do it quickly – not months after putting the property on the market. You should get buyer interest within the first two weeks. Nearly 60% of homes reduced in price two to four weeks after being put on the market will sell, but fewer than 53% sell if the price is reduced after eight weeks.
The reduction should be sufficient to attract a wider pool of buyers, so make it worthwhile. Reducing your property price by 5-7% compared to reducing by 2% will increase your chance of selling by 15%. A 10% reduction will be even more effective.
If your home isn’t selling, look at whether the price is right as well as whether the agent is using every opportunity to market it. If the price is right, you should be getting viewings, so ask the agent what marketing activity they have pursued.
When valuing your home, look at how much similar properties are selling for in your area. You might even try asking less in the hope that buyers will bid against each other, while also achieving a quicker sale.
Remember that your buyer’s mortgage valuation inspection “survey” is carried out on behalf of the lender, who is protecting the interests of their client, and not carrying out a Building Survey. Overpricing the property beyond market value could result in your prospective purchaser pulling out because the mortgage valuation survey does not value the property high enough for them to be able to borrow sufficient funds.
Buying a new property? Savvy home buyers look for a new home on online portals, where it is possible to view price history and previous photos of properties. Make sure your new home isn’t a “quick flip” and ask an independent Chartered Surveyor for a Building Survey.