Are you just chasing the property market?
Are you trying to sell your home and considering reducing the price? Read this article to discover whether you are reducing the price or chasing the market with your price reductions.
Marketing a property for sale can look very different to different people. Some homeowners want a hands-on agent involved heavily in the marketing process and diligently creating a structured marketing plan. Other homeowners simply believe that their home will sell itself if it is on the right platforms, and so they instruct the cheapest agent possible will fulfil that role, and they will sell.
Property marketing methods differ from agent to agent, from those who simply get your home onto the property portal websites to those who craft a bespoke printed brochure and create a TV-style video tour to wow sellers and buyers alike. Whichever way you want your home to be marketed, some fundamental elements must be done correctly from the outset.
In truth, most properties will sell regardless of how they are marketed. The critical point here is the price that is achieved. You could sell any property on the market if it is cheap enough; you employ an agent for their skill in selling homes and enabling you to maximise the figure that you ultimately sell for.
So, those agents that simply put your property online for you and you do the rest will sell your home. And the run-of-mill average agencies will sell your home. The nationwide corporate agents will sell your home. And the bespoke independent agencies will also sell your home. The sale is not in question - the value is what we are looking at.
It is so exciting to put your home on the market. You cross your fingers for the droves of viewers to come and look around, then wait for your phone to ring with the offers made.
But, if this is not your experience, you will most likely feel disappointed. And so, after a few weeks or months, you might start to think about how to increase viewers' interest. The most obvious option is to consider reducing your price.
For many sellers, this will start a chain of marketing, reducing, remarketing, reducing, remarketing, and reducing until, eventually, your home is at your absolute rock bottom price, where you will hopefully start to get some interest.
Of course, some homeowners and some agents can be a little overzealous when pricing a property, so you could have simply overegged it initially.
This will mean that if you don't sell quickly, you will have to reduce to a more realistic price range. If you started too high, you could have to continually reduce the price until someone eventually agrees to buy it. You are chasing the market, trying to entice buyers who have already overlooked your home because of the price and have instead snapped up the more realistically priced available properties. You now have work to do to make them see your home as a bargain, and it is far from ideal when selling your home to have to keep reducing the price. It certainly wouldn't be the marketing strategy you would have chosen, would it?
The danger here is that you may have lost that buyer who showed initial interest because they may have bought another property and stopped searching. And now you are left trying to entice a new cohort of property searchers to view your property.
The more significant danger comes if the market starts to slow down. You started off a little too high, meaning that if the market is dropping, your new reduced price is still too high. You are stuck in an endless chase of the market, trying to find a sale. If a buyer is savvy enough, they will have been watching your property reduce and reduce and will know that by now, you are probably getting more than a little desperate to sell. The buyer, therefore, is in a strong negotiation position and may try to hammer you down even further on price.
It would be much more powerful if you marketed at a competitive figure from the outset and sold quickly rather than waiting a few weeks to reduce and then a few more before you reduce again. And in reality, you will probably find that you achieve a higher-end sale price than you would have if you had embarked upon the arduous journey of overpricing to allow negotiation room and then repeatedly reducing the price until someone makes an offer.
Correctly pricing your home for sale is a skill and should not be overlooked. In business, there is a saying turnover is vanity, and profit is sanity. In property terms, valuation is vanity, and the sale price is sanity. Yes, it is flattering to think that the highest value quoted for your home is achievable, but make sure that you don't overegg the marketing price to such an extent that you end up chasing the market.
Your valuation figures mean nothing until they are a solid offer to buy. And so, you must ensure your pricing strategy is well-researched, evidenced, accurate and planned out properly.
For more information on how to value a property accurately, contact our team of property experts today.