11 October 2013, The Times
Get the pricing right, have your paperwork in order and proceed with caution if you want to sell in this unusual market by Jayne Dowle
Talk of a house price boom is tricky for sellers. Do you price high to take advantage of the improving forecast? Or go lower to entice a buyer while the going is good? “In this unusual market, pricing becomes a nightmare for selling agents and vendors alike,” says Edward Heaton of the property consultancy Heaton & Partners. “There has been a tendency in certain quarters to price high in order to win instructions. Sadly, this can often kill marketing dead in the water. As a seller, be aware of this and be wary of what appear to be inflated prices. Greedy vendors and bullish agents do the market no favours.”
Proceed with caution seems to be the professional consensus. So what else can experts tell us about getting the best price for your home right now?
1. Do your research before you meet estate agents by checking prices of comparable properties online through portals such as Rightmove and Zoopla. That way, you can hold an informed discussion before you agree what to put your own home on the market for. Don’t be misled, though. “Make sure you look at sold prices as they can be massively different to ‘for sale’ prices,” says Alastair Hart, the divisional director at Hunters estate agency. See landregistry.gov.ukfor official sold prices, but bear in mind the time lag for properties to be registered.
2. Don’t be afraid to put agents on the spot. Invite three to price your property. “Ask them to justify the figure they put forward with evidence of what else has sold recently and what else is currently available,” says Douglas Sleaper, the sales director at the Townends estate agency. “Any good estate agent will be able to show you exactly how they have arrived at their figure.” Don’t be arrogant, though, adds Alexander Leon, sales manager at Henry & James estate agency. “Asking more than the agent recommends is foolhardy and typically results in the house sticking on the market and becoming stale, before the price is eventually dropped, by which time buyers have lost interest.”
3. “When choosing an estate agent, don’t always choose the one who claims they can secure the highest price for you,” says Alexander Gosling, director at housesimple.co.uk, an online estate agency. “It’s a common tactic by agents to out price their rivals just to get clients signed up. Once your property has been on the market for a week or two with no interest, then comes the call from the agent recommending you drop the price.” If you find yourself with no choice but to do just that, Graham Lock, co-founder of the online estate agency House Network, advises a subtle approach: “Gentle price reductions always seem to work better than huge, sudden drops. Sometimes this can spook potential buyers into thinking, ‘What’s wrong with this property if there is such a large reduction?’
4. Getting the best price may be of paramount importance, but it’s not all about the figure. How long a property is on the market and how much attention it receives contributes to how much buyers think it is worth. “Look at the websites of all the agents in the area and watch how long it takes for similar properties in the same price range to go under offer,” says Karelia Scott- Daniels, managing director of Manse & Garret, a property search agency. Edward Heaton adds: “It takes a couple of months if the property is priced optimistically but close to the real value. Properties that go under offer in a few days or a few weeks could probably have been marketed for a little more, particularly if they sell for their asking price or close to. Too long before an offer and the damage has been done. The buying public see the house as compromised. The eventual selling price is often significantly less than if the right price had been asked in the first place.”
5. “Getting the right asking price requires focus, directional hearing and real guts,” says Ed Mead, a director at the Douglas & Gordon estate agency in London. “You’ll achieve the best results by ignoring what you want to hear and focusing on what you need. Incentivise the agent with a middle-of-the-range asking price and a fee designed to get more than the guide price. Estate agents are sales-driven, so offering a fee structure where they receive a hefty additional percentage for everything they get above a guide price has to be win-win for both agent and seller.”
6. As Ed Mead identifies, it is common for prime properties to be marketed with a “guide price” or at “offers around”. Be wary of doing this if your home is more modest, advises Miles Shipside, a director at Rightmove, as you might deter potential buyers from making an offer at all. “Post-credit-crunch, buyers are extra-choosy about value,” he says. “They can be put off by ‘guide price’ and ‘offers around’ as they fear that the sale might end up going to sealed bids, and they will end up paying more than anyone else.”
7. “Under pricing has historically been a good way of generating interest with a view to pushing the price higher through competing bids,” says Edward Heaton. “This often still works, but such are the vagaries of the market this is in no way guaranteed. It becomes a gamble for the seller. If you quote approximately 10 per cent below the average value but only get one interested party, what do you do? Hold out in the hope of someone else with a higher offer? In this market, a bird in the hand is worth two in the bush.”
8. Your estate agent will advise you on the price you should put your property on for, but the price at which you are prepared to sell is a different matter. “Decide in advance what is the lowest price you are prepared to take and keep this to yourself,” says Samantha Ashdown of the selling advice service Home Truths. “Take the emotion out of it. It is important that you are in control of the process if the agent starts suggesting you lower the asking price in order to achieve a sale. Having a bottom line is crucial.”
9. Watch out for the crafty tricks agents pull and ask questions if your instincts tell your something isn’t right. “It’s vital your property is priced competitively otherwise it will become a ‘lever’ flat for the selling agents,” says Caspar Harvard-Walls, partner at the Black Brick property search agency. “A lever flat is where your property is shown to prove to an incoming buyer that another flat is actually really good value. This is to be avoided at all costs.”
And finally, check all your paperwork is in place. If a good offer at or around the asking price comes in, you must be able to move quickly before your potential buyer has chance to change their mind. “It is so important,” says Rupert Sweeting, a partner at the Knight Frank estate agency. “Make sure your lawyer has the contract ready and that all the documentation is in order, such as the local authority searches and details of disputes with neighbours.”