1. Over pricing
It is commonplace to obtain 2-3 valuations when marketing your home. It is also a wise thing to do as it will ultimately give you an average figure. However, some less scrupulous Agents may try to flatter you and win the business by quoting a higher figure. This lures you onto the market and then you will inevitably be pushed by the Agent to reduce the price when the marketing becomes stagnant and there are no viewings.
Properties which are reduced once, twice or even several times in quick succession become known to the buying public and your house will become ‘that house’. Buyers will also start to make up reasons why your house is not selling such as “it must have survey issues” or “the neighbours must be a nightmare”. Ultimately the house will end up selling for less than it would have done if it had just been priced correctly from the start.
Think of it this way. Your house is worth around £700,000 so an Agent tells you to market it for £720,000 so you can negotiate down to the level you think it is worth. Firstly the next search bracket up on Rightmove is £800,000 so absolutely nobody is going to see it if they search up to £700,000 (don’t forget the majority of people now search for their next home sat on their sofa using their smart phone…..). So, by adopting this approach you have already limited your pool of buyers. Also consider that there is a huge spike in interest when a home first hits the market and you only get ONE chance to capture those people. Secondly the marketing is now going to go stagnant and you will have to end up making a price reduction. There will be no point reducing to any figure above £700,000 or it will make zero difference due to how the online search pricing brackets work.
You’ll then be left with a property which has now been on the market for a few weeks or maybe months, you’ve missed the initial swath of buyers and your home has a ‘Reduced’ sign next to it. This is not good news as your eventual buyer will use this to negotiate a lower price and you’ll most likely end up with below £700,000 as you’ll then be more minded to accept a lower offer as the house has been on the market for some time and you want to get moving.
If you are working with an agent who has excellent marketing and negotiation skills, it is significantly better to market for either the price you both agree it is worth (£700,000) or better still, depending on the desirability of the property, a lower Offers Over price to drive interest and urgency between buyers. For the most desirable homes in the most desirable areas, this will usually result in a higher eventual selling price (over £700,000) as buyers will not want to lose out. On top of this, buyers will have no genuine reason to try and negotiate down as one of the key reasons buyers use to negotiate is ‘time on market’. Plus, if there are 2, 3, 4 or more interested parties, buyers will know they have to pay a good price in order to secure the home.
According to Which?, sellers lose £4,300,000,000 a year to overvaluing and homes with a 5% price cut taking two months longer to sell.
2. Making small reductions
I see it time and time again, Agents making multiple small reductions, sometimes within a few weeks of a property going onto the market. This is so incredibly damaging for the eventual selling price and makes it abundantly clear that the home has been overpriced from day one. Don’t forget that if you reduce by 2% or more, your home will not only show as Reduced online, it will also get sent out in the property alerts by Rightmove. So, each time you do this, all buyers registered for these alerts will keep getting emails reminding them that your home has been Reduced (again) – very damaging for the eventual price you will be able to achieve.
If the Agent you’re using has overpriced your home, it is much wiser to make one large reduction further down the line and as an absolute last resort. And ideally (depending where your price sits) onto a new Rightmove search bracket so your property will be seen by new buyers. Example: your home is overpriced by your agent at £670,000 (next price bracket down is £650,000) so DO NOT make a small reduction to £660,000. Think about other things you can do first such as changing the main marketing image and description to freshen things up or ask your agent to run a Facebook/Instagram/Google advertising campaign or run a match to new buyers on their database. Then only make the reduction if you absolutely have to and make it to £650,000 to catch all those buyers who are only searching up to £650,000 and cannot currently see it online
3. Not ‘zero’ pricing
Lets not forget, this is not the 1990s and buyers are not searching for your home in the window displays of Estate Agents! They are searching on their smart phone or tablet and you absolutely have to consider this when pricing your home. If your home is below £500,000 it is very easy to sit the price on a search bracket (e.g. in the £400,000s these brackets are £400,000 / £425,000 / £450,000 / £475,000 / £500,000) so PLEASE ensure your agent prices on one of these instead of £469,995 or £499,999! By sitting your home on one of these brackets you will be seen by buyers searching up to this figure and also up from this figure. To the buyers searching up from this figure your home is at the bottom end of their affordability so it should be more straightforward for your Agent to negotiate a higher price.
Even as the prices climb higher, you should try and sit your home on one of these brackets. I see so many examples where Agents price at £699,995 or £910,000 – it would be far more beneficial for you to price at £700,000 or Offers Over £900,000. It will result in more clicks online, which results in more viewings, which usually results in a higher final selling price.
Coupled with all of the above is that the main property websites such as Rightmove, Zoopla etc. show properties in descending price order so for the examples above of £500,000 instead of £499,999 and £700,000 instead of £699,995 etc., you will be higher up the list – a bit like being at the top of page one of Google!
4. Not having a board
It is a question that I get asked by clients on a regular basis “do I need a for sale board”. My answer is usually a resounding “Yes!”. The reasons? Well there are three main ones:
Lets as many people know as possible – when marketing your home, it is about shouting from the rooftops about the fact it is for sale in order to generate as much interest as possible, which will result in more viewings and a higher price.
Passive buyers – passive buyers are those who are not registered with Rightmove and Zoopla to get alerts and who are not regularly searching so will not see your home advertised online. However when ‘that home’ comes onto the market, the one they’ve always dreamed of owning, they will either act quickly and get theirs sold in order to buy yours, of they may have cash reserves / other means of finance and are able to buy it without selling their current home. I have sold many properties over the years to passive buyers and especially in the more affluent areas of mid-Cheshire, people do either have the cash or are able to secure quick finance to buy ‘that house’.
Drive bys – When a home comes onto the market, many buyers will ‘do a drive by’ before arranging a viewing. Especially if you home is down a lane or not easily visible, but really wherever it is, make it as easy as possible for people to find it! You want a super smooth ride for buyers!
5. Not staging
When marketing your home in the US or Australia, it is commonplace for Vendors to move out of their home before it is marketed! The ‘Realtor’ then brings in a team of decorators and professional house stagers to ensure the house is looking as incredible as possible! This is all undertaken for one reason only – to achieve the absolute best price possible. It is true that by investing time and sometimes money in your home before marketing, it will return you thousands, in many cases tens of thousands in your pocket on the eventual sale price.
Marketing a home is about creating an emotional attachment between buyer and property (don’t forget we make purchasing decisions using emotion, not logic) and the more amazing, homely, comforting and enticing your home looks, the higher the price a buyer will be prepared to pay.
When we market a home, we sometimes suggest decorating changes to a client and always provide thorough advice on how to stage each room. This involves removing certain items and rearranging others to get those all-important perfect photos. Before you choose your Estate Agent, compare their photos online to other Agents – which do you think look the best and most enticing?
6. Going with a cheap fee agent
Staging, creating superb professional marketing, speaking with buyers, carrying out ALL viewings and not asking the Vendors to do their own, following up each viewing thoroughly to assess the feedback if a sale doesn’t happen straight away, preparing a negotiation plan to ensure the best result – all of these important elements take time. Agents who charge low fees and who therefore need many more property sales going through in order to make a profit, simply cannot have the time to spend executing each element correctly. This will result in a lower selling price for you as they will prioritize getting as many deals through as possible. Although they will have more sales, are you confident they devote enough time to the sale of your home?
Added to this, these cheap fee agents will simply not have enough money (or time) to create professional photos and videos, a bespoke Facebook advertising campaign (sometimes more than one) if needed, specialist for sale boards to make your house stand out and you will not end up with the best possible price for your largest tax free asset.
7. Going with a pay up front agent
This one is quite simple. If you were paid up front for selling something (anything in fact), would you have a vested interest in whether it sold or not and would you really care about maximizing the price for the Vendor if you have been paid weeks or months beforehand?
8. Marketing just before Christmas
In the last 3 or 4 weeks before the big day, what is your attention focused on? I’d bet it’s not on moving house? I’d bet your attention is focused on your children or grandchildren’s Christmas play / Christmas crafting or baking / buying last minute presents for your friends and family or socialising with work colleagues and friends. Due to this, the last 3 or 4 weeks before Christmas are the worst time possible to launch your home to the market. Chances are you will get significantly less enquiries.
Now, most people would agree with this so some decide to “wait until January” before putting their house up for sale. However, did you know that Boxing Day is the busiest day for online property searches? Psychologically Christmas is over and people are looking to the New Year. So instead of waiting until January, get your Agent to prepare the photos and video before your decorations go up and then launch on Boxing Day. This is a tried and tested method we have used for years and it works! You can then arrange a day early January to block in all the viewings.
9. Being fixated on the price you want
There is a saying in our profession which goes “if you have an offer, use it, don’t lose it!” If you have an offer on your property that is anywhere near the level that you and your agent feel it is worth, you should go out into the market place and submit an offer on your next home, based on the offer you have received on yours.
Example, you and your Agent feel your home is worth £780,000 and you have an offer for £760,000. Although you may feel this is a £20,000 loss, it isn’t if you build that £20,000 into the offer on your next home. Overall you haven’t lost out at all and it could be the route to actually selling and moving.
So, try not to be too fixated on the price you want, focus on the ultimate goal and don’t forget “Use it, don’t lose it!”
Thanks for reading.
Copyright 2021 Storeys