One question we often get asked is “If My Property Is Priced Too High, Why Are People Not Offering Less?” In this blog we will try to share our thoughts on this and why home owners should always ask” Is my house priced correctly?”
The market is booming, I’m going to try to get a bit extra for my home
In the current market, at first it would seem like a good idea to try for a higher price on the sale of your property. Interested buyers can offer what they are prepared to pay for your home and this could get you a few extra pounds in your pocket.
With every other news article being about how house prices have increased this year and how people are offering over asking prices anyway, perhaps there has never been a better time to try your luck and list your home for a higher price. You’ve nothing to lose right?
Unfortunately listing your home for a higher value could end up costing you money in the long run. To get offers (even low offers) you need to have viewings, and to get viewings we need to understand what will get people through the door and to view your home in the first instance.
Buying a home is an emotional thing, the majority of people buy with their heart; but it’s their head that makes the shortlist of properties they are going to view. They have criteria such as an area, number of bedrooms and most importantly that it’s within budget.
Let’s assume that your home is worth £295,000 to £300,000. However, as this price range is very competitive with houses often receiving multiple offers going £5K, £10K – or sometimes in excess of £20K over asking price – you decide to list your home for £325,000 in the hope you will attract an offer over £300,000.
Yet, despite being in a competitive market, you find you are getting few viewings and no offers. Why?
How people select homes they wish to view
People who will pay £300,000 for a house usually start off with a comfortable budget of say £280,000 to £290,000 and will stretch to find the extra for the right property. They search for all properties from £275,000 to £300,000. If your home were listed at market value it would shine compared to those properties listed for £275,000. This would mean it’s very likely to get viewings, and hopefully, in turn, offers. It just takes two different buyers to fall in love with your home who are prepared to offer to start to see the offers increase to asking price, and in some cases beyond.
If you move into the mind-set of a buyer searching £300,000 to £325,000. Compared to property genuinely worth £325,000 yours might not look so good in relation. Maybe it is smaller; not in such a good location; hasn’t got the finish etc. The buyer has skimmed past yours and fallen in love with the bigger, better, shinier house. They probably had a comfortable budget of £315,000, they could have bought your for less, but they didn’t even consider it.
You could ‘test the market’ at a higher figure but understand that no feedback is feedback in itself. If you are not getting viewings, buyers are saying they think it’s overpriced. Or, if you are getting viewings but no offers, this is also an indication that the price is wrong.
Buyers don’t like to say something is overpriced, they will all say the price is fine, but for them, these are the reasons they won’t be making an offer… You get comments such as:
“The third bedroom is too small.”
“The garden is the wrong aspect.”
“Needs too much work.”
and so on.
If you find you are getting these kinds of comments in your feedback, ask yourself what this really means. The buyers are basically saying, my ideal home at the top of my budget would have a bigger third bedroom, a southerly aspect garden, a better finish. They won’t offer lower because their expectations were to fall in love with the perfect home that is right at the top of their budget and you have lost them.
Yet, if you showed the same buyer your home priced in a lower price bracket their expectations are more realistic. It’s where the compromises come in. “The third bedroom is a little small, but the garden office makes up for that.” “We don’t really like sitting in the sun all day, it’s nice the garden has some shade.” “It’s not an immaculate finish, we can put our stamp on it and we will get a bargain.” The same house (your house) can look totally different to the same buyer(s).
Now the buyers have fallen for your home and they will offer to get it. If you have several buyers wanting it, the offers will increase. Don’t put some of these buyers off by pricing it over their search criteria.
This applies to any house regardless of its value, and to any buyer regardless of their situation.
I think my house is overpriced, what should I do?
React quickly. In the current market place, it should be no more than two weeks before you adjust your price to save your property appearing stale. No one will pay full price for a property that’s been hanging around for too long.
Ask yourself Is my house priced correctly? Then ask your agent for advice with the new price. Have the lead marketing photo changed. Find out where else it is being marketed other than the portals, for example social media pages and local groups. Check that your agent is contacting interested potential buyers from their own database.
Beware of estate agents that value your home higher than the others. Remember the question, Is my house priced correctly? High valuations are often used to win listings. If you choose to use an agent that gives you a high valuation, ask for comparable sold properties in the local area that have sold for that figure. Ensure they are comparable to your property in terms of size, condition and features.
Only agree to list your home at their higher valuation provided you have a short contract term. If they are truly confident that they can achieve this price, most agents will have no issue of agreeing to a four week contract or less. A good agent will get you the maximum the market will pay. Not leave you stranded above that figure where you have no option but to watch the price tumble. Probably to lower than market value as it has lost its ‘new instruction’ shine.
Is my house priced correctly?
Harrisons pride themselves on getting the best price in the shortest time possible. We have helped thousands of families move home in the Sittingbourne area over the past 35 years. If you are concerned your listing price may be putting off putting an offer on your home or you would like to know more about how we can help to get you moving contact us today 01795 474848.