What to do (and what not to do) with your asking price in a slow market

It’s fair to say the property market has been slow over the past couple of years.

Chelmsford, actually, has been performing better than many other areas and although transactions are still down 6% on the previous year, that’s a whole 2% less than the national picture.

So, if you have had your property on the market, or you still do, you may have found getting that all-important buyer over the threshold slightly more difficult in 2019 than, say, 2015 or 2016.

So, what’s the answer to secure that sale?

For many, it’s a reduction in asking price.

But this isn’t always the best course of action to stimulate a buyer’s interest. In fact, it can sometimes have the opposite effect.

Let’s look at things you can do (and things you shouldn’t) when it comes to your asking price…

Speak to your agent

Your estate agent would have valued your property before it went on the open market.

So, if it hasn’t sold, the first thing you should do is ask your agent what has changed in the market?

Did they misjudge the market and over-value your property or has there been a decline in demand for properties like yours?

Knowing what is going on in the wider property market will help you make a sound decision on whether to reduce your asking price.

Remember: Buyers buy on emotion more than price

If your property is not selling, is it definitely down to the price?

While you may feel your property is in tip-top condition to sell, buyers may be seeing things differently.

And if they are, reducing your asking price may not have any effect at all in your quest to get buyers through your door.

This is again where your agent should be proactive.

How does your property compare to similar properties in the area? What do they have that you don’t (if anything)?

Are the marketing photos of your home really doing enough to sell its best features?

The simple fact is this: If a buyer falls in love with your home, they will be prepared to pay for it.

So, rather than reduce your asking price, consider if there’s a reason buyers aren’t getting that emotional pang when they view your property – either in person or online.

Asking price reduction = alarm bells

What’s the first thing you ask when you see something, like a car, has been dramatically reduced in price?

“There must be something wrong with it…?”

While buyers buy predominantly on emotion, they’re also a sceptical bunch. And who wouldn’t be given the amount of money a property costs.

So, when they see a property has been on the market for some time and has had its price reduced, they’ll wonder why.

Where does it end?

If you do decide to lower your asking price and the move still fails to produce any buyers, the natural assumption to make is that you haven’t dropped it enough.

And once that assumption is made, it’s a slippery slope.

Multiple reductions in asking price will, as we mentioned above, see buyers naturally assume that something is wrong with your property.

It also makes it difficult for you to take your home off the market and then re-market it at a later date for your original asking prices as buyers who are yet to find a home will almost certainly remember it and its lower asking price.

How much you should drop your asking price

This is the big question.

If you’re set on dropping your asking price to stimulate interest in your property, how much you drop it by really does come down to a number of factors.

Firstly, you should consider your property’s appearance on the main internet search portals, like Rightmove.

How often have you purchased a product in a shop that costs £1.99 or £2.95? Quite often, we’d guess.

This is done for psychological reasons as, according to research, buyers look for a lower first number – so, £1.99 seems much cheaper than £2.00, even though it isn’t.

It can be tempting to employ this strategy when selling your home.

For instance, if your property has been valued at £400,000, selling it for £399,950 will lure a buyer into thinking your home is better value than it actually is.

However, marketing your property at £399,950 means it will appear in a Rightmove search for properties with a maximum value of £400,000.

Pricing your property at £400,000 exactly, however, means it will also appear in searches that have a minimum price of that amount as well as a maximum – and that means your property will be seen by considerably more people.

If you do feel an asking price reduction is your only option, consider the portal searches and try to come up with a new asking price that means your home will still be seen by as many potential buyers as possible.

Consider lower offers

If you’ve decided to lower your asking price, you should also factor in what you could expect to lose through a lower offer from a buyer.

Research from Zoopla last month suggested buyers are accepting almost £10,000 below the asking prices for their properties.

So, if you’ve already reduced your asking price by that amount, you could potentially stand to lose £20,000 should you feel accepting a lower offer is your only option.

If your Chelmsford property is on the market and it’s not selling, have a chat with one of the team at Martin & Co Chelmsford, who will be able to offer an honest appraisal of your home.

Leave a Reply

Your email address will not be published. Required fields are marked *