The Price is Right! Come on down!

So sayeth those jacks of all (Light Entertainment) trades and those masters of none, Lord Leslie of Crowther and Sir Bruce Forsythe…those Titans of a Televisual Age gone by, may God rest their ever-smiling souls…and if you’ve wanted to sell a property in Wandsworth since Spring 2014, you have certainly had to price it right.

You see, since April 2014 right up until Dec 2019 the local property market has either been flat or falling. That is point 1.

Point 2 is that sold prices have been widely accessible to the public for a long time now.

Therefore, buyers know prices and see no reason to overpay, and if you, or your agent, price a property too high, you won’t sell it. Well, you will, but you will sell it for less than you should, and it will take you much longer than it should. I adhere to the dictum; if you price too high you sell too low.

If it comes on for too much, they’ll think that you’re just testing the market, or not serious, or have unreasonable expectations, or that you’re just a doofus.

You will be sending out all manner of negative vibes. So they won’t view it, let alone offer on it, they won’t want to do business with you, a doofus. And in a market such as this, with nicely balanced levels of supply and demand, they will simply go off and buy something else (remember this is not rural heterogeneous rural Gloucestershire property, this is homogenous Victorian terraced London property, largely)

And so then you have to drop the price, or switch agents, or both. Then they think “right, it’s been on for 3 months with two agents, they must be desperate now/there’s probably something wrong with it, I’ll lowball them an offer…”

(Stat attack – Consumer organisation Which? recently undertook a retrospective study of 370,000 house sales in the UK. They compared asking prices to eventual sales prices. Their report concluded that over-valuing by just 5%, resulted in two undesirable consequences:

Firstly; a delay in the sale of over two months in comparison to the market norm.

Secondly; a 7.7% reduction in the eventual sale price in comparison to correctly priced properties marketed at the same time (on an average Rampton Baseley house sale, that equates to £123,200 down the pan of over-pricing).

The most important two things to get right when bringing a property to market are the agent that you use, and the price that you set (both must be sensible)….and the first generally begets the second.

Currently, for all 52 properties we have under offer, the average time on the market until a sale is agreed is 19 days, during which 31 viewings take place, and subsequent to which the sale is agreed at an average 100.27% of asking price.

To achieve this as an agent, you need quality stock, quality buyers, quality staff and to set quality asking prices.

You need to price a property at the sweet spot, not too much to put people off, not too little to look cheap, but just right to get everyone in the market through the door. To send out the right signals, “I am serious about selling, I know that I have a good property, and I want to move. Oh, and I am not a doofus, and nor is my agent…”

There are certain agents that have made a fortune from pricing high to get instruction – do please bear in mind (they certainly do) that research shows that 75% of vendors go with the highest asking price quoted by valuing agents. This is all well and good in a rising market, or a seller’s market, as the market will match the price. But in a flat of falling market, you will be left high and dry. You then get sucked into the Death Vortex (described above) of dropping the price, and/or switching agents and eventually selling for too little too late.

A little digression here; I have been on valuations, quoted our stats, and a vendor has said to me “ yes that’s all very well, but Jonny Spangle from Gel and Sharpsuits Agents says you only sell so quickly, and at such a high percentage of asking price, cos you price too low…”

My standard reply is “If that’s the case wouldn’t our clients be terribly disappointed in our service? Wouldn’t our reputation wither and perish on the vine? Wouldn’t we go out of business PDQ? And how come if that were the case, we are the most successful house selling agent (according to Rightmove) in the areas in which we operate?” (sorry my professional ego made me write that…)

So, if you’re not selling, or your agent is asking you to drop the price, one of three things has happened;

you’ve chosen the wrong agent,

the market has changed,

or The Price is Not Right.