Sellers are being advised to be realistic with their asking price if they want to attract buyers amid a slowing housing market.
The latest research by GetAgent.co.uk suggests that more needs to be done to stop the practice of over pricing homes to win instructions,
According to the estate agent comparison site, just 36% of all homes that have seen a price reduction in the current market have been listed as sold subject to contract (SSTC).
GetAgent analysed current market stock levels looking at both the total proportion of homes for sale that have seen a price reduction in the current market, as well as the proportion of those price reduced homes that have actually attracted a buyer.
The figures show that across England, an estimated 34% of total for sale stock, excluding homes already marked as sold subject to contract, have seen an asking price reduction since being listed for sale.
This level of asking price reduced for sale stock remains fairly consistent across the market, with the East Midlands home to the highest level at 37% while the North West is home to the lowest level at 31%.
But while an asking price reduction may be a common tactic in increasing buyer interest, the figures from GetAgent show that it doesn’t necessarily secure a sale.
Of all the homes listed for sale to have seen an asking price reduction across the market in England, just 36% had also found a buyer and been marked as sold subject to contract.
The South West was home to a slightly higher percentage, with 40% of all homes to have reduced in price finding a buyer, while in London, this proportion dropped to just 30%.
The co-founder and CEO of GetAgent.co.uk, Colby Short, commented: “It has always been clear from data that pricing a property inappropriately makes a successful sale far, far less likely. For a buyer, seeing a price come down makes the property seem less appealing and often leads to a lower selling price than if the property had been priced appropriately from the start. For a seller, these unrealistic expectations often mean disappointment with a result that may still represent a job very well done by the estate agent.
“Unfortunately for agents and for the vendors, vendors mainly select agents based on the valuation provided or the fee charged which often leads to overvaluing of properties and ends up helping nobody. Using performance data to prove an agent’s superior quality allows the agent to build trust from the outset, price the property accordingly and charge a fair fee for the job done.”
2+2 = 76? When a market adjusts from what it has been doing, to what it’s doing now there is an inevitable lag while first agents realise what was working doesn’t work now and then eventually after working through a series of agents prepared to indulge what they think their home is worth, vendors catch on too.
After double MIRAS was taken away in 1988, it took until Autumn 89 for the consequences of the artificial stimulation of the market for 3 months to become apparent and for prices to revert to where they would have been if it were not for the changed market. Its a pattern that repeated in 2008/09 and then became predictable with the stamp duty holidays.
There is a natural transaction volume to the market, fiddle with it and there is a period of reduced transaction volumes; properties take longer to shift because of a lack of confidence. In most cases it is not the price of a property that’s wrong it is just a case of waiting for the buyer to be confident the price is right for them.
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I just wish the government would leave the market alone. It doesn’t need stimulating just as it didn’t after Covid. As you say the SDLT holiday just caused another peak and trough market. Any free market will naturally find the correct level in its current market conditions. Left alone it will rise naturally over time with subtle waves and dips rather than peaks and troughs. In general the public don’t like to take the mid-value of the range and as you say will pick the highest valuation. Could be the agent just got it wrong. I’ve been know to get valuations wrong once or twice over the last 40 years!
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Often its the vendor who gets it wrong and its a fool agent who goes along with it.
When we were doing the deep dive analysis for #portaljuggling, price juggling was one of the things we identified and status juggling was another.
This is a Charlie Lamdin level commentary that doesn’t give most agents credit for the instructions they are winning, instead it lumps all agents into the same pot of incompetence and spivery
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Ignore CL
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Only thing that needs banning is getAgent
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I wish I could like this twice.
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100%
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I was asked on a telephone interview by the No.2 in a well known 50 odd branch agency 3 years ago if I was OK with over valuing in order to get the instruction. I said it wasn’t my style as I preferred to be honest about the value and win the instruction based on my knowledge/experiance………………………………..never heard back. In the long run it wasn’t an issue as I would not have taken a “chance” of them anyway.
As for GetAgent……………………..another parasite on the industry
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LOL
This has been happening since adam was a boy and always will happen
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This is about client psychology. The fact is, as we all know, whilst there are agents out there who do overvalue, there are clients who ignore accurate, evidenced valuations to opt for the highest val with nothing supporting it. Sometimes they will ignore multiple similar valuations- for the high-flying outlier. Only to bemoan ‘dodgy agents’ when the property doesn’t sell and faces multiple price reductions.
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I have a client who insists on X value for his property as I have the same type of flat on the market for X, He won’t entertain that the other flats aren’t selling and i am constantly asking the other vendor to reduce his asking price. I don’t get why these investors get into a market when they do not understand the economics of said market. If i don’t take on this property some other agent in the area will do so and eventually sell it. I am hoping the client will understand me after a few weeks of marketing and reduce his price so it will sell. I do not like to overvalue and therefore do not win many instructions where I am up against those who do but generally when I get a property from a client who listens I sell it.
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