Our last article considered some of the dangers associated with pricing your home in relation to other properties available for sale (ie those remaining unsold). This time we’ll consider pricing in relation to properties which have actually sold.
When considering what asking price to quote for your home, common sense dictates that the price of other homes which have sold locally should be a good indicator of the price you should be quoting. However, your research could well prompt you to price your property at a level which could prove difficult to sell. In this weaker market it is a sure bet that the price achieved for a property is highly unlikely to be achieved again, and may well represent a snapshot of the market several months ago.
Additionally whilst a property might have been advertised at a particular figure, it could well have actually sold substantially below this.
Irrespective of national trends, the property market is very sensitive to imbalances in supply and demand even on a street by street basis. When there are many qualified buyers all seeking a rarely-available house in a popular street the price goes up. If fate dictates that the following week five such houses become available in the same street, the price will inevitably fall.
Likewise there can be situations where a property is sold at a record price to an individual who particularly wanted a specific property for personal reasons. Conversely a situation could arise where a desperate seller, who might otherwise suffer repossession, agrees a sale at a very low figure for a quick sale.
Only the estate agent involved in any of these transactions knows how the individual circumstances of sale can affect value. So a word of caution – leave the science of valuation to an experienced local estate agent who is highly active in the market and has a good track record of achieving swift sales at or close to his/her suggested asking price.
Friday, 30 October 2009
The Value of FOR SALE
When considering the value of a property prior to putting it on the market, many vendors understandably look at the asking price of other properties currently on the market locally, and draw pricing conclusions based on this research.
Whilst this is not an unreasonable way of determining value, there are some traps for which to look out.
Firstly, an important observation is that if a property is on the market, it is by definition “unsold”. An unsold property is invariably one which is overpriced. If it had been priced correctly then it would have sold, but in the event the market has rejected it and it will probably only sell if the price is reduced. So if you have a similar property and you price it at about the same level as the unsold property, then the chances are that yours will remain unsold as well.
We know that purchasers buy by comparison. So your property has to compare favourably when seen alongside others on the market. If your property is similar to another on the market nearby, then yours only becomes readily saleable when it is priced favourably and offers better value for money.
Additionally, if you feel that your property is slightly better than a neighbouring property for sale (as you are bound to as you chose the décor and it has your own possessions in it) then surely it makes sense to quote a similar price, rather than attempting to offset the extra features with a higher price.
Ultimately, correct pricing is all about seeing the world through the eyes of the buyer and making responsible and effective pricing decisions which always point to offering better value than that offered by competing properties available locally.
Our next article will consider the merits of pricing in relation to properties that have already sold.
Whilst this is not an unreasonable way of determining value, there are some traps for which to look out.
Firstly, an important observation is that if a property is on the market, it is by definition “unsold”. An unsold property is invariably one which is overpriced. If it had been priced correctly then it would have sold, but in the event the market has rejected it and it will probably only sell if the price is reduced. So if you have a similar property and you price it at about the same level as the unsold property, then the chances are that yours will remain unsold as well.
We know that purchasers buy by comparison. So your property has to compare favourably when seen alongside others on the market. If your property is similar to another on the market nearby, then yours only becomes readily saleable when it is priced favourably and offers better value for money.
Additionally, if you feel that your property is slightly better than a neighbouring property for sale (as you are bound to as you chose the décor and it has your own possessions in it) then surely it makes sense to quote a similar price, rather than attempting to offset the extra features with a higher price.
Ultimately, correct pricing is all about seeing the world through the eyes of the buyer and making responsible and effective pricing decisions which always point to offering better value than that offered by competing properties available locally.
Our next article will consider the merits of pricing in relation to properties that have already sold.
Sole Mates Forever?
Most estate agents make similar claims about their ability to secure the highest possible price, in the shortest possible time, with the least possible inconvenience.
These things are easy to say, although in reality many agents do not always find them easy to deliver. Indeed, such claims set a level of expectation that can sometimes be followed by disappointment.
One thing to look out for when selecting an agent is their period of sole agency. There is no doubt that a sole agency is far preferable to asking two agents to market your property, particularly in terms of accountability. But some agents insist on a sole agency tie-in period of 8, 12, 16 or even 26-weeks! Our question is….why?
In our opinion, a long period of sole agency suggests a lack of confidence on the agent’s part, and it is a way of preventing the seller from sacking them if they fail to deliver! What sort of accountability is that?! It means that the agent can say whatever the seller wants to hear in order to secure the property on their books, and then wait for the property to sell itself. Indeed, some agents take on properties under a long-term sole agency agreement, only to recommend a price reduction shortly after the initial marketing period. Sole agency periods protect agents not sellers!
We are breaking the mould in this area, as we believe property sellers deserve better. We feel that if, at any time, you no longer enjoy working with us, you should have the right to fire us! We simply ask for twenty eight days notice. We find that our clients really appreciate this transparent approach. It certainly keeps us on our toes, and ensures you get the commitment we promise at the outset.
These things are easy to say, although in reality many agents do not always find them easy to deliver. Indeed, such claims set a level of expectation that can sometimes be followed by disappointment.
One thing to look out for when selecting an agent is their period of sole agency. There is no doubt that a sole agency is far preferable to asking two agents to market your property, particularly in terms of accountability. But some agents insist on a sole agency tie-in period of 8, 12, 16 or even 26-weeks! Our question is….why?
In our opinion, a long period of sole agency suggests a lack of confidence on the agent’s part, and it is a way of preventing the seller from sacking them if they fail to deliver! What sort of accountability is that?! It means that the agent can say whatever the seller wants to hear in order to secure the property on their books, and then wait for the property to sell itself. Indeed, some agents take on properties under a long-term sole agency agreement, only to recommend a price reduction shortly after the initial marketing period. Sole agency periods protect agents not sellers!
We are breaking the mould in this area, as we believe property sellers deserve better. We feel that if, at any time, you no longer enjoy working with us, you should have the right to fire us! We simply ask for twenty eight days notice. We find that our clients really appreciate this transparent approach. It certainly keeps us on our toes, and ensures you get the commitment we promise at the outset.
Tuesday, 6 October 2009
More than Pictures
As you look through the pages of most local property newspapers and magazines, all you generally see are pictures of properties. As you turn from page to page the only discernable difference between estate agents is their corporate colour scheme, which does not tell you a great deal about who they are, what they stand for, or what it would be like to work with them.
Additionally, most readers are not actually thinking of moving, although the majority of homeowners naturally have an ongoing interest in the local property market, especially during these uncertain times.
So, from October 2009, we will be publishing weekly articles on our website that look at property-related issues. Not just about flats and houses that are currently available for sale, although these will always feature prominently on our site, but opinion, commentary and advice on the wider issues of property ownership.
After all, there is so much more to property than selling; yet few estate agents offer anything remotely associated with property lifestyle. This is surprising considering the overwhelming interest in property-related subjects on TV. Where many agents appear only interested in the sale, we see our role as helping with the move as a whole, including a contribution towards helping people enjoy their home.
So whilst many of our articles will offer advice on how to maximise your prospects of buying or selling quickly and with minimal stress, we will also consider other aspects of property, including topics such as interior design, gardens, security, planning, etc.
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