Hyacinth Bucket is a fictional character in an old British comedy “Keeping up Appearances”, famous for her obsession for wishing to appear more affluent and influential than reality.
Hyacinth would often hold “high teas”, going to extreme measures to hold amazingly prestigious events in her home. After inviting a cavalcade of the most important people in town, no one would turn up, except her neighbour, who only came under duress.
Hyacinth can teach us some lessons about pricing a property for sale.
If your property is in tip top condition, being presented to the market with immaculate photography, beautifully written descriptions of all the features, and great marketing and advertising, and you’re still not attracting enquiry, it may be time to consider reducing your house price.
Hyacinth’s long-suffering husband, Richard, would sometimes suggest to his wife that she should adjust her outlook on “high teas” to something a little more “accessible”. These conversations never ended well!
Conversations between a seller and a real estate agent who suggests lowering the sales price can be equally fraught with emotion.
After all, as an owner, if you have spent years paying for a house, expending blood, sweat, tears and money into renovations, the house is no longer a house but a home. Throw in all those memories of family, friends, pets and good times, suggesting to an owner that a house may be overpriced is an emotional minefield!
So to put it bluntly Hyacinth, this is what you need to consider when discussing or considering this difficult decision:
1. Attempt to understand the viewpoint of the buyer
Buyers are savvy, with unprecedented purchasing tools at their fingertips. Via the internet, buyers can quickly evaluate a market, compare properties and gather other critical information that several years ago was only available to real estate professionals.
To make the best decisions to sell a property, sellers need to overcome their emotional attachment and attempt to understand buyers – at least as well as buyers understand sellers.
2. Don’t get into the blame game
The first response of many property owners presented with the option of lowering their price to sell, is to blame the real estate agent, but remember that a real estate agent also has an interest in selling your house.
The best result will come if you determine to work with your agent, and move forward based on the best information on hand.
3. Understand the market
Understanding the market now is the key to pricing strategy, and that’s where working in with your real estate agent can enhance your chance of striking the right balance. Your agent can give you invaluable information on which to base a rational decision. This will include current information on the selling price of comparative houses in your area (as opposed to the listed price), and the average number of days houses in your area are taking to sell. Is the market sluggish or getting stronger?
If your price is above 60% of the comparative houses in the area, and/or taken longer than the average time for properties in your area to sell, then reducing your price should be seriously considered.
4. Take a look at adding value rather than reducing your house price
One more option to consider before reducing your price is to the possibility of increasing the value of the property. There may be renovations or improvements that can be done which will increase buyer interest. If these renovations can be achieved quickly, and at a price less than the proposed price reduction, then they should be considered.
5. Whatever you do, do it quickly and do it once
The statistics are compelling. Fresh listings receive high levels of attention, but after about two/three weeks, buyers start to see a property as stale and lose interest. Over-priced properties take longer to sell and do not attract optimum number of potential buyers. The longer properties sit on the market the lower price they achieve.
So to increase your chances of a quick sale, at a higher price than might otherwise be achieved, setting a price to meet the market should be done yesterday!
6. Don’t worry about setting the price too low
Think eBay. If you post a product that may be worth $1000, say a new iPad, and set the price at 10 cents, you will generate enormous interest and lots of bids. The sales price will “meet the market”. The same applies to pricing a home. A lower price will attract more buyers, and create competition which will drive up the price. It is always better to be attracting too many buyers than not enough.
So don’t be caught holding a “high tea”, sitting at an empty table eating cake!
If you are considering selling a property soon, take the time to do your own research, or talk with a trusted real estate agent, before going to market so that you start with a price that will take advantage of those first two-three weeks of intense interest.
If you have a house currently on the market, and enquiries have reduced to a trickle, determine to seek advice and make a decision quickly.