As the property market enters the autumn period of activity Nick Churton of Mayfair Office of offers some frank advice for sellers in a market that is very price sensitive.
"This autumn the property market is finely balanced. Despite some slightly encouraging economic results recently, most people understand that we are in for a period of belt-tightening. A reassessment of personal priorities ahead of austerity measures has already affected the property market. Demand is slightly down while supply is rising. This has halted the unexpected mini-surge in prices that many areas saw over the past year.
New sellers no longer have the luxury of optimism that comes with a rising market. Realism will sell property today: blind optimism won’t. At least sellers fresh to the market have the advantage to set their price in an enlightened fashion. But for some whose property has been on the market for a while without attracting a buyer a difficult decision may be required.
Sometimes certain words are awkward to say out loud, such as D-I-V-O-R-C-E in front of the young or W-A-L-K-I-E-S in front of the dog. For estate agents the most awkward word is R-E-D-U-C-E. It is the property market initiative that dare not speak its name.
The very idea of a price reduction has a strange but understandable effect on the part of many sellers. To them reducing the price somehow feels like losing money – and what will the neighbours say? But of course without a buyer there will be no money in the bank, so it is impossible to have lost any. It just feels like that. As for the neighbours, isn’t the whole idea to end up with new ones?
For buyers there is no such imagined stigma, stain or loss. For them a price reduction is all about opportunity - the opportunity to purchase a property today that was unaffordable yesterday.
But also it really is a huge opportunity for the seller. Reducing an asking price brings many more buyers into orbit; it undercuts the competition; it saves time in selling and it lets the seller move on in life instead of living in limbo. It also increases the chance to buy another property at a beneficial price by being in a stronger position to go ahead.
So for sellers a price reduction shouldn’t be seen as a sorry defeat or bitter retreat. A better word than reduction would be correction. This is a positive, bold and offensive action made as a result of carrying out valuable market research to establish true value and then, most importantly, acting in a wise and businesslike way upon that knowledge.
If a retailer can’t sell some stock then it goes on sale. If the costs of commodities like oil or gold edge too high to attract buyers then the prices will come down until they do. These are market forces and the housing market is just as affected by these pressures as any other area of commerce.
Selling property is rarely done in isolation. It is usually as a result of an important life wish or need. So if a price correction is required to get things moving in this static market it would be good not to stall. Better to shout it from the rooftop and move on - regardless of what the old neighbours might say."