Are you a winner or loser in the property stakes? Nick Churton of Mayfair Office takes a look at what it takes to come out on top.
Price governs property sales. It is not the location. It is not the size. It is not the condition. It is the price. Location, size and condition influence price. But price still governs everything. So here is a fun game to play with your own home. Estimate three prices. The first figure, a very high amount, beyond even your most rose-tinted view is the figure that your home would never fetch in a month of Sundays. The second figure, a very low sum, is the sort of price at which a frenzied hoard of ruthless cash buyers would bite your arm off on the first day of marketing - and each then be prepared to gazump wildly if they were unsuccessful. This is a price that would be met in a firestorm and with everything that could go wrong, going wrong. The third figure is between the other two. This is the amount your property might fetch if pursued by a couple of ready, willing and able buyers after several weeks of marketing on the internet and in the press. These buyers wouldn’t have been alone in viewing but the others will have decided against proceeding further for whatever reason.
You can play this game with any property and all three figures determine the speed at which the property will – or will not - sell. Clearly human nature demands a preference for a seller to try and achieve the first figure and a strong reluctance to descend to the second. But the clever player will steer the third, middle course. In a property sale one can determine the price one gets and one can determine the time it takes to sell. But it is tricky to determine both together – especially in this market. To achieve a perfectly timed and priced sale the seller has to move the price more towards the realistic than the optimistic, and in some cases, sadly, even nudge the pessimistic. Or they must be lucky. The question every seller has to ask is, am I lucky? Or, do I have time to be lucky?
The good news is that even in a depressed market such as we have now there is a level of movement stimulated by those who must sell and/or buy, usually through reasons of birth, death, health, marriage, divorce, job change, retirement or money concerns. The even better news is that moving home is a game usually played over two legs. There is the home leg, selling, and the away leg, buying. Usually, what one loses on the swings one gains on the roundabouts. So in the end all things pretty much level themselves out.
Remember that first figure, the highly optimistic one? That territory is reserved for a bull market with buyers scrambling to purchase what little there is available, where lenders are throwing money at borrowers, where there is much less unemployment than we have now and far more confidence, where there are no austerity cuts, where the property market is on a charge upwards and panic buying is rife. Can there be any reasonable person in this country who feels we have these conditions right now?
Price realistically to win the property game.