Today’s tough market requires sellers to think like professionals. Here’s how.
Homeowners are facing twin challenges. Firstly, there is a shortage of buyers. Research from the Council of Mortgage Lenders shows that UK lending almost halved during the first quarter of 2008. Secondly, there is increased competition. Research by rightmove.co.uk indicates that there are 25% more properties on the market compared to six months ago with a ratio nationally of fifteen sellers competing for every buyer.
To attract that perfect buyer to your one-in-a-million home, you need to up the ante, and think like professional marketers. Be scientific in your approach to selling your property and focus on the 3Ps of attraction: Price, Presentation and Promotion.
After two years of London bucking the national UK trend, it now appears that the capital is falling in line with the rest of the country. The widening gap between some sellers' asking price aspirations and what buyers are willing or able to pay is one of the factors behind the lower number of transactions. Getting serious about attracting buyers through more realistic pricing now appears to be more firmly on sellers agendas, after months of denial.
The 3Ps of attraction
Pricing Intelligent, researched pricing will set your home apart from the crowd. The more 'buzz' you create around your home when it initially comes onto the market, the quicker it will sell and the better result you'll achieve. Know your competition and how it is priced.
Product It's may be a cliché but first impressions count. Package your home so that it's a product people want to buy and a place buyers can see themselves living. Make sure your garden tidy and the interior neat and neutral.
Promotion How do you get your property to stand out to the serious buyers? This used to be the simple matter of advertising as "House of the Week" in your local paper but today's buyers are much more savvy. These days, a third of buyers will view the house they eventually buy online first so it's vital that you ensure your property is "showcased" effectively.
Miles Shipside, commercial director of Rightmove: "This is a belated but in some ways welcome adjustment by sellers to lower their asking prices in London. It should go some way to helping buyers whose affordability is being stretched still further by rising inflation and mortgage rates.
"Areas with more exclusive homes that are in limited supply tend to resist falls for longer than property types that are in greater supply. When more sellers of similar properties are in competition, they drop their prices to attract buyers to choose theirs over others. It is the less desirable areas with more run of the mill homes that tend to fall first. The middle to top end of the market has seen more hype in their pricing however, so if the market slowdown continues, they could find they have to be even more negotiable in the future."
Additional challenges
Further reductions in the asking house prices will be required for properties in over supply, as buyer affordability is still deteriorating against the wider economic backdrop of the average cost of living outstripping wage rises and the upwards spiral of mortgage rates. The restrictions on mortgage availability give sellers an additional challenge, as the number of readily mortgageable buyers they can target has been severely restricted.
Shipside adds: "Lenders are trying not to lend and are just cherry-picking for profit. With approximately half the mortgages funds available, sellers have to decide whether to try and attract the half of buyers that can still buy. For most sellers, that means whatever they were thinking of asking at the peak of the boom, they need to take at least 10% off."
After a decade of relatively easy selling conditions, motivated sellers and their estate agents need to act together to ensure their property has the power to attract that one buyer away from the other fourteen competitor homes.
With the higher level of competition and given the difficult economic background and low level of transactions, sellers and estate agents need to 'sell their way out' of this downturn by being very pro-active.
