One thing you shouldn’t do when the price isn’t right
A friend of mine told me a story recently about a story they read which happened in the north of England.
Basically a couple had instructed an agent who valued their property for £30,000 more than the other agencies which were invited round.
After very little interest over six weeks the agent advised them to drop the price by £15,000 to create ‘more interest’.
Then when they agreed the agent said ‘we’ll advertise this change to let people know we’ve reduced the price. It’ll create a buzz’.
There was a tiny bit more interest but not much and a ‘silly’ offer came in for £40,000 less than the new asking price.
Fast forward a month later the agent advised another drop, this time slashing off a further £15,000. A bit more interest but again only silly offers which were way under the current (correct) market value for this property.
The couple moved agents when their agreement ended and the newly instructed agency priced the property correctly and had it under offer within a month.
Two alarm bells were going off when I heard this story. Firstly, it sounds obvious to me the original agent overvalued just to get the instruction and that’s why the property ‘stuck’ on the market.
Secondly the advertising of the ‘reduced price’ or ‘new price’ call it what you will, smacked of desperation and sent out a message that there was a problem with the property. (There wasn’t – it was the initial valuation which was problematic).
Sometimes a property genuinely valued does need a price reduction for whatever reason. But you don’t need to advertise the price cut because that doesn’t do the property’s owners any favours. There are always new buyers coming to the market who wouldn’t know the property’s price history.
Our advice at Cotswold Lettings & Sales is if you have to drop the price do so, but don’t advertise it.
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