The price is right: reducing the price reduces sales success

The press is ablaze with articles about a super buoyant property market and while it’s true the temporary stamp duty holiday has stimulated home moving activity, not every property will fly off the shelves.

We have always known that the ‘price it once, price it right strategy’ has been the best but Rightmove has now quantified this. The online portal monitored over 300,000 homes that were listed for sale between 13th May and 31st July 2020 to discover sellers are twice as likely to find a buyer if there is only ever one asking price, with no changes.

The danger of changing the price

Rightmove’s research found 63% of properties that were not subject to a price reduction went under offer or were sold subject to contract. In contrast, in the group of properties where price reductions were made, only 32% of these properties had gone under offer or were sold subject to contract. Reducing your asking price may suggest that there is something wrong with the property and can arouse suspicion among buyers – even though there is a clear cost saving.

The danger of overpricing

Property portals give buyers a good snapshot of any given market, so it’s easy to see if a property is punching above its weight in terms of asking price. Generally, each road, postcode or area will have an upper limit with regards to what buyers are willing to pay. Breech this and you could languish on the market for months or come across as greedy. If your property remains unsold, then you move into the ‘danger of changing the price’ category, as above, or you may enter into a detrimental negotiation process where a purchaser will chip away at your asking price.

The danger of under-pricing

There is such a thing as a property advertised for sale too cheaply! Although it is common to place an attractive price on a property in order to sell it quickly, under-price your home by too much and buyers may wonder what’s wrong with it. If it’s marketed well below the market average, you’ll ring alarm bells, as well as not realise the true value of your property.

The price is right….first time

Many sellers come to us with a price in mind and it’s our job to deliver a sale as close to that figure as possible. As professionals, however, we will also be realistic about the possibility of achieving that figure, taking into account local demand, current stamp duty rates, competition and the timescale of the seller. We’ll do everything possible to set a price that won’t budge, and that will deliver enquiries, viewings and offers.

Pricing strategies to discuss

Chat to us and we can explain the different pricing strategies we can use. Options include a price bracket – £380,00-£420,000, for instance – ‘offers in the region of’ (OIRO), ‘offers in excess of’ (OIEO) and ‘open to offers’ (OTO), all of which may help you achieve the right figure without having to adjust the asking price. 

The only way is down

Of course, there are times when a price reduction may be the only way to create more interest in a property, especially if the circumstances of the seller have changed and they need to move quickly. This does need careful managing to get the best out of any lower price and to maximize the offers submitted, so talk to us about the options available.