Selling house - when to reduce price?

[TheRevengeOfMrGrumpy]

We put our house on the market a few weeks ago and have had about one viewing per week. Some other properties for sale in the area have reduced their price after only being on the market for 4-6 weeks. I don't understand this. Unless they want a quick sale, why reduce at this point when the market is quiet?

I'd be interested in any strategies you have used when reducing your price to generate interest. Do you reduce the price and then still get people making offers 10% under the asking price?

[RCheshire]

When selling I've always worked on the basis that offers will come in around 10% below what I'm asking (some may be higher, some lower). I know it's different at the moment in parts of London.

If you reduce you should still expect people to offer against the new price. If you think about it the original higher price is irrelevant for potential buyers as it was a price at which no-one was interested in the house. So there is one house on my Rightmove saved list which has dropped over three years from 695k to 499k. It's been at 499k for ~6 months, so clearly people will offer below that figure.

Personally, if you've only been on for 4-6 weeks I'd give it longer before dropping if you're not desperate to sell. Each time I've dropped my asking prices it's been somewhere between 3 and 6 months of being up for sale.

There was a saying I heard used in the US which said that if you weren't getting any viewings drop by 10%. If you were getting viewings but no offers then drop by 5%

[TheRevengeOfMrGrumpy]

Thanks for that, very useful. At the moment, if there's not many viewings, is it down to the price, or just the time of year? A bit of both I think, but what's the split? Seems a bit premature to be cutting the price at present when there doesn't seem much activity in the area.

[marinaaquamarina]

I think you're describing the difference between 'wanting to sell' and 'wanting to sell ONLY at a given price'.

The first person will definitely sell because they will adjust to what the market is offering - the second might or might not depending on the price.

My friend is selling a house at the moment and had it up with an agent for a month at what even she describes as the 'best possible' i.e. slightly ambitious price for her market.

She got two viewings in a month and both were tag-ons to other viewings the agent was doing - neither had specifically requested to see her house.

The agent has just asked whether she would reduce and she's gone down by 4% leaving a little more she can drop - just so that a buyer can feel they've got a discount - don't know how it will work out as has just happened.

There are buyers - at the right price - as the house 5 doors away has just sold.
The way she looks at it is that it's now coming up to the buying season - she's tested the market - and has learnt she needs to reduce. All the same buyers are still out there getting their Rightmove and Zoopla alerts. When the 'new vendors' start maketing their houses at 'ambitious' prices, my friend thinks she'll be ahead of the curve and will catch a buyer while other vendors wait a few months to reduce and maybe miss the summer market entirely.

Don't know - it's just a theory - but it sounds reasonable to me!

[TheRevengeOfMrGrumpy]

I'm sure there are some buyers out there, but if we have not really reached the buying season, then it seems a little premature to be reducing the price at present IMO, esp if the number of potential buyers trebles in a couple of months. I've no idea what I'm talking about though as I've never sold a house

[marinaaquamarina]

Well, this is it - isn't it - the 'unknown' element!

She thought it was the market that was quiet (not that her price was wrong) until the neighbour's house sold - and it was a more expensive house - just in better condition.

You have to find the balance between believing the market is quiet and not kidding yourself that maybe your price is too high - it's an emotional tightrope I think.

As you said, there may not be 'much activity in the market' OR there may not be much activity in the market 'at your price' - which is it?

It's the $64 million dollar question. My friend got the answer when her neighbour sold - maybe that's the only proceedable buyer looking in her street - so she may have lost her chance for a few weeks/until another buyer turns up/forever!!!!

Or maybe a load of buyers will turn up and she'll wish she hadn't lowered her price - but if that's really truly the case, then they should bid her house up.

That souns so unlikely that I think she can only be right in adjusting her price now.

But it depends how much you NEED that price you're at now - weighed against how much you WANT to move.... sorry for my emphasis capitals - ...

[RCheshire]

Traditionally the number of people looking to buy really fluctuated throughout the year. The sun came out, key school application dates arrived etc and people started popping into their local estate agents.

Nowadays people don't 'switch off' their Rightmove alerts for three months and they refresh their search when sat on the sofa at home or bored at work - so I'm not sure the seaonal 'looking for a house' theory is as valid anymore.

It is still true that supply dries up at certain times of year (over Christmas when people don't want the hassle, Jan/Feb when photos won't show a garden at its best & summer when people are away on holidays etc)

As marin implied, most people do not want (or cannot) sell at any price. Otherwise you could drop your price by £500 per day and you know it would sell eventually. Everything has a price at which it will sell in a given market.

What you are wondering is whether if the best price you can get today is £10 when there are 5 people looking for your house style/in your area, whether the best price tomorrow is £12 when there are 15 people looking for your house style/in your area. Of course there may be only 4 people looking in three months, or there may be an identical house for sale for £9 - you just don't know!

For what it's worth the two places I've sold recently:

1. kept at original asking price for ~9 months, dropped by 5% and then accepted an offer ~6% below that. None of the competitors have sold yet
   
2. initial price 10% below all similar houses. Accepted an offer 5% below that. None of the competitors have sold yet

[marinaaquamarina]

Exactly! Then throw into the equation that if you're a serious seller you're probably also looking to buy.

Until you find your 'dream home' you think, 'I won't reduce my price' BUT what if all the buyers on your street have already bought your neighbours' houses by then!!!?

So you have to reduce your price dramatically to get a buyer - to secure your 'dream home'.....

The OP doesn't sound as though she's found a house to buy yet, so isn't keen to reduce the price - but if you don't secure a buyer - you also won't be taken as seriously by the vendor you want to buy from... - if you wait until then to reduce your price, you may lose your purchase.

Chickens, eggs, horses and carts... which comes first?

My advice would always be don't let your house go stale, lingering at too high a price for so long - eventually people start to think yours isn't selling because of neighbour problems or structural faults or any other horror they can think of... remember loads of people use propertybee and zoopla and they know how long a house has been hanging around - it's a red light in itself.

[IceBergJam]

My house was on the market for £99,950. After 4 weeks I reduced to offers over £95,000. It's been 8 weeks now. No interest. I really need to sell it. It was my first house before I met my husband, and it is a money pit. I bought it at the peak of the housing market for £112,150 7 years ago. Renting it out does not cover the costs. I still pay £200 a month on it, then there are repears.

Thats why I reduced mine so quickly. We want to move, and can't with this house hanging over us.

[TheRevengeOfMrGrumpy]

RC - yes, I suppose the £10/5 or £12/15 question is what I am thinking. I cannot currently see an overwhelming reason for reducing the price at present when it's still feels like winter and not much appears to be happening. We're looking to move to a more expensive, in demand area and do need to sell, but not at any price as we'll just be having to make up any difference ourselves.

The use of Rightmove etc is another question. I had assumed the majority were like we were: checking RM daily with numerous alerts. Talking to friends and colleagues, that just doesn't appear to be the case. Based on very little evidence I still think there is a season. Although people may receive alerts about houses, do they really do anythingunless their house is currently on the market/have an offer themselves?

[marinaaquamarina]

I would say the 'overwhelming reason' will come when you've found a place you want to move to - if you haven't yet, then you're in vendor limbo.

When you find the place - you'll then cack yourself that you won't be able to sell your house in time - and you may not be able to. (without a reduction)

I 'feel' more in control when I'm deciding when to reduce my house price - not when I'm being forced to get a quick sale to secure the house I want.
I would rather secure my sale and then haggle down vendors from a position of perceived strength.

You might feel more secure the other way around.

[karron]

We put ours on slightly higher than recommended by the estate agent we used but agreed to review the price after 6 weeks. Our house was one of the last unextended houses, in one of the bigger plots and was close in value to a stamp duty threshold so we wanted to test the market a bit at a higher prise.

We got a few viewings but not many so dropped the price by 5%. We then got loads of viewings and excepted an offer just under the stamp duty threshold about 10% under the original asking price.

I think if you still have regular viewings and the feed back isn't link to the price being too high, don't drop it yet.

[Tau]

We have just dropped our price; we've had only one viewing in over a month! I hope we'll get more viewings now.

[Plumandpears]

In my area good houses sell if they are priced correctly. Never trust the estate agents, certain ones are known for over pricing

If the price is not right it can be such a put off. People are able to do their research just as well ( if not better than the EA) using the Internet, especially if they know the market.

We are in the process of buying. You see the same old properties again and again on right move. By the time they get reduced we are seriously not interested (even if it looks amazing). It just makes people wonder what is wrong with the property, it also makes them think it will take as long again to sell when they need to move so they will avoid.

I know you said you are not in a hurry, but if your house has been on for a long time you may only get the people who are waiting to make really silly low offers.

Good luck, It's such a stressful time. You also need to get the EA working harder for you. They should have lists of buyers looking on their books right now as the market is very slow.