Should we lower the asking price?

[Elz58]

We put our home on the market mid Dec 2023. Three estate agents all valued it at £625k, and we marketed it for £615k.

We had two viewings early on, one of which said it’s their dream home, but they need to sell their house first before we can proceed. They’ve since changed estate agent (to ours, incidentally), but it’s pretty quiet for them too.

Since then we haven’t had a single viewing in 6 weeks. Our agent brought up
lowering the price.

Should we lower the price now, and if so, what to? Or wait until Spring, when there might be more buyers around (right?!)

If you HAVE to move I would get in well in advance of the spring rush, most definitely. I think there are going to be quite a lot of re-listings in that bracket that didn't sell last summer.

Also, the sooner you make a reduction (which I can see on property Log), the more serious I am going to think you are about moving. At that price range I wouldn't want to mess around with a buyer who is just testing the market but actually might move or might not, it makes no difference to them.

Swift reduction: motivated seller, far more interesting than one that languishes for six months before reducing or even just never does.

It’s hard to advise without seeing a link!

Hard to advise without a link and location. Markets are not homogenous-£625 or so is small family home in some parts of London (a flat in others) vs a much larger home in other places.

We’re in Bedfordshire, London commuter belt, it’s a 4 bed detached.

It’s marketed at the same level as other similar homes in the area. But they aren’t going under offer either, so it’s likely we’re all over priced I think… the estate agent said everything over £500k around here is taking a long time to sell.

I’m tempted to reduce to £595k to bring it into a new Rightmove filter, but not sure if a £20k reduction is a bit of a waste of time and not enough… Or wait until Spring to reduce

As a buyer, I wouldn’t take anything below a 5-10% drop seriously. I’d only think this seller is still in 2021 la la land. All these EAs obviously don’t know the market and making up prices to make up for their own business losses by saying anything to Sellers to get you to sign with them. EA work for themselves, not even for the sellers.

In that kind of area, that seems a premium price- and unfortunately premium properties take longer to sell at the best of times, never mind when borrowing costs are high.

Have a very frank conversation with your agent about the market, and what they are going to do to make your house sell.

How much did you pay for the property, and when?

I think you should try listing it at 595k as that will put your house into a new Rightmove banding as you say & also be cheaper than similar houses in the area. I would normally suggest dropping 5% at a time as this is the advice EAs gave us with our last sale. However, you did list it at a particularly unfortunate time just before Christmas so I think it’s possible you will get more interest at 595k now it’s a better time of year for house buying & selling.

I agree with @Twiglets1 : drop to £595k. It will take it down a Rightmove band, and starting the number with a 5 will give it the magic pricing effect. Don’t worry too much about Property Log. No one who’s viewed the house we’re selling seems to be on Mumsnet. Any buyers will still offer lower than that, but you’re not going to get any offers if you don’t get any viewers, so dropping the price now is worth it.

I agree with @KievLoverTwo and @cupcakesarelife
Do you actually need to move or are you just 'testing the market'?
If you are need to move, you need to reduce by a significant amount, 2 or 3% will make no difference. If someone wanted to offer you this amount, they would have already done so. I think, in general, that the houses not even getting any viewings tend to be significantly over priced >10-15%. Your comment about all similar listings not being sold does suggest that this is happening and also that all the agents don't understand the current market.
If you really need to sell, I would reduce to 550K and hope for some competing bidders. If you are ambivalent about moving, you could reduce to the lowest figure you are prepared to take and see what happens.

I think it sounds like your going to need to drop 10% if you aren't even getting viewings. You could have a frank conversation with your agent about where you need to be on price to really get some interest. I wouldn't hang around though, it's looking like spring into early summer is going to be highly competitive on price. Get that buyer now if you can.

Is Property Log where you can see when it was listed then the date reduced? Do most buyers read a lot into that?

You need to get further below similar houses to get interest and bids. Otherwise you will be chasing the market down for the next 1-2 years

Property Log tells buyers when the house went up and every reduction is listed under it. install it yourself to see. It's a chrome extension. Every buyer has this tool and can see what's been happening to every house. Also, even if you re-list the house under a new agent, it will get linked to your old listing 99% of the time. As a buyer, Property Log is critical.

Most buyers probably won’t have even heard of property log ( though yes it does show reductions so is useful knowledge for buyers who do know about it).

I wouldn’t agree that most buyers will
have property log, and even if they do I’m not sure being able to see a history of price drops is particularly detrimental to an individual house. Its interesting in the context of the market sure, but the average buyer either doesn’t know about it or doesn’t care.

Oh do you think? I thought everyone had it. But anyways, even if it's not that popular, then it just shows it's not tools like Property Log that are influencing buyers then. It's just the market. It's a tough time for sellers for sure then

The minority, I expect but I think buyers are becoming more clued on and discerning. If I were a potential buyer in this market, I would not take a 2-3% at all seriously and would ignore the property because I would assume that the seller was not serious about selling.

I had never heard of it until someone mentioned it on Mumsnet fairly recently and I’m a property geek.

I agree with this. Most people don’t approach house buying with the forensic detail suggested by some on here. Maybe they should but I really don’t think they do. For many people it’s still largely a decision they make with their heart. And of course they can see with their own eyes how well the house they are interested in stacks up against others in their local area irrespective of analysing all the possible data.

I think it depends how keen you are to sell.

We've been on the market just under 3 weeks and are thinking about dropping the price £10k next week. That's about 4% of the initial asking price, but puts us into a new bracket on RightMove and is significantly lower than other identical houses have sold for in the past month or two so I'm happy with not reducing it further yet. The absolute max we could drop the price is 9% but any more than that and we simply won't sell.

I think times have changed, the main catalysts being the new cost of borrowing and also the unpleasant recent inflation experience. People are looking much more closely at costs. Putting the very relevant cost of living and inflation increases aside, consider the following over simplification for new entrants :

As a buyer in 2021 you could get a mortgage of 250k over 25 years at a promo rate of 1.25%. If you had a decent deposit and a good credit rating. Total approximate "percieved" cost of that loan to the buyer - around £292k over the term. Give or take minor changes to interest rates. Everyone had got used to those rates and had begun to see them as the modern normal.

Now skip forward two years, a buyer has decided to borrow over 30 years as everything else has got so expensive. Assuming they still have an average deposit the rate is now 5.99%. The total "percieved" cost of the loan is now possibly going to be £539k !!!

You can hope that interest rates will moderate, and I believe they will - somewhat. It really does depend though - and its absolutely feasible that borrowing costs could also increase further and inflation not be back in its box for sometime. The change in cost to buy a house is absolutely staggering.

I know we English aren't known for being great at maths but I find it hard to believe people are not recognising the significance of the change. Its basic stuff for anyone well enough educated to be in a position to buy. The carefree times of cheap debt have finished and buyers are aware of it and being careful ...

I agree people are wary of taking on too much debt and very aware now that property prices can and do fall as well as rise. So I’m sure most do the maths of what they can afford & what they could afford if interest rates were to start rising again. I just don’t think most use things like property log to see how many times the properties they are interested in have been reduced. I could be wrong as got no data to back up my opinion. I just don’t hear it talked about outside a few people on Mumsnet but that’s just my experience I know.

You may well be right about property log Twiglets1. I thought it was widely used but could equally be wrong.