Here is a conundrum to test those who think they know what is going on in the
property market: an estate agent has two houses for sale, both fine examples
of thatched New Forest cottages, both beautifully restored and put on the
market at a similar price, at roughly the same time. One is snapped up
within a few weeks and sells for more than the asking price after a bidding
war between two buyers. The other languishes on the shelf for months.
This is not an imaginary scenario, but the predicament faced by Kevin Allen,
associate director of John D Wood & Co in Lymington, Hampshire, who has
been trying to sell Thatched Cottage, in Brockenhurst, since last November.
It should have been an easy job. As rural idylls go, this one ticks all the
boxes. Set on the edge of one of the most popular local villages, and
overlooking the open forest, this four-bedroom house, complete with climbing
roses round the door, should tempt anyone wanting miles of open space on
their doorstep, as well as amenities nearby. Brockenhurst, which lies four
miles north of Lymington, has shops, restaurants and an 18-hole golf course.
Yet the property has stuck, even though the owners dropped the asking price
from £1.35m to £1.25m last month.
In the meantime, Allen has just completed on Butlers, in Norleywood, which
sold for more than the £1m asking price, even though it is further from the
shops and the forest. “I have sold Butlers three times in the past 20 years,
and it always goes well, whatever the market conditions,” Allen says. “It
sits in the middle of an acre plot and is quite secluded. The Thatched
Cottage is, in many ways, a better property. It is right on the forest, and
has wonderful views, but it does not afford privacy. Walkers can go right
past the front door.”
As property prices continue to fall, even the smallest niggles – issues that
would be overlooked in a stronger market – are prompting buyers to walk away
or make offers well below the asking price.
Exclusive research from Savills for The Sunday Times shows that homeowners
trying to sell properties that are less than perfect would have to drop the
asking price by an average of 7.1% to secure a sale within 12 weeks – almost
three times the average price falls of 2.5% reported last month by Halifax.
Factor in negative factors such as traffic noise or poor location and an
11.6% cut would be necessary.
In short, a two-tier market is emerging across the country and across price
bands – with a growing gulf between the best and the rest. “The real
difference with the market now is that properties that are not in turnkey
condition or not in a great location will stick, whereas they would have
been considered perfectly prime last year,” says Jonathan Hewlett, a
director at Savills.
The story of Ruffold Farm and Norther Farm illustrates how sensitive to price
and presentation buyers can be. The two large houses are next door to each
other in Cranleigh, Surrey, with driveways just 100yd apart. Both have big
gardens and were put up as probate sales last September. Both come with
outbuildings and a pool, and both are in need of modernisation.
Norther was snapped up for £400,000 below its £3m price last December, after
almost three months of negotiations. The asking price for Ruffold has
dropped from £3.05m to £2.8m, but there are still no takers. “Ruffold is a
slightly bigger house, and the buyer would get more for their money,” says
James Grillo, an associate from the Guildford office of Strutt & Parker,
the agent marketing both properties. “It is also slightly closer to
Cranleigh, if you wanted to walk into the village. But Norther was better
presented. Although both properties were vacant, Norther had more furniture
in it, and still felt like a home. They also kept the gardener on, which can
make all the difference.
“In this market, buyers quickly take the better of any choice. If a property
scores eight out of 10 on their wish list, then it might sell. If it only
gets six out of 10, it will stick.”
The gulf can be even greater towards the lower end of the market, where buyers
tend to be more dependent on finding mortgage finance – which is
increasingly difficult to obtain in the current climate. Figures from
Savills show “blighted” homes valued at less than £500,000 would require a
hefty cut in price of 14.7% – against 8.4% for the merely average. The
equivalent figures for properties between £500,000 and £1m drop to 10% and
7.6% respectively.
This can be a difficult message for vendors to accept. While determined to
drive a bargain on their new home, many are reluctant to accept their
existing property is also worth less, especially if it has a defect –
however small. Avril Campbell, sales manager at the Tooting branch of
Kinleigh Folkard & Hayward, in southwest London, has been trying to sell
a fairly standard Edwardian four-bedroom house on Beechcroft Road since last
November. A few weeks ago, she persuaded the owners to drop the price from
£575,000 to £549,950 – but the reduction of just over 4% has not been enough
to entice buyers.
And why should it? As the owners of Beechcroft lowered their price, Campbell
was busy selling a far better presented four-bedroom Victorian terraced
house in nearby Selkirk Road for £20,000 less – after just seven days on the
market. “It would have been easy to put that house on the market for
£550,000, but it would not have sold,” Campbell says. “In this case, the
sellers listened. They did up the house and only showed it in an immaculate
condition.”
Campbell’s words are probably not what most sellers want to hear, especially
those holding out for a better offer. In today’s market, however, the buyer
is king. If you don’t spruce up your home and lower its price, the owner of
the similar property down the road certainly will.
How to make sure your home sells
Get the right man for the job: call in at least three estate agents to
pitch for the sale. Quiz them not just on how they calculated the asking
price, but on their sales record for similar properties and tactics for the
slowing market.
First impressions:“Make it look good, make it smell nice and clean the
windows,” says Lindsay Cuthill, head of Savills in Fulham. “Flowers and
candles still apply.”
Get your legal papers ready: the quicker the deal can go through, the
more likely it is that it will go through.
Take control:if your property is blighted by anything beyond your
control, cut your asking price or take it off the market until conditions
favour the seller.
Be realistic:if your home fails to attract a buyer in 12 weeks, then
reconsider the price. “You need to reduce it to bring in a new range of
buyers,” says Ed Mead, a director at Douglas & Gordon’s Chelsea
office. “If you’ve got a house on at £395,000, reducing it to £375,000 isn’t
going to do any good. It has to go to £350,000.” If that doesn’t work, then
call in two more agents on a no-sale, no-fee basis.
This ties in exactly with my own experience trying to by a period country house in Essex. Anything decent with good amount of land and privacy sells quickly at a good price close to or even above asking. Everything else is basically sitting there not selling. Two tier market indeed. .
Philip , Chelmsford, Essex
My wife and I sold our house by Dutch Auction - we lowered the price by 2pc every two weeks until it sold. After two reductions we had lookers. After the third reduction, we had serious lookers. After the fourth reduction we had an offer even lower - and accepted it. The method works very well.
Rick, Orlando, USA
There is no such thing as a perfect home. Every home needs some maintenance in one form or another. Some homes are only presented better. May hidden maintenance needs await all buyers of property. Beware of the real estate spiel, they know nothing about maintenance. They are sales people.
Jim Wills, Brisbane, Australia
During the 90's our lending institutions got in trouble to excluding those who could not afford to buy a house. Home ownership was the "golden ladder" for poor and monorities. So the new centery saw run away lending. It was all about making money and now those same institutions are being bailed out.
William, Atlanta, USA
It is much smarter to set your proce at the minimum amount that you can accept.
I've just sold a house on this basis and becuase it looked a bargain three sets of people took it way over the price by trying to outbid each other.
I therefore got the price that I wanted.
janice peacehaven, britain, britain
"snapped up after 3 months negotiating"...
property journos and their flair for drama!
Elizabeth, Abu Dhabi, UAE
Who cares, other than millionaires - about houses like this?
Kiera Hardie, Glasgow, United Kingdom
well it is not rocket science- ask too much - you arent going to get a sale, be more realistic- you will get your house snapped up.
fiona, leeds,
Surely anyone in the current market who is NOT insisting on a huge asking price reduction is off their trolley.
Brian Roberts , Plymouth, Devon