Published: 14/06/2021"I don't want to give my home away" is a thought on the minds of many people when they first put their home up for sale. In fact, it's one of the main concerns we address when recommending an asking price that gives you comfort and confidence.
There are some myths and misunderstandings around price negotiations and choosing the right tactics. If you add on a margin to deduct for buyers, will you lose interest by setting your asking price too high? And if you market your home at the price you're looking to achieve, are you inviting low offers because everybody wants to feel they've got a discount?
Given that the average homeowner now only moves house every 15-20 years – roughly four times in a lifetime – it's no wonder that price negotiations are unfamiliar territory. The economy, technology, buyer habits and property fashions are constantly changing, and the traditional rules of supply and demand also play their part.
This article looks at how buyers really relate to the price of your home, and how the foundations for the best outcome are laid from the very start.
IT'S NOT ABOUT MONEY
Think back to when you first saw your current home and when you decided to buy it. Of all the things that made you fall in love and feel you could be happy there, how much came down to the price on the brochure? More than likely, it was something else that got you hooked.
When you put your home up for sale, the price is at the top of the list because it's the only thing left for your home to give you. It's been a loyal friend that's served you well, but now it's time to move on, and the price you achieve will affect the move you can make.
When you're looking for a home to buy, your priorities are very different: size, number of rooms, location, condition, potential, noise, natural light, parking, the garden… Not to mention THAT feeling when you find The One.
Most buyers spend as much money as they can to get the best property they can; one that ticks all the boxes to give them the lifestyle they're looking for. And while everyone does indeed love a bargain, it rarely makes the list of a buyer's must-haves.
THE FEAR OF MISSING OUT
Nobody pays the asking price is a belief that pops up from time to time when we're talking to homeowners about their pricing strategy, but it's nowhere near as clear cut as that.
The Behavioural Science Unit at Barclays recently carried out a survey among homebuyers. They found that 30% didn't even try to negotiate on the price, mainly for fear of losing a property, but with a dash of cultural embarrassment thrown in for good measure.
It makes perfect sense. When you fall in love with a home, an emotional attachment begins to form, and you do everything you can to secure it. You don't walk away from the perfect property purely because you can't get anything off the asking price. Your dream usually takes priority.
But, if 30% of buyers don't feel they can or should negotiate, they're unlikely to enquire about a home whose asking price appears above their budget. That's a lot of people to lose.
DO YOU NEED A BUFFER?
The short answer is… maybe, but not necessarily. Sorry!
When lots of homes comparable to yours have sold nearby, they provide a clear price story backed up by plenty of local evidence. You know exactly who to target, exactly who will buy, and for exactly how much. There's little need for negotiating margins.
But for a home that's unlike anything around it, and where there's some uncertainty over the eventual sale price, a buffer can be a useful tool. Perhaps for a unique architectural design, or where improvements have lifted the accommodation or specification well above neighbouring homes.
Timing can also be an influence. There’s lots of momentum right now, and you can read many tales of people paying well above the asking price. That's because confidence is high and supply is low. When confidence dips or when competition increases, that's when buyers may try to negotiate downwards (although not usually at the expense of losing a home they love).
Your asking price should always be a conversation between you and your agent that takes into account local sales, current market conditions, strategic price points and generating excitement. Of course, you also need to feel comfortable with your strategy, and we always look to tailor an approach to you.
PLAYING THE PORTALS
Estate agents get many their new leads online, often through property portals like Rightmove or OnTheMarket.com. But the portals don't simply display your home; they tell its story of being for sale.
When someone searches on a portal, they're asked to choose a from and to price range to narrow the results. It's transformed home hunting by removing any nuance, and we need to ensure that your asking price doesn't leave you stranded. For instance, if you were likely to achieve £490,000 but you asked £505,000 (less than 3% higher), nobody searching up to £500,000 would see your home. You'd lose them all.
Instead, you risk increasing the time it takes to find a buyer by sitting among higher-value listings, making competitor homes look like better prospects, and advertising to people who expect more for their money.
With your home's marketing timeline available to everyone, keeping that story short is crucial to getting the best price. A longer tale of price reductions and sitting on the shelf provides the opening to negotiate you down.
YOUR AGENT'S DUTIES
Buyers often ask questions like "what's the lowest offer they'll take?" and "what will the owners accept?" and here's where your agent needs to be absolutely clear that they are acting for you, the seller. If all we did was to ask you how little you'd accept and put forward every low offer without even challenging it, we wouldn't be doing our job.
Your agent is there to put you in the strongest possible negotiating position, and a big factor in that is how firm your agent holds. When they express doubts about your price or even suggest that you might take less, it turns the tables in favour of buyers.
So as your agent, it's up to us to demonstrate that your home is worth the price you're asking, which is why it's so important that we recommend a credible starting point. It's far easier to negotiate a higher offer when an asking price creates enthusiasm than when it creates an obstacle.
Your buyer doesn’t need to feel they've got a bargain; they need to feel confident that your home is the perfect choice for them and their future.
From our perspective, it's you, the seller, who needs to feel you've got a good deal. That we've worked in your interests, found you the perfect buyer and got you the highest possible price.
Are you thinking of selling your home? Expert advice is right here, and we'd love to be part of your move.
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