How to sell a property in a recession
Glentree Estates offer some advice for making a sale in difficult market conditions.
In a recessionary market, where there is likely to be a surplus of supply, it is essential that your property is seen to be more attractive and desirable than any other in the area. To do this, there are several ways of maximising the opportunities:
CHOOSE YOUR AGENCY CAREFULLY One committed agent, who is predominant in the area, is far better than two or three agents covering a wider patch who are less likely to give their all because they are spread more thinly. ‘Take the agent’s advice on value but beware estate agents giving you a ramped up value in order to gain the instruction,’ says Trevor Abrahmsohn of Glentree.
PRICE This is the most likely sticking point of a sale of any commodity, let alone a house or flat. In bull markets, price is less critical, but in a recessionary market it is the key to success. In this situation, when budgets are much more fixed, you want the gap between buyer’s and vendor’s expectations to be as bridgeable as possible. Most buyers start off with a budget, which is probably 10%-20% less than the figure they will end up paying. However, if the asking price is 20% higher than the value, then there will be a gap of up to 40%, which will deter even serious buyers from looking at your property. ‘The classic sign of overpricing is that prospective purchasers walk in and walk out without making an offer,’ says Abrahmsohn. Either put the house on the market at a realistic price or ask for offers in excess of a certain sum, which ideally should 85% of the price you actually want. If the price is too high, a buyer will not come at all; but if it is lower – when he or she comes to see the house, ‘the door to their emotional heart is a little bit open,’ he says. ‘Once the house starts to work on them, they may decide they can put in a higher offer and when they realise they may never find this sort of property again, perhaps raise it again. I would rather have a buyer on the hook, who I can nurture and produce a sale at even 80% of my price, than no buyer at all.’
YOU CANNOT UNDERSELL YOUR PROPERTY If your house is properly advertised and marketed, you cannot undersell it even if it is initially marketed at a low price. ‘You should have more than one buyer because the price is keen. Then you can play one against the other until you arrive at the price you are happy with,’ says Abrahmsohn. If you only have one buyer, you can always say no to a low offer.
DON’T RESIST A SALE BOARD People don’t understand the power of the board. Without a sale board, you are missing 30% of the market. ‘This is made up of latent purchasers, who haven’t registered with an agent and don’t read relevant publications because they haven’t quite got to that position yet. But they might consider buying, if they walk past your house and see a sale board,’ says Abrahmsohn. ‘With no board up, they wouldn’t even know it was for sale.’ A board also indicates a serious vendor and once you have agreed a price, the board again comes into its own. ‘The period between offer and exchange is very vulnerable. If a board is up, it helps keep the pressure on the purchaser to do the deal,’ he says.
