Why you shouldn't drop your asking price
Not what you’d expect to hear from an Estate Agent?
If your house has been on the market longer than you expected, surely the solution is to drop the asking price? Has your agent been saying it all along? Did your friend hint at it the other day?
But there isn’t a guarantee, that once you’ve dropped your price, a buyer will magically appear.
There is, however, the guarantee that you have created irreversible damage to your chances of achieving a price near your expectations.
1. There must be something wrong with it?
Even after working in the industry for seven years, this is always my first reaction to a property that reduces its price, it’s the same as using two agents “they must be desperate” people make their own conclusions. By reducing the price you’re tarnishing the quality of your home, applying a reduced to clear sticker to your product.
2. It doesn’t often have the intended effect, it creates vigilance
We have seen this first hand, homeowners are led to believe that dropping the price guarantees a sale. It rarely works this way. If stocks were falling, would you buy them?
3. Once a buyer is vigilant, they are analytical
Buying phycology suggests every purchase is made using the emotional part of our brain. So if we fall in love we pay more, if we are analysing we pay less. Alerting buyers to a potential problem sends their analytical brain into overdrive and their offer amount into reverse.
4. Confidence (or lack of)
It is important you, and your agent, believe in your asking price. If you aren’t confident, it will show and if any buyers get wind of it, one of two things will happen, their offer will reflect or they won’t offer at all.
5. A slippery slope
Once you have reduced once, and it doesn’t have the desired effect, where does it stop? We often see this in new listing “I’ll just try an extra £20,000 for the first week, then drop it”. If you reduce after week one, will you be compelled to drop again week 3? Will buyers expect you to drop again?
It’s surprising to hear, but most buyers don’t buy on price, they buy on quality and commonly exceeding their budget. Think back to the properties you’ve brought in the past…
And if you are still considering dropping your asking price, ask your agent what else can be done. There is a multitude of things, other than dropping the price. For example, is the marketing selling the property, is the property staged to sell, is it marketed towards its target market?
Consider the damage, ask for another solution and if one is not forthcoming, let's have a chat.
T: 01773 749972 | W: www.amber-homes.co.uk