Putting your house on the market is an exciting time. Your estate agent will come around and value your home, telling you what they think it is worth, and given the general upward trend of house prices in most of the UK, this price will probably come as a pleasant surprise.
The heady days when your house earned more per year than you did may be gone, but average house price growth in the UK has still been healthy for a long time. The ONS statistics show that house price growth has been in the positive since 2012 and prior to the financial crash, it was running at above 10% year on year.
So you put your home on the market with a smile, delighted with the prospect of the windfall to come...
But sadly, all is not what it seems, and the price you ultimately get is rarely the price you initially asked for. A series of price reductions may follow.
Drop #1: Dropping the asking price
The first hit often comes due to lack of interest.
A slow market, or an over optimistic asking price, can lead to little or no viewings.
This may be due to seasonal peaks and troughs, such as a summer lull, or the run up to Christmas. (People are generally more interested in moving when they are considering school applications in the autumn, or in that fresh burst of enthusiasm that comes with the new yea).
There could be a number of other reasons why your house isn’t selling too, but more often than not it is down to over-optimistic pricing. It’s not easy to know how to price your house, but if other similar local properties are selling well, and potential buyers have no interest in yours, then chances are it’s overpriced.
After you have been on the market, unsuccessfully, for a while you will inevitably have to drop the price of your home to attract a buyer. There are many different schools of thought on when to reduce your house price, or how long on the market before price reduction is needed, but for us, if you haven't had any decent viewings in 4-6 weeks, it's time to reduce.
As a rule of thumb, you should probably reduce by no less than £5,000, or perhaps by as much as £10,000 if your property is a higher-value one. (For example, a £5,000 reduction makes little difference to a property worth over £250,000).
This price reduction is the first chip away at that original valuation that you were so excited about, but it is far from the last.
Drop #2: The offer
Eventually, after you've reduced your price you'll hopefully attract a buyer.
Even if you have dropped your asking price, chances are you will still receive an offer that is less than you hoped for. In a report from 2018, it was found that no fewer than 86% of home sales were completed at less than the asking price according to the National Association of Estate Agents. (That’s seven out of every eight homes!)
Based on our experience in property, this is the case year-in, year-out.
Rightmove estimates that the average reduction is around £10,000, with offer-to-asking price differences rising from 2.8% lower to 3.3% lower in the last two years. Zoopla recently put the figure at 3.86%, with some areas, such as Bradford (6.32%), Preston (6.24%) and Swansea (5.87%) reporting much higher discrepancies.
Why? Because everyone wants to do a deal, and no one expects to pay the full asking price unless the property is in big demand in a sought-after area. The fact that you have already reduced the price is irrelevant to most buyers, and they will start their negotiations at the current asking price and work down from there.
Drop #3: The Survey
Eventually you'll attract a buyer, but as we discussed in our recent article about down-valuations, even if you have agreed a price with a buyer you're still not out of the woods. They will need to have a survey done on your home.
If your home is immaculate, up to date and has no problems whatsoever, then you will probably be fine. But let’s face it, not many homes are like that.
Increasingly, the official valuers for the banks and building societies are valuing homes at less than the agreed offer. This is true now more than ever - as COVID adds to the uncertainty in the world, banks (and surveyors) become more risk-averse.
This means most surveys will find something that needs putting right. These are usually things you have put up with quite happily, but the new owners want fixing. The older your property, the more these repairs and refurbishments are likely to cost.
If your buyer is hoping to complete their purchase with a mortgage, you may have to reduce your price yet again to meet the new valuation, or at least meet them half way. Of course, you can stick to your original agreement, but if the buyer doesn’t have the extra cash they need to make up the difference, then you could lose your sale altogether.
This chips away further at your original asking price.
Drop after drop after drop
By the time you actually complete the sale on your home, you could be a long way away from the original asking price that you were so excited about. You will likely have reduced the asking price by 5-10% to attract a buyer, negotiated down from there to agree a sale, and then reduce again if the mortgage surveyor throws a spanner in the works.
Even then, you still might not get this price. Some buyers may find other reasons to reduce the price during the process (this is called "Gazundering"). How does it work? In a nutshell, the buyer may contact the agent in the run up to completion and drop their offer. Why? Because the sale is so long and drawn out that they know many sellers would accept a lower price just to get the sale done and to avoid starting again from scratch. It's a horrible, unethical, and purely opportunistic move, but it will often work for them.
All in all, it can be a very demoralising situation, made worse by the long, drawn out nature of the process that leaves you feeling helpless as you watch the price drop and drop again.
Remember the fees too...
Even when you finally do manage to complete the sale, you’ll still have to part with another 1-2% of the sale price to pay your estate agents, plus you’ll have significant legal fees to pay for your conveyancing (usually around £1,000).
An alternative... One price, no haggling, no hassle
When you consider all the different ways that your original asking price can be reduced, it may start to make sense to consider other options. Especially if you've been on market a long time already and are still stuck at square one waiting for viewings.
One other option is selling your house fast to a company like ourselves. We're prompt, professional property purchasers, and although we offer less than the full market value, the figure is guaranteed. This means you won’t suffer the kind of erosion and constant set-backs that the open market often brings.
On average, we'll offer around 80-85% of the value of the property. This is quite a hit - but when you add up all the reductions and other costs discussed above, it doesn’t seem such a tough deal.
See examples here: How much do we offer.
Once you have reduced your price to generate interest, paid for survey repairs and then accepted a lower offer, the difference becomes much less.
Better still, with Yes Homebuyers there are no estate agent fees to pay, and we'll pay your legal fees for you, making the price differential even smaller.
A hassle-free sale
We not only offer a quick and easy move, but we also deliver great service too.
Rather than waiting for months on the open market (and having to perpetually keep your home viewer-friendly), you can complete the sale as soon as you need to. Our valuation process usually only takes 2-3 days, meaning you’ll usually get an offer within 2-3 days. This means you could agree a sale this week - and complete on your sale within 2-3 weeks after that.
A prompt, professional sale can get you moving sooner, avoiding problems with housing chains, slow solicitors and a myriad of other issues that can slow you down. It frees you up to move on with your life and can mean the difference between getting the home of your dreams and watching it go to someone else as you sit waiting to sell.
Remove the uncertainty
From the initial estate agent’s valuation to the final (and usually far lower) net price, selling a home can be fraught with uncertainties and heartache. But you can avoid all of this with one quick call, giving you a prompt, professional sale and money in the bank within as little as 2-3 weeks.
It may not be right for everyone, but it is turning out to be a great option for more and more people who are fed up of the long waits and non-stop negotiations on the open market.
If you have dropped the asking price but are still having trouble selling we could help. Choosing Yes Homebuyers means you can sell your house fast. Click that link to read more, or hit one of those big blue "Get An Offer" buttons to get in touch now. We look forward to hearing from you.
Click a tag to see related articles, FAQs, and reviews
About Yes Homebuyers
We can purchase your home from you directly, giving you the easiest, fastest home sale possible.
Contact us for a free valuation and offer. We can buy your home in as little as 14 days.Get an offer
Get our best home sale tips for free
Insider advice and secrets
Ideas for increasing your home's value
Keep up-to-date with local trends
You can unsubscribe at any time.
Kept in touch constantly!
"Excellent service, would definitely recommend. Couldn’t fault the service kept in touch constantly - very helpful. Never used a service like this before but would use this company again."
Nothing has been too much trouble!
Having dealt with you over the last few months nothing has been of to much trouble and you are always so friendly and nice. I would definitely recommend.
Would highly recommend!
"Fantastic from start to finish. The team was excellent and I'd highly recommend your company to anyone."