I’ve been spending a good long time on Rightmove today, and boy have I had some giggles! Lots more photos found for my Shocking Shots album on Facebook so watch out for those, but there was one property that caught my eye for all the wrong reasons.
The image snip I’ve copied here (from the PropertyBee toolbar) shows a house that originally went on the market in August 2012 at £124,500, then 4 months later it embarked upon a rather unexciting rollercoaster of a price reduction. 6 months and 6 price changes painfully slowly delivered this house to its current price of £116,000. That’s a total price drop of only £8,500 and that’s equivalent to just 6.8%.
I have two problems with this price reduction strategy, if indeed it was actually a strategy and not just an oft-repeated stab in the dark.
1: a price drop of £8,500 or just 6.8% is just not worth it in today’s market. Most buyers are offering 10% less than the asking price anyway, so a reduction of less than 10% is unlikely to make any real difference (unless you’re around a landmark price for example the £125k or £250k stamp duty thresholds, in which case dropping by a couple of thousand to appear below these limits is a very good idea). If you’re going to change the price, find out what the market really will pay for your house and then change the price just once, to that value. Get it right and you’ll stand a far better chance of selling.
2: repeatedly dropping the price by marginal amounts sends negative messages to the market, and to be honest I think it makes you as a seller look a bit silly. You’re telling the market that you’re not really sure about your price to start with; you don’t really know what price it should be listed at so you’re just having a go. If your agent doesn’t protect you well enough, a savvy buyer might just cotton on to the fact that you don’t know what you’re doing and you’re open to reductions, and could well get themselves a right bargain at your expense.
The overall message of this post is *please* price your house correctly, right from the start. And if you’ve been on the market for a while and are considering a price reduction, find out what the price really should be and move to that. Change it once, to the right price, and that’ll look far better than insignificant repeated drops that mean nothing and undermine your credibility.
Maths lesson over :) Carry on!