Dan Gooding of Rex Gooding Town & Country Homes writes and talks about the West Bridgford property market.
Since recording this property market update at the end of October, we have had the news of the interest rate increase to 0.5%. While not a significant increase, any interest rate rise does not help buyer confidence.
When we talk about a lack of confidence in the property market, some people think this only refers to buyers, which is wrong. Sellers equally suffer a lack of confidence and play an equal part in the slowdown of the property market. If a seller feels it is not a good time to sell, because they will not get the best possible price, they put things on hold, giving buyers even more reason to hold off due to a lack of stock. The cycle begins to slow even more.
Watch video below:
This causes big problems in small towns like West Bridgford, that have a huge amount of Estate Agents, seventeen in total!
What happens as the market starts to slow down, is that a lot of Estate Agents are competing over only a few potential instructions and this leads some Agents, out of sheer desperation, to start to over value in order to win the instruction. A couple of valuations I have personally been out to in the last few weeks, have come on the market well over 20% above my recommended Guide Price.
In a slightly trickier market, it is more important than ever to be accurate with the price and clever about the marketing, but the big boys are paid on what they “get on” not “what they sell”.
I can tell you exactly what will happen with the properties that have come on for over 20% higher than what I recommended. The Agent will be quickly recommending a reduction, then a further reduction, but now 3 months have passed, and no one wants to come and view it as it has been on market for so long and there must be something wrong with it. The poor Vendor accepts an offer, much lower than they would like, they were unable leave their Agent and instruct another, even though they were not happy, because they had unwittingly signed up to a long contract with an equally long notice period. The Agent that gave them good, honest advice, and ultimately would have got them more money and a quicker sale if they had they gone on with them, also lost out due to the tactics of an unscrupulous Agent.
A word of advice when choosing an Agent. If your house is on the market and you do not have any viewings, it is highly unlikely that another Agent HAS a buyer. When getting valuations of your property with a view to selling, you will have a pretty good idea of the value, even if you do not think you do. It is the most expensive thing you own, you have probably lived there for some time and seen other houses on the road or in your area sell. Just because the man or lady from a big national firm promises you they can get £50,000 more than the other Agents, does not mean it’s true. Remember they get paid for what they get on, not how quickly it sells. If it takes 6 months to sell and for 100k less, it’s all the same to them!
The best advice is to get several valuations and to get a good mix of independents and nationals, in order to build a clear picture of what the value of your home is and where to set the Guide Price. Although the temptation may be to go with the highest, this is unlikely to be the most realistic.