According to Rightmove data reviewed this week 25% less homes have come to the market in our area in the first two months of 2020 compared to the same period in 2019. This is good news for sellers as using the basic rule of supply and demand means less choice for buyers and a higher chance of achieving a sale within their desired timeframe. But what else does it mean?
Another way of looking at it is that there are a quarter less properties available for Estate Agents in the area to sell which means they’ll be very eager to list those who are looking to move. This, believe it or not can create a problem for the vendor. Agents desperate for stock often fall into the trap of either overvaluing or under-cutting their competitors on fee. Is that a good thing for the seller?
Maybe on face value an agent being particularly enthusiastic about achieving a much higher price than their competitors seems great, but is it? Is their positivity based on what is actually happening in the market or unfounded optimism with a view to securing a listing for their company at any cost? They can always bring the price down later.. can’t they? It is essential an agent provides evidence of where their valuation has come from. There are multiple means to bring together relevant comparable properties now so there is no excuse for them not to support the conversation with fact rather than bluster.
The average person on the street could be forgiven for falling into the trap – the agent is telling you they can maximise the profit on your biggest asset. Perhaps check what percentage of their stock is sold online and their reviews, before making the decision – that is the best indicator of their true abilities.
The first four weeks of marketing is crucial. The property is fresh and exciting. The buyers with their lack of choice have been waiting to see it, but they aren’t dummies – they know what property is worth – there is so much information available online to them as well as us. In this period the property is exposed on various websites and to the portals own mailing lists, the agent should hit their own list, signage will go up, press advertising, social media, phone calls to buyers etc. If the property is overpriced it won’t get the desired level of interest from a very captive market and the boat will have been missed. If it runs to 7-8 weeks without a sale, the price is likely to need to be reviewed. Is this the right agent to deal with the next phase of marketing?
The fee issue is an interesting one. Again on face value, getting ‘a deal’ with an agent is great but how easy were the negotiations? Did they seem desperate? Did they roll over easily in negotiations and if they did, would you really want someone who does that negotiating the sale on your behalf?
My advice is to choose an agent who believes enough in their service to negotiate hard on their fee and to follow your gut feeling on the valuations, do your own research into their track record (and online reviews) and don’t be frightened to ask tough questions of them from the off. A good agent will welcome the discussion.
John Harrison is the Managing Director of Houseclub Estate Agents, Gold Winners for the North West at the ESTAs Estate Agent of the Year Awards in 2017, 2018 and 2019. For advice on buying or selling in Lancaster, Morecambe, Carnforth and surrounding contact John or a member of his team on 01524 771888.