Asking Price Vs Final Selling Price – and don’t forget Price Growth Rate!.
If you are currently trying to sell a house in London you are likely to be aware of the ongoing price growth slowdown – now at its fastest downhill pace since 2009, say the Office of National Statistics (ONS). Latest reports indicate that across the UK, properties are selling, on average, at 3.7 per cent below asking price. In some cases, homeowners should relook at their asking price. They should also speak with their agent to get a house valuation and a “reality check” on local market selling prices as opposed to simply scanning online sites for general trends.
However, it’s also important to understand the relative value of a price reduction. Final selling price figures should also be compared against the growth rate in the different regional areas. In Liverpool, for example, the asking price has fallen by an average 4.6 per cent, yet the average yearly price growth is 7.2 per cent. The marketplace in Redbridge borough has continued to remain buoyant, fuelled by the ongoing area investment and redevelopment, and closely linked to the arrival of Crossrail/Elizabeth Line due in 2019.
Supply and demand usually dictates local market conditions
Over the last 12 months, the average selling price of a terraced house in Redbridge fell by 8.3 per cent below the initial asking price from £422,255 to £387,455. Approximately during the same period, the average selling price for a terraced house had risen by 3 per cent from £376,442. At the same time the average selling price for a detached house increased by a whopping 49 per cent from £546,000 to £815,738 compared to a reduced price growth of 6.7 per cent.
Supply and demand usually dictates local market conditions, which can vary from region to region and even from borough to borough. The ability to sell your house within the price range and time-frame you need often comes down to how many properties are sold or under offer in your area, and how many are still available.
Estate agent role in making sure a property is properly marketed
Currently in Redbridge borough, there are just over 3,400 properties for sale with an average price of £438,900. In May 2018, a total of 410 properties were sold at an average price of £393,000, compared to May 2017 where 497 properties were sold at an average price of £393,820. Does the fall in the number of properties sold while the selling price remains hardly changed reflect a more resilient price growth rate in Redbridge?
The skill, experience and knowledge of the estate agent should also play a significant role in making sure a property is properly advertised and marketed online, and offline. Reducing the asking price to attract faster interest always needs to be carefully considered in each and very case. However, a property seen to be “on the market” for a long time will not reflect well for either agent or seller, especially if the price is seen to drop again.
In August 2018, the average time a property can be on the market in Redbridge before it sells is 129 days compared to 118 days during the same month in 2017. There can be an issue if you are in a
chain or if reducing the asking price will impact the minimum amount needed for the property you intend to purchase.
A good agent should keep you updated…
Placing your property with several agents to attract more buyers and hopefully, speed up the process may not always be the answer. Buyers can often assume that a property placed with multiple agents indicates a greater urgency to sell. The added incentive for each agent to secure the sale and beat the competition could mean they will simply encourage you to accept a much lower offer than normal.
Your decision to accept or reject an offer is always likely to involve several competing factors. Will price growth continue to slow and will your property be affected, even if you are in a desirable area and located close by to a Crossrail station revamp? A good agent should keep you updated…
