Why most houses don't sell

Richard_Watters

As someone involved in the property industry I see a lot of people who are bemoaning the fact that their property has been on the market for months - or longer - with little interest from potential Buyers. Invariably they blame this on "the market".

"The market" is tough, of that there's no doubt. But there is a market nevertheless. So if a house isn't selling it's down to one reason and one reason only - the price.

The reason so many houses are over-priced is because most Estate Agents over-price them (there are exceptions, but not many, in my experience). This is because their aim is simply to get as many listings as possible. Once they have a listing (and often, a 3 or 6 month contract) they will say how tough it is, and eventually either you or they will suggest reducing the price to the real value.

Here's a real example I came across last week:

Detached house in N. Yorkshire on the market at £345,000.

Was last sold, in 2006, at £285,000. Was in average condition then, has been tidied up since, but nothing special. Based on what's happened to house prices since (about 16% down in this area) there is absolutely no reason why this property should be marketed at a higher price than was paid for it back then.

The vendors believe that they got a bargain when they bought it (they didn't, the price paid just reflected the condition) and the improvements they've made justify the marketing price. Of course the Estate Agent was only too happy to humour them to get the listing.

Result: House has been on the market for 2 months with no viewings. The owners will eventually give up and decide not to move, or have to reduce the asking price to below £300,000 to have any chance of selling.

If I could give one tip to people who want to sell a property it is to work out the value of the property yourself (lot's of online tools available for this) and ask Estate Agents for realistic valuations to sell the property without telling them what how much you think it's worth. Then use an Agent who gives an honest valuation. Might take you a while to find one though!

googler

Richard_Watters wrote: »

The reason so many houses are over-priced is because most Estate Agents over-price them (there are exceptions, but not many, in my experience).

What's the extent of your 'experience'?

How many out of the 'most' EAs to which you refer have you spoken to, dealt with, or monitored?

Your thread title is why 'most' houses don't sell - what's your source for the numbers? What are the numbers? How many sell, how many don't?

ognum

can you reference your figures please or are they your speculation?

Paully232000

I have had recent valuations on our house as we are going to put it on the market very soon, and I have found that the EA valuations are in the region of what I thought, and what other houses have sold for in the local area.
I have asked each of them what they would market it at before telling them what I thought/found and they have all been near enough the same price and within a stones throw of what i thought.

Not all EAs overprice houses, based on my albeit limited, experience.

shortchanged_2

I agree with what the OP is saying.

There are loads of properties that are overpriced and therefore don't sell.
Properties that are priced realistically will sell.

A market is what it is. Fact, markets change.

We are now not in a boom period (apart from the well known SE) so why are many people whinging when their overpriced properties (in the current market climate) are not selling?

We don't currently have the loose lending of the previous decade, no liar loans, drastically reduced IO mortgages, more sensible income multiples and larger deposit requirements.

Why don't vendors sit and think 'how are people actually going to raise the funds to pay for my ridiculously priced house' instead of just saying 'why won't my property sell?'

marshall666

I think it's fair to say that if you aren't getting viewings, it's the price.

If you're getting viewings, and no offers, the house is a let down in comparison to the listing.

kwmlondon

Harsh, but fair.

Richard_Watters

In response to the questions about my source/reference I don't have any specific data. I have access to Rightmove Plus which shows how long specific properties have been on the market and it's scary how many have been on for months and even years. If you have Firefox and download Property Bee software you can see the history of a listed property on Rightmove.

What I do have is plenty of experience. I've bought and sold houses for the last 20 years (over 50 in total) and the practices I refer to have always been prevalent. When the market is rising it's less apparent because after a few months an over-priced property becomes a realistically priced one due to house price inflation. When the market is flat like it is now (except in London) it's more obvious.

As I said, there are exceptions and I know good Agents who value properties realistically. However most know that the best way to get listings is to tell people what they want to hear. And people want to hear that their property is worth what they hope it is.

dtsazza

ognum wrote: »

can you reference your figures please or are they your speculation?

I'd go further than Richard Watters, and confidently state that every house that doesn't sell, is due to being too expensive.

For anything offered up for sale (included a house), there is a price level for each potential buyer. Below this level, they will agree to buy it; above this level, they won't.

If someone sees your listing and doesn't view, it is because they consider that the likely quality of the place is worth less to them than the asking price. If someone views a house and doesn't offer, it's again because their price level is below the asking price.


When it comes down to it, if you listed your house for £1 you would have it sold by the end of the day. Any house that doesn't sell is due to its price:quality ratio being too high.

(Sometimes the rational action may not be to lower the price - it may be to do £1000 of work that makes that house £5000 more attractive in the eyes of buyers. But this doesn't invalidate my point - in its pre-work state, people were not willing to pay the required price. Had it been priced sufficiently lower, they would have bought.)

spirit

If that was the case then why does Phil Spencer in most cases, get the sellers to declutter/paint/tidy etc

why not just reduce the price based on your 'findings'.

Dan-Dan

spirit wrote: »

If that was the case then why does Phil Spencer in most cases, get the sellers to declutter/paint/tidy etc

why not just reduce the price based on your 'findings'.

To be fair , in a lot of the episodeds , price is usually a factor as well , plus , half the time , we never find out if it ever actually sold or not!