When to reduce a sale price - NW Lancashire

surreyworries

Possibly a piece of string question...our family house went on the market four weeks ago. We researched loads of agents, got it down to three, and then picked our current one. On reflection, we were crazy to be rushed into putting it on the market during the school holidays, but hey ho, that time has gone.

They valued the property at £600k - £650k. It's a five bed detatched property in need of overhaul (est £200k as needs rewiring, central heating...).

After 22 days on the market (including RightMove, in the agency window, one social media post, emailing to their own matches...), the agency started suggesting that we drop the price, and saying that this is most effective within the first four weeks of it going on the market (which we're now just on the cusp of). It's had one viewing so far, and the viewer was put off by an external factor some distance away that we have no control over. No negative feedback on the price that we've been told about.

We don't think four-five weeks is long enough to try to sell the property at its original asking price, because there's no going back from reducing the price.

Help - thoughts?

1/ Does anyone have any knowledge of the NW Lancashire market? Is this typical...?
2/ Are people waiting for the budget to come out...?
3/ Should we drop the price at this early stage and accept that it was never worth the higher value?
4/ If we were to go with another agent at some point, could they return to the high value again?

 We are not in an urgent urgent hurry to sell, but wouldn't want to still be here in eg, a year.

Albermarle

NW Lancashire is a big area, but mostly one where this type of house would be very much at the expensive end, unlike if it was in Surrey for example.
So I would guess there will be a limited pool of potential buyers, and of that small pool, maybe many would be put off by the extensive repairs/renovations needed. £200K of work is a LOT and must be a lot more than just rewiring and  new heating. Presumably the new buyers could look forward to many, many months of significant disruption. 
Maybe it would be more suitable for a developer/builder? So maybe think about an auction as another possibility if things do not pregress.

surreyworries

@Albermarle - auction! That's a good thought, we hadn't even considered auctions for some reason. All this stuff seems so hard and uphill, especially when you only have to get to grips with it once or twice in a lifetime. 

youth_leader

My house was also valued at £600K but needed a lot of work ... so the agent suggested I market at £500K.  After three months and constant 'too much work' feedback she recommended I drop to £450K.  After three months of the same 'too much work' feedback I changed agent and marketed at OIRO £400K, which I don't recommend at all. 

At that price I had an offer of £355K and he then had his L3 survey.  When he'd seen the results offered me £285K.  Absolutely ridiculous, he said if I had the roof, the damp, and the floorboards done his mortgage lender would 'inspect my work' to see if it was satisfactory and they 'might' agree to lend him £330K. 

It was a farce but I couldn't cope with any more.  I made a regrettable decision by going to auction and the same man offered the most, I had to accept and settle for peace of mind.  The auction happened on line as lockdown happened that week, 23 March 2020, and I only got £275K.  The small amount changed my life plans completely,  I can never afford to go home to the south.  

gwynlas

Did you actually have three agents to give you valuations as this is unclear?

if fairly priced initially it is pointless dropping as buyers can and do make offers.

A house requiring rewiring and from what you are suggesting a major overhaul will attract very few viewings as people do not have the money upfront to carry out work.They will be intent on reducing percentage of loan to valuation in order to get good mortgage rate.

What does a £850k budget get you in comparison?

Upcoming budget will make people wary.

it is possibly not the best time to be selling a large family house as they will be looking at schuul catchment areas for next September.

Albermarle

surreyworries said:

@Albermarle - auction! That's a good thought, we hadn't even considered auctions for some reason. All this stuff seems so hard and uphill, especially when you only have to get to grips with it once or twice in a lifetime. 

However auctions are not for the unwary. If you ever do decide to go down this route then;
Firstly only go for a traditional auction ( like you see on the TV). There is a 'modern method of auction promoted by some estate agents, but best avoided.
Even with a traditional auction you will need to read carefully about the procedure and potential pitfalls.

UnsureAboutthis

OK

I'll ask:

What were the other EA's valuations? What was your valaution?

If this agent's valuation was higher than the others, then they could have just priced it to tie you in as is often the case IMO.

Did you get three valuation prices from each agent, ie sell quickly, sell within usual times for the areas/type of property, or takes longer to sell as you are looking at a higher price, and/or the property is rare.

When valuing a property, even comparing with others a minute's walk away from yours, there are many differences.
EG - school ecathcment, parking, is the property in a vulnerable spot, is it next to an undesirable location/property/shop, is the raod there narrow and the other bits of the road are wider, does your property have a better view, is your garden bigger/better,  what scope is there for your place.  As you can see, many variables plus
how many are interested in your place.

What is the property like next door and/or is yours the best/most expensive on the road or appears to be  - take all of this into account and decide.


Note. Read your EA's contract carefully about what if you decide to move to another EA afte the agreementreement with them has ended as depending on the contract, some may still want a fee if they introduced the buyer, even though you sold via another EA.

surreyworries

Thanks so much all, and I'm sorry to read your story @youth_leader, that sounds really tough. Three estate agents:

1) 600k - 675k
2) 675k
3) 600k-650k

I went for 1), at the median of £650k, so I don't think I've gone for the very top of the market. I didn't negotiate on agent fees, saying I wanted them to put the most into selling it, rather than paying less. That's a great tip @UnsureAboutthis re changing agent, I'd forgotten about that.

The house is a rural farmhouse, three neighbours within about a 200m radius, private road, 1 acre of mature gardens. It's never been on the market before.

UnsureAboutthis

surreyworries said:

Thanks so much all, and I'm sorry to read your story @youth_leader, that sounds really tough. Three estate agents:

1) 600k - 675k
2) 675k
3) 600k-650k

I went for 1), at the median of £650k, so I don't think I've gone for the very top of the market. I didn't negotiate on agent fees, saying I wanted them to put the most into selling it, rather than paying less. That's a great tip @UnsureAboutthis re changing agent, I'd forgotten about that.

The house is a rural farmhouse, three neighbours within about a 200m radius, private road, 1 acre of mature gardens. It's never been on the market before.

Thanks.
From the post, it looks as though the type of buyer you are looking for is going to be a hit/miss thing, IE,
not many people would want to buy in a location like that. However, with working from home still going strong and people moving out of towns and cities, there is hope. 

You may attract a developer's interest, but they often pay less.

I've just noted your "are people waiting for the budget?" I guess many BTL developers are waiting for that, along with many others.

Your proerty won't be looking at the typical buyers, so you have a smaller number of people looking at your place but it only takes one to buy.

I'm guessing schools are a distance and only via car and narrow lanes, which get clogged up with the snow - if my guess is right, then the winter period may be a harder sell.

Have you considered an auction?  If you decide to go down that route - always check in detail their costs if sold and costs if remain unsold, and reserve prices. I watch a lot of Homes Under The Hammer - and at times the properties sold in London, often go for the preice IMO of what they may have sold via an EA, but, I've never bought or sold via auction, so check prices and T&C's.

From what I have read, if you get the right buyer, you may get the 600k+ but the type of buyer who is going to buy, may be few and far between. 

The one interested party proves my gut feeling about your property having a niche market appeal.

See how it goes after the budget and consider your options then, but winter will be almost here and very dark and long nights, not ideal to sell a property in your type of location IMO

Just an idea, why not try a new price, EG, 'offers over 595k"    It may generate more interest and once they come and see, you never know and it's up to you how much you sell it for.


Good luck.

youth_leader

Ah sounds wonderful! 

If you do go to auction, my house was a listed II building so a bit different.  I'd had a L3 survey done and knew what needed doing, I couldn't afford it, and it is a criminal act to allow a LII to fall into disrepair. 

I went with Pattinsons and paid an initial £795.00 to go into the 'catalogue'. I then paid my solicitor £1200 to do the legal pack.  I then had to have a few jobs done in the house ready for the 'sale' - chimney sweep (seven chimneys, 4 in use), boiler service etc.  I broke a window bashing it with the fairy lights which was an unexpected repair, I think I spent about £1K.  I also had to order in wood/coal/kindling as the viewing agents wanted the fires lit.

The person that came along to 'value' the house said I should achieve at least £390K depending on competition.  She recommended a guide price of £340K and said if I wanted to increase it at a later date, I'd have to pay, I had to decide on the spot.

I went into the catalogue the month before the auction.  Masses of people viewed, all at the same time.  I was renting a cottage up the road and saw all of the cars.  I was quite cross as it was only a young viewing agent and as a wet February not everyone was wiping their feet, I had a lot of mud traipsed in on the Chinese.

On the day of the auction, on line, I got two bids - one for £200K, one for £230K.  Nowhere near 'the reserve'.   

I was devastated - the few people I'd spoken to that had sold their parent's places at auction had said they'd 'made money'.  Not me.  The auction house rang me and said they'd approach all of the viewers the next day to 'close' the deal.  The next day they rang me - £240K from the on line bidder - and £275K from the horrible developer that had tried to buy through the EA.  My husband had worked long long hours to pay the mortgage on the house, I was very upset, but the roofs needed doing and I didn't have the £30K spare.  I had to accept. 

What I hadn't done was the maths - for a sale of £275K I paid commission of £6,600 to the auction house.  A very expensive way to sell.

Bigphil1474

OP, you've put your house up for sale at a time you acknowledge isn't good, marketed at a price which 3 independent estate agents have said is fair. If the price wasn't right 4 weeks ago, why did the EA say to market it at that price? Personally, I wouldn't drop the price in the first 2 months given it's a niche property. You need to give it opportunity to be picked up by the right buyer. If you've got a year to sell, and the best time to sell will be early spring onwards, try a stepped approach IMO. 

£200k of work - is that based on a proper assessment or your guessing? If it's accurate, then that's a lot of work, sounds like it's falling down. Should you still be living there? If it's guess work, why not get your own survey done and then you'll know. Sounds overly pessimistic to me. Rewire - often unnecessary, just upgraded consumer units, but not bank breaking. Central heating - complete replacement, or upgrade radiators? etc.