Mind the reality gap

If you own a property, you’ll want it to be worth as much as possible when it comes to selling. To confirm its value, you’ll probably invite three estate agents in to give their opinion and it’s always tempting to plump for the highest figure.

Bargains for buyers?

In today’s market, however, what you think your home is worth may not always be the price a buyer is willing to pay. In fact, research by Zoopla earlier in 2023 found many sellers have been forced to accept lower offers in order to secure a sale.

The property portal worked out that the average discount on the advertised price given to purchasers was £14,100, which is equivalent to 4.5% knocked off the starting value. It marks a return to buyers bartering and negotiating with vendors over the price they are willing to pay.

Pandemic highs have passed

The 4.5% discount highlights the disparity between what a seller thinks their home will sell for and where today’s property values are sitting. Since the pandemic highs, something the industry calls a ‘reality gap’ has emerged – a situation where a sellers’ expectations have failed to adjust to 2023’s market. Today, it’s not as common for sellers to achieve above the asking as there is a greater choice of homes for sale and fewer buyers. Additionally, gazundering – when a buyer reduces their offer just before exchange - has made a reappearance, as we discuss in this blog.

Adjusting expectations

We must point out that many estate agents are accurate in their valuing and do take into account current market conditions. Instead, some listings are won on the condition that the seller influences the asking price – usually because they feel their property has been undervalued.

Just like High Street agents, we encounter some sellers who want to test the market at an inflated value, despite professional advice. Here at Move Places, we always ask sellers how quickly they want to move and what the value on any onward purchase is. These two critical pieces of information will help us value the property for an outcome that meets expectations.

Realistic is the new sales strategy

For a property to sell for as close to the advertised price as possible, the asking figure must be realistic enough to generate interest, drive traffic to an online listing, encourage viewings and stimulate sensible offers. Too high an asking price and purchasers will bypass the property in favour of something similar that’s cheaper or, as Zoopla’s figures indicate, some serious price reductions will result.

When working with a seller we always advise:

• Price to sell, using local demand, current values and the wider mortgage market to settle on an achievaeble value.
• Take condition into account, acknowledging whether the property needs modernisation or major remedial work.
• Factor in location, establishing whether it’s an in-demand area.
• Think about timescales, considering a higher value may lead to a longer period of time on the market.

Move Places can offer a quicker property sale for homeowners and landlords, thanks to its refreshing and honest approach to pricing and promotion. Our agents will do their best to manage seller expectations in line with their moving goals, avoiding the ‘reality gap’ in the process.

Move Places lists its homes for sale on over 20 national and international portals, including Rightmove, Zoopla and OnTheMarket. We use the very latest real time sales data to price properties competitively, and work with a network of property investors and developers to reach the biggest pool of purchasers as possible.

While we believe honest valuations from the outset are the best way to avoid reduced-value offers and protracted time spent on the market, we will always give sellers complete control of their asking price and marketing strategy.

Our agents are available to talk to in person, on the phone or over email. Get in touch and we can provide you with a free, no-obligation valuation and discuss a bespoke marketing package for your property. Don’t forget, we offer guaranteed sales via our cash buying sister company, Open Property Group.