Send For The Cavalry!

Send For The Cavalry!

Highly respected Sunday Times journalist, Ruth Bloomfield, was behind the recent article entitled, Help!. I can’t sell my house. Apparently, “all over the country, properties are stuck on the market, their owners running out of hope and ideas”.

Four homeowners feature. All unable to sell within time-frames ranging from four months, all the way to two years and 10 months. The blame, opines Ruth,  lies squarely at the feet of a rise in stamp duty and the Blame it on Brexit cliché. ” From stage dressing to serious home improvements to painful price cuts or open days, many owners- and indeed readers- have tried everything they can to shift their homes”

An interesting perspective, with mention of some dubious solutions. As you might imagine, I have a different point of view.

The market is what it is. Unfortunate. But all markets have peaks and troughs and the blame for not selling, at either end, is not the fault of the market. Although uncertainty will create some problems, the inability to sell a home is primarily either the fault of the estate agency, or the property itself. The agency and the owner have to adapt to the market. Not expect what worked last year will still apply this year.

Generally, if a home has received numerous viewings but no offers, it is not the fault of the estate agency. If, however, there have been no viewings, no offers and no interest, that scenario can be blamed on the estate agency. And to a lesser degree, on the vendor who chose that estate agency.

Let’s take the first example in the article. The Old Chapel, Clayton West, West Yorkshire. Time on the market – two years and six months. No viewings & no offers. Original asking price (back in July 2014) was £320,000.  Not something that can be blamed on Brexit (23rd June 2016). Or on S.D.L.T (stamp duty land tax) which changed, for the better in this case, on April 1st 2016.  No viewings & no offers suggests that the estate agency shoulders much of the blame.

The fact that the owners have instructed four separate estate agencies and that the asking price has fallen four times over the years lends support to this argument.The owners have now appointed a fresh agency which has increased the asking price by £25,000 over and above the £250,000 previous price. As an interested buyer, my first offer would consequently be under £250,000, not in the region of £275,000.  Just to make matters worse, the agency hosted an ‘open weekend’ to try to drum up interest.  My views on any ‘open day’ are well documented. The number of ‘interested’ buyers can usually be counted on one hand and the agency benefits from growing the size of their database.  Needless to say, despite “balloons strung around the door, the estate agent spent the time watching television with the owners.  Not a single person came”.  A more cynical person might have suggested the agent spend the time explaining more about their agency, about the current market conditions, or about why some agents over-value property to gain the instruction!

Without the benefit of knowing how previous agencies marketed the house, criticism is difficult. However, in this day and age of online browsing, it is vital from a vendors perspective to understand where the property is being advertised, how many online viewings, what the CTR (click through rate) has been, how impressive is the main photo on the portals such as Rightmove etc?. On a more practical level, what % of registered buyers on the agency database might this property suit?

What has been described in the article as “some shortcomings” suggests that these are negative aspects to the property. On a main road! Let me tell you of the shortcomings of living in a cul-de-sac, where neighbors enquire and children do play. No garage and a terrace rather than a tiresome garden will appeal to certain buyers. It did to John & Pauline, the owners. The estate agency needs to better understand the potential purchaser.  And get to work!

The second example is a splendid ‘country pile’, MilHanger, Thursley, Surrey.  Time on the market. Two years & ten months. Thirty viewings suggests that this attractive property would sell fairly quickly, but apparently not. A price reduction from £8 million to £6.25 million after some time on the market had not done the trick. In this instance, the agents might conceivably have got it wrong on the valuation since “when the property went on the market in 2014, the prime country market was already slow and sticky”.

A sliding scale agency fee might have better focused their valuation, since as the house reduces in price, so does the agency fee.  Hindsight is a wonderful thing and the advice to “keep waiting it out” should be better qualified.

The Old Cottage, Weston Patrick, Hampshire, by contrast has only been on the market for four and a half months. Not long in comparison to the other homes featured. There has also been “a healthy number of viewings”. The agents told the vendors that at least six offers would have resulted if the property had not had a low kitchen ceiling. So initially it seems that the property, rather than the agents may be at fault.

My take on this?  The current vendors loved the house, warts and all. Enough to buy it four years ago. Other buyers will feel the same. It’s just a matter of finding them. The article goes on to say that a property search on Rightmove and Zoopla failed to find the listing for this house. A clear cause for concern that the agencies must address immediately. Another factor to consider is the listing price. Originally priced at £800,000, the price reduction of £10,000 to £790,000 might seem, at first, psychologically significant. However,  when the property is uploaded to Rightmove, it will attract only buyers that have a maximum price of up to £800,000. It will not show up on search results of those buyers that have a minimum purchase price of £800,000+ . So, the price reduction has actually limited the exposure the property receives. Not a good sign.

Since the vendors are rightly resisting pressure from the agents to reduce to £750,000, in this instance I feel the blame rests with the agents, not the economy, and not the vendors. Better marketing of the property is required. And better sales negotiation. A job at which traditional high-street estate agents should excel.

The Old Vicarage, Glentworth, Lincolnshire.  On the market for one year and eight months. Around a dozen viewings and two offers. Both of which failed to complete. Originally on the market in 2014 at £750,000, additional work was carried out in 2016 at a cost of £25,000.  The house was re-marketed at £775,000. And here I am immediately at odds with the agency for advising the vendors to carry out expensive work that has not resulted in a sale. The buyers were made aware of concerns about the roof that had prompted the first-time buyer to withdraw the offer. A serious buyer would have leveraged that situation to their advantage and possibly closed the sale at a lower price, rather than pull out.  A first-time buyer is, as the vendors point out, probably not the right profile for a Georgian rectory.

And the final brickbat for this property goes to the agency for marketing at the new price of £699,950. Seriously! See previous comments about the need to market any property at a round figure. No, no, no.   Not £699.950. Goodbye to all those buyers searching the web for a property in the £700-£750,000 price bracket.  All for the sake of fifty quid.

” I think we have possibly been a bit naive” says Alister Weightman.  He was referring to the type of buyers that were shown the house. I think it was more do do with his choice of estate agency. The original asking price was £750,000 and with an average agency fee of 1.5%, that’s £11,250 + vat. If the house sells now at the full new asking price, the agency fee is £10,500 + vat. The agency in question has ‘suffered’ a drop in their fee income of £750.  The Weightman’s far more.  In this instance, I believe it’s the agency and not the market at fault.

And finally, Fox Cottage, Grange-over-Sands, Cumbria.  Two years and five months on the market. Plenty of interest. In fact, about 30 viewings , but no offers. In a nutshell, the wrong type of buyer. Not the Brexit factor. Not the stamp duty.  Just an agency that is not qualifying potential buyers. Ask them some serious questions about the ability of buyers to complete, before they are allowed to view. An agency will send anyone to view, in a lot of cases. It signals that they are still doing their job. Or not. As the case may be.

Help. I can’t sell my house. It is a competitive market right now, but there is also a distinct lack of quality property available. Those that are on the market should first make sure that they have the very best estate agency. One that knows their stuff. Then, make sure the price is appealing and hopefully attract multiple bids.

As the article concludes, “we wish them luck”.  Most of all, we wish them the care of the very best estate agency. Estate agencies are not a commodity. The very best high-street agencies are worth their weight in gold.

If you need any advice on choosing a great estate agency, or help in negotiating the pitfalls of selling your home, we would be happy to assist.  Details on www.agencynegotiation.com.

 

3 Replies to “Send For The Cavalry!”

  1. Can’t agree with this article, with the time frame that most of the properties have been marketed for all are clearly price related reasons for not selling, over the past 24 months we have had the most buoyant market place we have known.
    If your home hasn’t sold, yes it’s easy to blame the agent, brexit, SDLT, however 9 times out of ten it’s the vendors

  2. Currently estate agents can’t win, of a house is valued honestly then the vendor chooses an agent who has over valued it, then when is doesn’t sell changes to the next agent who will tell them anything to get their contract signed (apart from the the fact the price is too high) otherwise the vendor chooses another agent.
    I speak from experience working in agency and the amount of clients I have met who blame an estate agent for not selling, change agents, agree to review price following viewings/feedback and still won’t drop after receiving lots of viewings and feedback.
    In short the public bring the issues on themselves by fee hunting for the agent with the lowest fee and often highest valuation and then are surprised when there home doesn’t sell.

    1. Stephen,
      many thanks for your comment. I agree, many vendors bring it on themselves by, as you say, fee hunting and highest valuation.
      It is, however, incumbent on any agency to illustrate the consequences of these two poor choices. If the vendor chooses another agency that
      has over-valued, the issue is not that the vendor thought the fee was too high or that the service wasn’t good enough. The issue is that they didn’t believe you. Your argument/pitch wasn’t strong enough.
      This is one reason we provide the Needle & Haystack podcast platform. To allow vendors to really understand the core values of an estate agency. To have confidence that the agency and vendor share these values. In this way, valuation and fee become secondary to instructing an agency in which the vendor has trust.
      Not all agencies over-value, but a highly respected brand name is no guarantee that the vendor has picked the best agency, or that the valuation is accurate. As you say, over the past twenty four months, it has been a buoyant market and, to blame the vendors for wanting to believe the agency may be a little unfair. It is very easy to pitch a valuation and keep reducing the price until the property finally sells. Traditional agents should be better than that. Otherwise, vendors will just pick the online crowd.
      Best wishes for the year ahead.

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