Of all the silly games that agents play, this one annoys us the most: by promising you a huge sale price, they increase their chance of winning your business, and they know that they can just reduce the price once you’re tied into a lengthy contract, and it's eventually sunk in that you're not going to sell for such a value.
They’re basically taking advantage of their position of influence to give poor pricing advice – which is to their gain and your loss.
Even if we assume they’re not doing it maliciously, we still believe that starting with the highest possible price is a really bad idea. Our view on pricing seems very logical to us, but it’s also the exact opposite of what most people do – so let’s walk through it and see if you agree with us.
We start with the obvious fact that you’re not going to sell your house for the best price unless enough people come to look at it.
And people aren’t going to come and look if it’s ridiculously overpriced compared to other similar local properties. Your property might not even appear in their online search results if it’s outside the range they’re considering for the area and property type.
At the same time, you can’t go too cheap: both because people might assume there’s something wrong with it, and because the asking price does “anchor” negotiations – so you can get a price from £500,000 to £550,000, but you’ll never get it to £1 million.
So realistic pricing (combined with good quality marketing) will get the largest possible number of people through the door. The more people you get through the door, the higher the chance of multiple offers. And multiple offers result in the best two words a seller can hear: “bidding war”!
Negotiating these offers is where we come into our own, and it’s why we exceed the asking price more than 90% of the time. With the right kind of encouragement, people can be persuaded to pay more than they’d planned to in the first place: by that point they’re in love with the property, and they hate the idea of losing out on it for the sake of an extra few thousand pounds.
In fact, we recently sold a property for £50,000 more than the bank’s surveyor valued it at – and that would never have been possible without receiving multiple offers.
We’re very confident that our approach works – to the extent that we make two key offers to all our clients. Firstly, we offer a shorter exclusive period if you agree to our pricing strategy – because we know we can sell it that much faster if the asking price is right. And if we don’t get you an offer within 80 days, we’ll reduce our commission by 15%.
As well as making you these promises, we do something quite unique to make sure our goals are aligned with yours. With a normal agency fee structure, it’s in the agent’s best interests to persuade you to accept the first reasonable offer that comes along – because an extra £10,000 on the sale price equates to something like £15 or £20 in their pay packet.
They’re better off just getting it sold at any price and moving on to the next one, so it’s hard to blame them for doing exactly that, and turning their attentions to pressuring you into accepting the offer, rather than risk losing a sale.
What we do is ask for you to pay us a higher fee for getting you an exceptional result – so when you make a lot more money than you were expecting, we get rewarded too. We’re stumped as to why more agents don’t use this model, because it’s a guaranteed way to make sure the best outcome for you is also the best outcome for the agent and everyone is working towards the same goal.
So if you work with us you can be sure that we’ll agree on a reasonable price, create masses of interest, then have every motivation to get you a result that means you can book an extra holiday this year – or maybe just put some extra padding in your bank account at a time when money is tight. Give us a call on the number at the top of the page and let’s have a chat.
Or if you prefer to work with an agent who’s already promised you a brilliant price, try out our model on them: say to them that if they’re that confident, how about you pay them a lower fee if you end up selling for a lower price than they just stated. The answer you get might tell you a lot about their actual intentions.
We’ll see you back here in a few days, when we’ll be moving on to the next step after setting a price which is marketing your property – and telling you the one factor that makes more of a difference than anything else when it comes to generating interest and getting the phone ringing.
We're always willing to offer our knowledge, expertise and even a few secrets about selling property. So if there's anything at all you need to know, please get in touch for a chat as we're nice people, and we love being helpful.
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