FIRST PUBLISHED IN 2010. EQUALLY RELEVANT TO THE 2018 BUYER'S MARKET.
“Should I sell my property in a buyers’ market? For the past two years, this is the question I have been most frequently asked by potential sellers of residential property” says Phil Wilson, Director of Alexo Property Brokers. “Property owners I speak to are rarely advised by estate agencies not to sell. This makes sense. Estate agencies are in the business of selling property.
I believe that property owners can obtain the answer themselves by asking a simple question: “Do I have a real need to sell or do I have a desire to sell at my price?” Answering this question will give the property owner clarity on whether they are an urgent or a non-urgent seller. The urgent seller has to sell, whereas the non-urgent seller has the comfort of choice. Once a decision to sell has been made, the two selling methods used for either type of seller in a buyers’ market should be very different.
Urgent sellers generally need to sell their property within eight to twelve weeks. In most cases the reason for this urgency is financial, but may also be due to relocation, separation or loss. An urgent seller needs their sale process to be swift. In a buyer's market, parameter pricing on a weekly basis is the only effective tool that the mandated agent should use to ensure that a large number of potential purchasers view the property in order to obtain written offers within the limited timeframe. The type of purchaser most present in the current market, the cash bargain hunter, will be attracted to this property. As these buyers are unemotional & exclusively price-driven, the urgent seller may have to consider written offers at 20 to 30 percent below their asking price.
Non-urgent sellers do not need to sell. If they decide to sell, they have the luxury of time on their hands. Six to eight months may be worth the wait in order to achieve a selling price close to their aspiration. The mandated agent needs to protect this type of seller from the cash bargain hunter. Advertising week after week may convey the wrong message of urgency to the market. Showdays every Sunday, in addition to the inconvenience that they may cause to the seller, will attract the bargain hunter through an open front door. Potential purchasers should be qualified extremely well by the agent prior to a viewing appointment convenient to the seller. The number of viewings will be low, but this method will ensure that only written offers within 10 percent of the asking price will be presented to the seller.
The common theme in both cases is that sellers must ensure that the estate agent is completely focused on their specific needs. The property owner has contracted the agent and, on transfer, will pay the agent’s commission. The needs of the buyer and the agency should always be secondary. Prior to signing a mandate, sellers should request from the agent a detailed marketing plan that suits their requirements as either an urgent or a non-urgent seller.
So, to sell or not to sell in a buyers’ market? Unfortunately, urgent sellers have no choice but to sell. Should non-urgent sellers choose to sell, they should ensure that their property is not exposed to the market in the same way as an urgent seller’s property. In short, the process of selling must match the seller’s need or desire to sell.”