The time has come to tackle two of the most talked-about points in estate agency – guide prices and agency fees. Some may say these topics are rather taboo, but get them wrong and your sale isn’t even going to get off the ground.
Setting your guide price is one of the most crucial points to your sale and is at the centre of your marketing campaign. When you see properties languishing on the market for months it is often because the guide price is out of kilter with market expectations.
The old-school mindset seems to persist, that one should pitch a guide price significantly above the actual market value, on the assumption that potential buyers will want to negotiate and beat the price down. Nevertheless, one holds on to the hope of still achieving more than the average price. But this perception hasn’t been a relevant or realistic approach probably since the last time the market boomed way back in 2006.
Nowadays, there is so much more information easily available to buyers. They are now willing and have the tools at hand to make themselves more savvy about the marketplace and true property values. So they can easily spot an inflated guide price and it instantly suggests to them that you are pushing your luck. It undermines your integrity and buyers will approach your sale with an instant lack of trust.
It is said in agency circles that viewings are the lifeblood of any sale. So therefore if your guide price is too high it is likely that you will receive next to no viewings. And no viewings mean you can’t even have a conversation with a prospective buyer to let them know that your guide price was deliberately high, as you expected to negotiate.
My advice would be to set a realistic guide price with the aim of securing viewings. This will automatically create some excitement about your sale and therefore open up the opportunity of having more than one offer and thus the potential of negotiating upwards rather than down.
Estate agency fees are a constant hot topic, so what is my take? An estate agent offering you a ‘cheap deal’ is like a bargain basement bin liner. It might look like it is doing its job at first, but the problems build up the fuller it gets. Suddenly you find that you need to run the gauntlet of getting the full liner from the kitchen to the wheelie bin outside. If you actually manage to make it all the way without the bag tearing open, you feel a huge sense of relief. But with cheap bin liners, that rarely happens and more often than not the bag splits and the rotten rubbish spills out all over the place.
But pay just a few pence more and you will get a much higher quality liner that you never have to worry about splitting. Similarly, even a modest increase in fees can get you an agent in another league and will secure a buyer on the best terms. When it comes to selling your most important financial asset – your home – doesn’t that seem like the most sensible choice?
Equally you need to remember that agents are rewarded by their commission. Cut their reward out of the deal and you will very quickly find that your sale goes to the back of the queue. Ensure your commission to the agent is on the nose and fair, then it is a win-win for you both.
So in conclusion, your guide price and fee to the agent are key to how well your sale will go. Both need to be exactly right, otherwise you will end up with a cupboard full of cheap useless bin liners.