Reductions in asking prices to align with price-sensitive buyers are a common occurrence right now but don't reduce yours by too much too soon.
In the last 18 months, the housing market has transitioned from a sellers’ market into a buyers' market.
As this change unfolded, some sellers found themselves having to trim asking prices to match buyers’ expectations and lower budgets.
This translated to a higher than usual number of asking price reductions as buyers and agents worked together to attract buyers and get more offers.
Tanya Baker, Independent Agent at The Estate Agency, says: ‘If you price correctly from the outset you're more likely to sell and get the best price.
‘Two things get a home sold; price and marketing. If a home has beautiful images, a floorplan and video but a lack of enquiries, it will nearly always be the price that's the problem.
‘With the market not being an exact science, it's the agent's job to put together impeccable marketing material that will help the home to stand out with the price being treated as a marketing tool - to entice buyers in.’
Asking price reductions - a means to achieve a sale
Pricing a home is not easy, especially when a property has unique or special features, or is larger than the rest of the homes on the market.
The motivations and the reasons why a seller wants to move, how quickly and what budget they need to do so will also play a role in how they will price their home.
The asking price can impact whether the property attracts sufficient demand to get viewing and offers and, ultimately, how long it will take to agree a sale.
Some 3 in 4 properties reach the sale agreed stage within 90 days of coming to the market, although the current average number of days until a sale is agreed is 34 days.
As a seller, if you find yourself without an offer within 30 days but remain very keen to move, it's worth speaking with your agent to make sure your property is still priced correctly to appeal to buyers.
How much are house prices being reduced in October 2023?
In this article, we share our analysis of asking price reductions over the last month, contrasting them with time on the market.
We've also analysed properties with sales agreed and whether they had an asking price reduction too.
We found that only a quarter of sellers reduce the asking price in the first 90 days of a home being listed on the market.
But the longer a home stays on the market and remains unsold, the more sellers who are keen on moving become inclined to cut asking prices to attract demand.
Currently, 4 in 10 homes on the market have been listed for 90 days or more. Out of these homes, 61% have had their asking price reduced.
Most sellers start with small reductions: 6 out of 10 sellers trimmed prices by less than 5% initially.
But over time, chipping prices could add up to significant discounts.
We find that 1 in 5 properties that have been on the market for 3 months or more end up with an asking price that’s at least 10% lower than the initial one.
But on average, sellers who've had a home on the market for 3 months are reducing their prices by 5.1%.
These insights show re-pricing is a tactic commonly adopted by sellers whose properties have been stuck on the market attracting little interest.
Prospective sellers should consider talking to more than one agent and getting several appraisals before they put their home on the market.
How can I sell my home quickly?
While the asking price is important, it’s also key to discuss how long the agent thinks it may take to find a buyer and what price might be appropriate to secure a sale within 3 months.
Is the end of the year a good time to cut the asking price?
Historical data shows that sellers are less inclined to reduce asking prices in November and December, despite lower demand and fewer sales compared to other seasons.
We are now registering house price falls, which means buyers are scrutinising prices more than before.
But rushing into cutting prices right now may not be the answer.
First of all, sellers should think about how quickly they need to secure an offer.
The market is weaker in the final months of the year, but buyers return after Christmas.
Sellers who aren’t in a rush to sell may be better off waiting until January.
Reconvening with your agent now can help you decide your next steps.
Is reducing my house price necessary to achieve a sale?
Despite weaker demand and more price-sensitive buyers, two-thirds of sales agreed in September were for homes where the asking price was not cut. It was set at the right level to achieve a sale without the need for a reduction.
‘Many homeowners fall into the trap of trusting the cheapest agent promising the highest price,’ says Tanya.
‘As many movers are often selling their largest asset, I'd always encourage a homeowner to do their own research and look at price data. That way they can check that the agent’s data and their own findings marry up.
‘One of our most successful cases was a home nestled next to railway tracks. We knew this home would be around £1.5-£1.6m but pricing it at £1.6m would have meant less buyers would have viewed it. So we listed at £1.45m and ended up with six offers and a sale at £1.6m.’
How to make sure your property is priced right
Today, 36% of properties marked as sold subject to a contract have undergone an asking price reduction.
And asking price adjustments are happening across the board.
As a downsizer or upsizer, repricing will not only affect the property you are selling but also the one you may be looking to buy next.
Buyers remain value-conscious as budgets for those buying with mortgages shrank in the last 12 months.
Our advice for serious sellers looking to secure an offer ahead of Christmas is to speak to an agent and ensure your property is priced at the right level for local buyers.
See what local experts think your home is worth
If you're getting ready to sell or just super curious, we recommend getting a free, in-person valuation from a local estate agent.
