How to Tackle Property that Won't Sell
Traditional advice from estate agents is: if a property doesn’t sell, drop the price.
Estate agents like this advice because they don’t have to do anything apart from maybe reprint the brochure. They still have the listing, and they hope a lower price will be an easy way to bring more buyers through the door with little effort on their part.
For the seller, though, this is far from ideal, because it means eating away at the value of a significant asset. At Movewise we believe there is often a better way.
Price versus demand
In order to achieve a sale, the demand from buyers has to match the price the seller is willing to accept. If the price is too high or the demand is too low, you won’t sell. You only get a deal if the price and demand meet in the middle.
Conventional wisdom is that you can’t do much about demand: it's either there or it's not, so the only thing you can do as a seller is to drop your asking price.
While this might result in a quick sale, it also means that as a seller you have willingly given up some value. And if the property doesn’t sell, you’ve now got a listing showing up on Rightmove with a price reduction, still unsold, and people may start to wonder what’s wrong with it.
However, buying and selling property is more complicated than buying and selling other commodities, because every single property is different.
This means that selling a home is effectively like a beauty parade: it’s your property versus everything else for sale in that area and price range at that time.
This selling environment changes all the time. For example, if you own a flat and a new, nicer block gets built next door, your flat becomes the less attractive option for buyers in the area, so its market price goes down.
And it’s not only properties that are unique: buyers are all different, too. They have different budgets, timelines, requirements and tastes.
The importance of a good agent
The job of an estate agent is to match these different buyers with different properties, and some will do a better job than others. You might think that in the age of property portals, agent choice doesn’t matter so much anymore. But it does, for a number of reasons.
First of all, not everybody is looking on Rightmove. And even if they are, they might not find your property. They think they know what they want, and their search criteria don't include your property, but if they actually viewed it they might realise that it is suitable after all.
Which brings us to reason two: some estate agents are harder workers than others.
Rather than relying on enquiries coming to them, a good estate agent will try to match properties to potential buyers who have registered with them previously. They can increase demand by phoning buyers and saying, for instance: “I’ve got a new listing that’s slightly outside the area you were looking for, but I really think you should go and view it.” Different agents have different client lists, which is why you should choose an agent who tends to sell lots of property similar to the one you want to sell. They will have more suitable buyers on their books.
And another reason it’s important to choose the right agent is that you want someone who is motivated to put in the work, phoning potential buyers rather than just waiting for the call via Rightmove.
Some agents are better than others in this regard – and it’s also inevitable that if a property has been listed with them for months, they are likely to focus their attention more on the new properties coming onto their books than the tired old one they haven’t been able to shift.
So, if a property hasn’t sold, our key message is: don’t drop the price, drop the agent.
When to relist
So you want to try a different agent. When is the best time to do it?
It’s no secret that the property market is seasonal. Currently, in November, agents are busy trying to progress sales where buyers want to move before Christmas, but volumes of new viewings tend to tail off. If a property hasn’t sold towards the end of the year, there is value in taking it off the market and trying again in the New Year.
We know that not all buyers are on Rightmove, but searches on Rightmove are a pretty good indicator of volumes of people searching for houses. This graph shows the volume of traffic searching Rightmove over the Christmas and New Year period in 2018-19 and 2019-20 (in more recent years, the pandemic was more of a driver than seasonal changes).
It's clear that search volumes drop right back in December, but as soon as the holiday season is over, they go right back up again. We examine this in more detail on our website in our article When is the best time to sell a property? Traditionally you will often be told to wait until spring, but in fact if you look at the traffic, even in early January there are lots of people starting to search.
So if there are already lots of people searching in January, but sellers are being encouraged not to list until March, there’s an opportunity to get ahead of the game in January or February. In many cases that's what we advise: take the property off the market by the beginning of December, make sure you have good photographs and the right valuation, and then relist with the right agent in the new year.
One caveat: beware of exclusivity periods. Check the terms of your agreement with the estate agent. Often the agent will be entitled to commission if you sell within a certain period, regardless of whether they got the sale. With Movewise, this is not a problem as we don't lock clients in to exclusivity periods.
Presentation is key
If the property you are selling is unoccupied, then after several months on the market it may well need some TLC. Ensure that it is cleaned and the garden, if there is one, is kept tidy, and consider taking some new photographs. If there are tenants in the property, try to gain their co-operation to make sure that the property is in good order for both photos and viewings.
Choose the best sale route
Finally, you need to make sure that you are using the right approach for your property.
If you're selling through an estate agent, then as explained above, you want one who has both a good database of buyers for your type of property, and the motivation and sales skills to get those buyers to look at your property. If you're a landlord, you also want to be sure that the agent is comfortable handling rental property.
Depending on the property and your priorities, another sales route might get better results: perhaps direct marketing to investors, or even sale at auction. Our property team can advise on this, so if you are considering selling a rental property, register your details with us and we'll be happy to help.
