Get the Best Price
How to get the best price
The secret to getting the price right is to ask lots of estate agents. With this one qualification, that they must be estate agents who know what they are talking about.
Why talk to lots of estate agents?
There is no ‘right’ price for your property.
There may be a lot of indicators as to what a buyer might be persuaded to pay for your property, but that is based on a lot of factors – e.g. what similar or comparable flats have sold for this month, how many buyers are looking for flats like yours, whether they fought like tigers in a cage over the other flats, etc.
Various estate agents will all have views. But the issue is how buyers will behave this week about this property. Their predictions may be wildly different. So have several agents round, and assess their predictions before deciding which one to instruct.
Why use estate agents who know what they are talking about?
Put like that, it hardly sounds like a question worth asking. But sellers often assume that estate agents are like doctors or accountants and that what they know applies anywhere. But that’s not true. Estate agents only know about what they sell. Their knowledge is very time-sensitive and very area-specific. What properties sell for in Islington is no guide to prices in the Barbican. It’s not even a good guide to demand. The demand for flats in the Barbican may be completely different to the situation in say Hatton Garden, for good or for bad.
Estate agents’ knowledge is also all about the here and now. They are not collectors of information about what prices did in the past, not last year, not even last month. ‘Where are prices right now, judged by deals exchanged, offers made, the number of buyers on the phone?’ – that is the question, and being able to answer that question is the value they have to offer you.
Estate agents to talk to
I suggest some firms you should talk to before making a decision. It’s a big decision. You can’t lose by talking to them before you make the decision.
Get the Worst Price
How to get the worst price
Logically, you shouldn’t want to get the worst sale price for your flat. But sometimes it seems to me that this is exactly what many Barbican sellers must want. They go to some trouble to get things alarmingly wrong, when the same amount of effort – or less – would have got things rewardingly right.
It’s a toboggan ride
I think this is the start of getting the worst price. Flats have a rough kind of price – more like a band of possible prices. But there is a huge amount of flexibility as to where your particular flat will fall in that band. Selling your flat isn’t like being on a train on a fixed track; it’s more like careening down an icy toboggan run with your flat bouncing off one wall or the other, depending on how you steer it.
There are some factors which are beyond your control – e.g.: the state of the property market generally, the type and number of buyers out there. But some crucial factors are within your control – e.g the estate agents you choose, how you go about choosing them so you get a good one, the price they set, the efforts they make, etc.
Get these things wrong and you could be £50,000 or more adrift. Unwarranted price differences of £100,000 or more are not rare, even in terrace blocks.
Why do you care if the agents make easy money?
Agents just stick the flat online with Rightmove and wait for an offer? Right? I am not going to say “wrong”; I am going to say I don’t care even if it is true. Good luck to them. Why? Because the price is everything. The only thing which matters is whether they get you the best price.
Save 2%, lose 10%.
Sellers who become fixated with not wanting to pay good money to estate agents may decide to get a quote from an estate agent and then put the property on the market themselves, or accept an offer from a neighbour. If I have convinced you that there isn’t a ‘Right’ Price – only a ‘Best’ price – and I hope I have, you’ll realise that this is not a good model for selling a flat.
You could say,”But I did get the price from the estate agent first. Since he would have put it on the market at that price anyway, I have saved myself 2%.” That is the theory but it is not how it works out. For a start, estate agents are not dupes. They know when someone is asking for an indicative price but don’t really intend to instruct them. They get asked prices day in day out. So they throw something at you and then get back to the sale they are working on where they are going to be paid. Meanwhile, you do your deal, congratulate yourself on saving 2%.
3 months later, when all the recent sale prices appear online, everyone else will be saying, “Why did that flat go for 10% less than that other one on the same floor three weeks later?”
Cut the agents’ commission
Here’s an alternative plan. You could give the estate agents the property to sell, but make sure they don’t make easy money out of you by negotiating down their commission.
I see this as a short-sighted approach to selling, similar in my view to preparing to ride the Derby by cutting back on the horse’s food to save money. That’s one horse that will really be determined to win for you!
But it is a good plan for getting yourself the worst sale price, as the agent will be encouraged to knock out your property to get a quick and easy sale, and devote all his or her efforts on the property where they could make a full commission.
Pick the wrong estate agent
The final way to ensure you get the worst price for your flat is to pick the wrong estate agents to sell your flat. Love them or hate them – that is irrelevant. You’re not going on holiday with your estate agents. You just want them to get you the best price for your flat.
But many sellers go either of two (wrong) ways. One wrong way is to say, “I don’t like so and so, so I decided to instruct Mr Milesaway” to sell my flat. The other way is, “Mr Milesaway is a really nice guy so I have given him my flat to sell.” You really shouldn’t make this crucial decision based on who you would like to go on holiday with. It should all be about who will get you the best sale price.
Beyond a joke
I have made a bit of a joke of this ‘getting the worst price’ thing. But I mean all my points seriously. You need good Barbican agents. That is what matters.