A year ago, buying and selling property was relatively simple. The seller set the asking price and in four out of five cases, the buyer met it immediately*. Not a murmur nor a grumble from their lips, never mind an attempt at negotiation.
Nowadays, things are different. Mortgage interest rates have increased dramatically, and confidence in the property market has started to deteriorate, as many experts predict house prices will remain flat over the next year.
Not surprising, then, that the average number of house hunters per estate agent has dropped by 21% since October 2006, from 360 to 282, while the average number of properties per agent has risen by 2% over the same period.
Research also shows that, with demand from buyers dropping off and more homeowners looking to sell up, the average gap between the asking price and the sales price of a property has widened significantly to 4.2%.
This means the property market is fast becoming a buyer's market, with many sellers being forced to lower their expectations and compromise on price. Whether this makes you go "Whoopee!" or "Ouch!" will depend on whether you are a buyer or a seller.
For anyone mid-whoop, watch this space: in Part Two, I will explain how buyers can make the most of the weakening market conditions and cut the costs of buying of your home.
But what if you're a seller? What can you do to ensure your property achieves the best possible price, despite the fact that the buyer is now likely to have the upper hand? Here are seven top tips:
- 1. Tidy up. According to Nationwide Building Society, over half (55%) of potential buyers say they would find the sight of an untidy house a major turn-off. But don't wait until your first buyer walks in the door -- de-clutter before the estate agent comes round to take photos of the property. First impressions count!
- 2. Tackle DIY disasters. Poor building work or DIY is a big turn off according to around 90% of potential homebuyers. Replacing cracked kitchen or bathroom tiles costs next to nothing and takes very little time, but failing to replace them can give the impression of a run down, uncared for home.
- 3. Go green. From December 14, all sellers will have to provide a Home Information Pack (HIP) to potential buyers, and this includes an Energy Performance Certificate, detailing the energy efficiency of the property. So environmentally friendly features could help your property to stand out from the crowd. But while there's no doubt green is all the range, it's still wise to get a local estate agent to estimate how much value going green would add to your property before embarking on any expensive projects.
- 4. Be flexible. Make sure you can show your home at short notice. Think about the schedules of your buyers: for example, if your property is likely to appeal most to young professionals, choose an estate agent that can show properties after 6pm and on both Saturdays and Sundays. This means you are likely to get more viewings. If you have a garden, invest in garden lights. At this time of year, you are unlikely to get many viewings in daylight and this means buyers may not be able to see the full potential of your property.
- 5. Get your paperwork together. Ensuring that your solicitor has everything he or she needs to exchange before you even find a buyer will mean that you can move quickly. This is vital in a market when prices are being squeezed and could reduce the likelihood that your chain will fall through.
- 6. Be realistic. When setting the price, look at what other, similar-sized properties are going for, and weigh up how desirable your property is in relation to them. Check how much properties in your postcode have sold for in the past and consider getting an in-depth valuation report online. And most importantly, decide how important it is to you that you sell your home quickly. It is often best to go in low, at a realistic price, than to be forced to reduce your price later, because the property hasn't sold.
- 7. Add value. If you are prepared to take on a building project such as converting the loft or adding an extension, this can add thousands of pounds to the value of your property, even in a buyer's market. But again, be careful and do your homework. Speak to an estate agent first about what price you could realistically achieve and then ask an architect or conveyancer how much the project is likely to cost. The difference is your profit. Are you prepared to put up with all the hassle and stress of the building work to achieve that sum?
There's no doubt that challenges lie ahead for anyone wishing to sell right now. But if you price your property realistically, present it carefully and ensure it represents value for money, then finding a buyer should not be a problem. Finding a home to move into -- that will hold its value in today's uncertain market -- is in many ways a more difficult challenge. Part Two will look at how to drive down the price of property and ensure you bag a bargain...
More: What Buyers Want | The Truth About House Prices
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* According to research by Yorkshire Bank