A Bird in the Hand

Sometimes things can be so perfect that we find ourselves, whether consciously or sub-consciously, trying to screw them up. Take for example, the increasingly common story of receiving an asking price offer from a great buyer on the first day of marketing your house for sale. In many ways this is the perfect situation. After all, you’ve found a proceed-able buyer at a solid price on the first day! Now comes the dilemma. What do you do? Should you accept the offer, or does this mean your property has been under-valued?

Well assuming you and your agent have set an asking price at or above market value, as opposed to an artificially low price designed to generate lots of interest (increasingly common, and effective) here’s our advice.

First, if your agent hasn’t done so already, get them to convince you this is a good price. You’re looking for evidence, not a sales pitch. If you’re using Brik, we’ll provide you with hard data showing that the price offered for your abode (typically on a £ per square foot basis) is equal to or higher than that achieved by other nearby properties of a similar type and standard. Don’t fool yourself into thinking the highest valuation you had way back when you got all those estate agents in to value the place is what you should be getting, unless this was backed up by real data as above, rather than hot air. Likewise, be very skeptical of advice given by other agents whether they’re instructed on the sale or not, unless they’ve got facts to back it up. Often unscrupulous agents will use your uncertainty as an opportunity to undermine (or “Torpedo”) the sale in the hope of getting the property on themselves.

Next, find out if the buyer really is proceed-able. Can they finance the purchase now or do they need to sell somewhere first? What’s their mortgage loan-to-value ratio? (anything over 75% is shaky). Do their timings fit with yours? A good agent will provide this information up-front with the offer.

Now here’s the hard part, if your agent can prove the price is right and the buyer is good, accept the offer!

We’ve lost count of the number of owners who’ve ignored this advice and lived to regret it. Take for example, the owner of a nice house in Fulham that we recently valued at £1.4m and marketed at £1.45m (all prices have been altered by the same amount to preserve the owner’s anonymity). On the very first viewing we received an offer of £1.45m full cash, an astounding price for the property and road and we could prove it. Did the owner accept? No. What happened next? The buyer walked and bought somewhere else within a week. Over the following weeks the house attracted quite a bit of interest but no-one would go above £1.4m, let alone to £1.45m. After twelve weeks the owner ended selling for £1.395m. £55k less and twelve weeks, countless viewings and a lot of stress later. The lesson is that during the time your house is on the market, there will always be one buyer willing and able to pay more than the rest. If you’re lucky enough to find them early in the process, which is quite likely given that the keenest buyers keep their eyes opened widest, be ready to pounce.