Want to reduce house asking price but EA advises not to?

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twentyfour

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My house has been on the market for almost four months now. While there wasn't any viewings before Christmas I've had six or seven this month but no bites. The sale price is currently at the 2006 price but I would like to sell asap so in order to try and get a bite I suggested dropping the price by 10% as a 'reduced to sell' price. But my estate agent thinks that this would only encourage buyers to offer 10% below that again and advised against this course of action.

Must admit I'm not comfortable with all this second-guessing business and would prefer to just lower the price now and hope that someone bites.

If there is anyone here viewing or considering making offers on houses at the moment, is this how you are looking at it? 10% below no matter what the price is?
 
twentyfour said:
I suggested dropping the price by 10% as a 'reduced to sell' price. But my estate agent thinks that this would only encourage buyers to offer 10% below that again and advised against this course of action.
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The EA is working for you. They can give their opinion but you give the orders!
 
If there is anyone here viewing or considering making offers on houses at the moment, is this how you are looking at it? 10% below no matter what the price is?
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If it was the case, wouldn't you have received a bid at 90% already? i.e. the price you want to drop to.

You're obviously leaning toward dropping the price, and I'd say to trust your instinct and go with it. I'm sure I don't need to tell you that houses selling at 2006 prices are rare enough. In fact, your EAs logic is a bit alarming.
 
I'd hold out for another month or so. EA is right - no one wants to pay asking price even if u have recently dropped price. Seven viewings in jan is great. I have had 3 - after nothing at all for 3 months. My EA is very busy. Things are looking up I think. The next viewing could be the one. Don't loose hope yet.
 
The EA is working for you. They can give their opinion but you give the orders!
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Exactly, he is being paid to do what is right by you, but if you feel that you know better, give him your orders.


You're obviously leaning toward dropping the price, and I'd say to trust your instinct and go with it. I'm sure I don't need to tell you that houses selling at 2006 prices are rare enough. In fact, your EAs logic is a bit alarming.
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Its hard to assess his logic without knowing what area OP is dealing with. For what its worth I would agree with the EA in that no matter what your asking is now people will be reluctant to meet it.
 
Yes, I realise that the EA is working for me, but he seems quite admamant that its not the price that's the problem, more that most viewers are paralysed by whats happening in the wider economy at the moment - as am I!
 
Why oh why is your house for sale at a 2006 price? It makes absolutely no sense in having your house priced at a 2006 price, as we are now in 2008 and the market has changed considerably since then. 2006 was two whole years ago!! Have you read any recent reports or TV programmes about this issue lately. Many newspapers report and indeed Prime Time earlier this week that the gains made in property prices in 2006 have now been wiped out. Prices are now more related to 2005 prices. Why would anyone looking to buy a property in the current climate want to purchase a property valued at a 2006 price - when things were at their height.

Buyers are not stupid and they are more than likely to be fully up to date in what is happening in the market. If your property is overvalued then they will spot it a mile off and not likely go to view and definitely not put in an offer – 10% below or otherwise. In a market where prices are coming down, only a property that is very good value will get a bite in my opinion. Otherwise the risk is too high for most buyers as they potentially face going straight into negative equity.

It's in the IAVI and Estate Agent's interest to keep house price inflated as their fees are charger as a % of the eventual sale price. The Government also has a vested interest in allowing the IAVI and EAs in continuing with this because they clean up on the stamp duty, VAT etc., The higher the sale price secured the more taxes the Government gets.

David McWilliams summarised this obvious situation on Prime Time on Monday night. The IAVI and EA's in general should not be allowed to self regulate. It's bad for consumers, it's bad for the IAVI and its members and bad for consumer confidence in the property market.

Property in my opinion is still massively over priced in Ireland. Remember on average property experienced 10% price drops in 2007. However in the greater Dublin area price decreases were more than this average. Those selling houses will not attract and secure a sale until the price reflects the number the buyer feels comfortable paying – it's that simple. The price secured is only as good as the market is prepared to tolerate. Setting your property price at 2006 values seem quite insane to me in this context.
 
twentyfour said:
My house has been on the market for almost four months now. While there wasn't any viewings before Christmas I've had six or seven this month but no bites. The sale price is currently at the 2006 price but I would like to sell asap so in order to try and get a bite I suggested dropping the price by 10% as a 'reduced to sell' price. But my estate agent thinks that this would only encourage buyers to offer 10% below that again and advised against this course of action.

Must admit I'm not comfortable with all this second-guessing business and would prefer to just lower the price now and hope that someone bites.

If there is anyone here viewing or considering making offers on houses at the moment, is this how you are looking at it? 10% below no matter what the price is?
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I think the 2006 price is a little high in the current market.
 
I agree completely, this is why I want to reduce asking price by 10%.

However, EA strongly feels that the current price is not a problem, as apparently my house has provoked the most interest of everything he has on his books. It's outside Dublin and is not in an estate so there are no similar properties to compare the price to other than those of similar square meterage in the same outlying area who indeed are asking 150k more than I am currently. So he thinks that reducing by 10% will have no effect and I might as well keep it at the current price and wait for a 90% offer.

I'm really caught because although I do want to sell I would prefer it was at a more reasonable 'reduced to sell price' instead of all this second-guessing 10% on top of 10% business.
 
I would go with your EA. Its in their interest to get shut of the property asap, not to get the highest possible price for you. If you get an extra 10% then, assuming they are on a 1% commission, the EA will only get .1% extra. So I would assume that his advice is sound,

I do think that in the market now people dont want to pay the asking price. If you drop your price to the current level you can be sure that someone will come in with a price lower. I think there is a lot psychology involved.

I have a place on the market for four months and I have seen a doubling in the rate of viewings this month, so people may be coming back to the market. Saying that the "R" word coming from the US wont help things.

Also, if you put your property up four months ago why was it put up at the 2006 value. If there are not other similar houses how do you know it was the 06 value? Did you EA value it?
 
why not give it a time frame, even just two weeks, see if you get an offer and if not reduce the price. If your house is a one off and there is nothing to compare it too I can see where the estate agent is coming from. Personally I know a good few people who have started looking now who were holding off before Christmas so it might be worth holding on to see the lay of the land.
 
I know the 2006 price (Jan 2006) as I had it valued for remortgage purposes.
And it's at that price because as you all say, nobody is currently willing to pay a 2006 price so I am expecting people to come in with lower offers. I just thought that by doing the work for them ie reducing to a more realisitic price that I could avoid this cat and mouse game.
 
It's in the IAVI and Estate Agent's interest to keep house price inflated as their fees are charger as a % of the eventual sale price.
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I would aggree with this, the EA agent to not so much concerned about the extra small % he will make on yours by selling at the higher price, but rather how it will affect all the properties on his books if all the prices dropped also. Buyers are very good at finding out what properties sold for in the areas they are looking at. At the end of the day, you need to make the call & go with what you believe is right.

In reality, the EA is not working for you, but for himself!!
 
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Why oh why is your house for sale at a 2006 price? It makes absolutely no sense in having your house priced at a 2006 price, as we are now in 2008 and the market has changed considerably since then. 2006 was two whole years ago!! Have you read any recent reports or TV programmes about this issue lately. Many newspapers report and indeed Prime Time earlier this week that the gains made in property prices in 2006 have now been wiped out. Prices are now more related to 2005 prices. Why would anyone looking to buy a property in the current climate want to purchase a property valued at a 2006 price - when things were at their height.
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The report states that prices have dropped to end of '05 beginning of '06 prices, so her current price would seem about right.

If your property is overvalued then they will spot it a mile off and not likely go to view and definitely not put in an offer – 10% below or otherwise. In a market where prices are coming down, only a property that is very good value will get a bite in my opinion. Otherwise the risk is too high for most buyers as they potentially face going straight into negative equity.
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Most posters here seem to view that there are bargains to be had in the current market and no matter what the price you should offer 10-30% below asking. So if that is the case then why are people not putting in a low offer. The price has not put anybody off post christmas so your argument is flawed.

It's in the IAVI and Estate Agent's interest to keep house price inflated as their fees are charger as a % of the eventual sale price. The Government also has a vested interest in allowing the IAVI and EAs in continuing with this because they clean up on the stamp duty, VAT etc., The higher the sale price secured the more taxes the Government gets.
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This is where your argument takes a leap into twilight zone. As Arry has pointed out a further .1% is not that attractive to an agent, and the argument has been used against agents that they wont try and get you the best price because its only a further .1% etc. So we're damned if we do and all that. What are you on about re the govt? What input do they have to allow people to set certain prices?

David McWilliams summarised this obvious situation on Prime Time on Monday night. The IAVI and EA's in general should not be allowed to self regulate. It's bad for consumers, it's bad for the IAVI and its members and bad for consumer confidence in the property market.
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The IAVI don't want self regulation and we have being trying to help organise a regulatory authority since 2005. Even so I don't think consumer confidence is the problem at the moment, so I don't see this as a valid point.

Property in my opinion is still massively over priced in Ireland. Remember on average property experienced 10% price drops in 2007. However in the greater Dublin area price decreases were more than this average. Those selling houses will not attract and secure a sale until the price reflects the number the buyer feels comfortable paying – it's that simple. The price secured is only as good as the market is prepared to tolerate. Setting your property price at 2006 values seem quite insane to me in this context.
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Its all a bit general isn't it? What most of us are experiencing since christmas is a noticeable pick up in the market, so to call this EA's valuation insane is extreme.

I would aggree with this, the EA agent to not so much sconcerned about the extra small % he will make on yours by selling at the higher price, but rather how it will affect all the properties on his book if all the prices dropped also. Buyer are very good at finding out what properties sold for in the areas they are looking at. At the end of the day, you need to make the call & go with what you believe is right.

I reality, the EA is not working for you, but for himself!!
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You forgot to ad a pinch of salt to your advice
 
my brother was in the same situation as you for the past 18 months - -EA advised him to keep at 06 prices and he did so, even if it was against his better judgement.
Finally had enough about 4 months ago and dropped it to a more realistic price given current market conditions. Got an offer pretty quickly after that and although it fell through another offer came in 2 days later and he closed last week.

At the end of the day the Market does'nt lie and something is only worth what somebody will pay for it.
 
Thanks everyone for your opinions, very helpful. Spoke to my EA again today and am going to lower the price by 10% and see what happens. If people come in with offers still below my 'reduced to sell' price is then I can mull it over then, think at this stage I would just like something to mull over.
 
You forgot to ad a pinch of salt to your advice
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Not too sure what you mean by this but I'm sure it's not gastronomic advice!!

I wasn't putting EA's down in anyway, it's just there are EA's who play different strategies:
- Some price low to try & get more houses sold = lower % but higher turnover.
- Some price high to keep the average in the area up (and make the seller think they will get a better price) = higher % but lower turnover.

I got my house valued a few years ago & was amazed to find a 16% difference in what they suggested I advertise at (a std 4 bed house in Dublin). Lowest said €700k and highest said €810k
 
At the very peak I seen Sherry advertise a 4 bed in college park in Dundrum for 930,000 when the highest valuation before that was around 830,000 and it's now closer to 700,000 (and still too much). Those were the crazy days....

If you want to sell price very competitively.
 
Doberden....surprise, surprise: it was the same EA you mentioned who gave me the high valuation
 
So when you say a noticeable pick up in the market MrMan, does that mean that people are now selling their properties and at the price they want?
 
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