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Sales strategy

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Sales strategy

Introduction

Movewise’s goal is to sell every property for the maximum price possible. Different vendors will have differing needs to sell and move and therefore we will tailor our process and the time it is deployed over to ensure every property at least gets a bid.

For general information on how to sell a property please see our article “How to Sell a House” which covers everything from choosing agents to preparing your property for sale.

This guide is specifically designed to help you understand how Movewise helps clients use agents, agree a listing price and then manage the sale to ensure you:

  1. Get a bid for your property (plenty never achieve this)
  2. Get a fully priced bid

These steps are guidelines and the timing and their application will only be at the prior agreement of the vendor.

This report is broken into the following sections:

  • Choosing a listing price
  • Number of agents required
  • How to achieve a fair price
  • Movewise sales strategy
  • Terminology

Choosing a listing price

All vendors want to sell a property they own for as much as possible; that’s a given. What differs for vendors is (1) how quickly you need to sell, and (2) the certainty of sale you need. Many vendors will have a “feel” for what their house is worth as they’ve kept an eye on property values in their neighbourhood or even a desired target price. Local agent advice will err on the side of overvaluation as agents tend not to win instructions if they value a property fairly. Every vendor wants an agent to “go for it” and some have built an entire marketing strategy with that branding.

Most vendors will research the portals when thinking about the price they will get for their property. We would caution against this for three reasons:

  • Most property on the portals doesn’t achieve a sale. It withdraws from the market unsold. The sales rate, that is the proportion of properties listed that actually sell, is around 55% across the UK and declines for higher-value properties. See this newsletter we wrote on this in August 2020 and this chart showing the sales rate of agents in the UK in 2020:

Sales rate of properties over time in 20202

  • Properties sell for a discount on the listing price. This will vary by location, price and time. On average this discount was 6% in 2020
  • Most properties that sell reduce their price. Around 30-40% of all properties listed on the market will reduce their price. Given only 55% of listings achieve a sale and those that do are likely the ones reducing, this means that two thirds of properties that achieve a sale reduced their price. Here's a chart of the proportion of properties on the market that had reduced their price in 2020:

Listings reduced in price over time in 2020

When considering what your property will achieve in price ("expected price") we would recommend the following:

  1. Review achieved sale prices. You can find the price of completed sales in your local area at Nethouseprices.
  2. Review properties under offer. Most agents when they sell a property mark it as “SSTC” or “Under Offer” on the portals. Assume a discount of 5% or so may have been required versus this listing price.
  3. Get three agents to value your property. Compare their quotes and feedback.

Movewise can help you choose the three agents to perform these valuations by running a best agent report and then will coordinate the agents thoughts and feedback. We’ll also overlay an independent perspective on what price you should list at given your requirements on speed and certainty of sale

Our summary of recommendations is as follows:

Recommended listing price grid

Movewise can help you get to this listing price and some consideration should be given to the pricing bands of the portals to ensure you capture the eyeballs of the hungriest buyers who will have set alerts and filters by price category.

Number of estate agents

The key to selling a property for its full price is getting as many interested parties looking at it as possible. This can rarely be achieved with one estate agent, as agents are motivated to increase the certainty of sale achieved (commission for them), not the price achieved. This is because they typically only sell half of what they list (at best).

Price too low with one agent and you’ll never know you got a fair price

If you price your property too low and get lots of offers, your agent has little incentive to work them into a frenzy and get you the best price. Once you’ve agreed a deal they’ll just help you close it. However if you have more than one agent and your price is too low the other agent will deliver a lot of competing bids. So the only way to ensure you're achieving a full price is to have the flexibility to use more than one agent. See our article on sole or multiple agents.

How to achieve a fair price

Since Movewise doesn’t mind which agent sells your property, we can keep them honest about the price a buyer is offering. You should not be lowering your price with one agent as you are then stuck and cannot see truthfully whether you are getting that competitive tension. Whilst we cannot find buyers who will overpay for your property, we can provide that tension and deliver a strategy that ensures you achieve the full and fair price at the time you are selling. Here’s how we do that.

Movewise sales strategy

Phase 1: Fresh to market

List with the most active agent first for 3-4 weeks allowing them to work their applicant list. This gives the agent enough time to respond to all the enquiries from your listing on the portals and to call all their known applicants. They'll be most motivated at this point. Here we can see the response to the fresh listing and compare versus expectations and vendor requirements.

Phase 2: Another agent, no price drop

List with a second agent online. In some cases, particularly higher-value properties, it may be worth considering a third agent offline. Consider dropping the first agent if they were deemed ineffective. In this phase we are ensuring that the property is listed with the best agents in the area. We will also consider alternative sources such as buying agents.

Phase 3: Single price drop

Here we are testing the impact of a single price reduction with the multiple agents listed. We will encourage the agents to get bids at any level without further price reduction. Having more than one agent at this point will keep the competitive tension in your sale.

Phase 4: “Road to sale”

Here we can discuss a time period and price drop steps to ensure that we deliver you a sale in the timeframe you need.

We are happy the property is listed with the best agents in a mix of on and offline marketing. If bids have not been forthcoming but viewings have been generated by the prior phases it means we need to work the property down to the point at which it gets bids from ideally two or more agents. The competitive tension will result in competing bids, ensuring the property does not undersell but giving the vendor certainty they will get a bid. To do this we pre-agree:

  • Size of price reduction steps (in £000)
  • Time at each level (3-4 weeks+)

This should ensure that all vendors have a path to a sale. If you wish to pull out at any stage that is entirely up to you. But Movewise has a strategy to get all vendors a fair market bid at that time. Here's how our clients perform with this strategy.

We must note that every property is different and vendors' goals can differ. However the underlying strategy of selling a property remains the same: create as much demand as possible and put the property in front of as many willing buyers as possible. The fair price will be set by the market at that time but you cannot achieve a full price if you are marketed poorly or only to a narrow pool of buyers.

We will continue to refine and develop our strategy over time and I would welcome your thoughts and ideas.

Kind regards,

Tom Scarborough, CEO

Terminology

“Offers in excess of” doesn't add any value

Most will choose a straightforward listing price. However, some vendors will add in the words “OIEO” which means “Offers in excess of”. We don’t think this adds any value at all other than putting off buyers who think they won’t be able to negotiate a good deal. Their bid could well be the one you need to push another’s over the listing price. We have seen plenty of cases where a buyer bids below the list price, only to end up in competition with another buyer and then end up bidding in excess of the list price.

Sold subject to contract

“Sold subject to contract” (“SSTC”) is the same as “Under Offer”. It means the property has received an offer and the vendor is working with that buyer towards completing a sale. Properties can be SSTC for 2-3 months depending on the chain, sale complexity, buyers financing, due diligence or conveyancer effectiveness. Around one third of properties under offer will fail to complete.

Sales progression

When a property is SSTC estate agents and conveyancers say the property is in “sales progression”. Some estate agents have dedicated teams and do a very good job of pushing sales through to completion. Most see it as an overhead and don’t bother doing anything at all.

Conveyancers

Solicitors are trained in a wide range of legal areas, although they may choose to specialise in a particular field. Conveyancers are not fully trained solicitors but are specifically qualified to handle property transactions. See our article on choosing a solicitor for more information.

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