There is a growing trend in the Driffield area for the pricing of property with ‘Offers Over’ or ‘Guide Price’ as the prefix so we thought we would do some research into the merits of this type of pricing and give our view on whether it is in the seller’s best interest to use it.
One local agent is listing the majority (currently around 94%) of new instructions with the ‘offers over’ prefix, so it would seem like this is popular with sellers. Why is this? Probably because the ‘valuer’ is pushing it as the key to getting the best price. Start low and go up is something that sounds good in principle but you need to have more than one person interested to make it work.
As everyone knows, Dee Atkinson & Harrison are big fans of auctions but we prefer to call an auction, an ‘Auction’ and not disguise it as a private treaty sale! We have recorded the number of properties that have been listed as ‘offers over’ or ‘guide price’ over a nine month period and the results speak for themselves. A shocking *29% of properties listed as ‘Guide Price’ or ‘Offers Over’ sold at or above the quoted bottom price! That means that 71% of sellers who were talked into setting the launch price as a minimum were disappointed - sometimes by large margins.
We are hearing stories of the agent getting ‘very aggressive’ when trying to persuade vendors to accept lower offers. We are also hearing from potential buyers who will not even go and view a property with an ‘offers over’ prefix because they don’t know how much they will have to pay and don’t want to get into a bidding war. They also don’t want to look round a property at the same time as other viewers.
We firmly believe that there is only one winner with this advice and that is the agent. Even those sellers who have achieved a price in excess of the quoted price, might be selling for less than the price they might have achieved if they had started higher. Statistics speak for themselves so our advice is; beware! We would love to hear you views or share your experience of whether this worked for you. Please either email us or go to our facebook page and leave a comment.
*statistics taken from rightmove and the land registry on 114 property sales for the period 24/5/16 to 27/04/17.