Selling a home is a big deal and people tend not to do it very often. Owners decide to sell for all sorts of reasons, but what unites almost everyone is their desire to get the best price in the shortest amount of time. But every seller is slightly different, and is driven by a whole host of needs and desires, all of which have an effect on how they go about selling their home.
Given that no two homes are identical, it’s not surprising that there’s usually some deliberation over their value. Owners naturally put a higher price on their home than the buyer, and it’s only when they can agree that it gets sold. The following information looks at the selling process; from a home first coming onto the market, to the vendor accepting an offer, or not.
Best and final
Where they have a choice, most vendors choose to sell their home to the person who is willing to pay them the most for it. In 2016, the highest offer was an average of £4,400 or 1.8% above the second highest. But while price is important it doesn’t always determine who ends up buying a home. Over the last decade around 1 in 5 vendors decided not to accept the highest offer, a figure which tends to reflect the strength of the housing market.
In a strong market where prices are going up, sellers are most likely to accept the highest offer. Should the sale fall through, there’s likely to be someone else waiting in the wings to step in to match the offer or even pay a little bit more. But during a downturn, the balance of power changes and sellers have to pay much closer attention to the ability of their buyer to complete on their sale. In 2010, at the height of the slowdown, a record 28% of vendors opted not to take the highest offer. Typically this means accepting an offer from a buyer who they feel is a safer t in the face of greater uncertainty.
Most buyers and sellers fail to agree a price, and the strength or weakness of the market actually makes little difference to the chances of two people agreeing a deal. In 2016 two thirds of buyers and sellers failed to agree a price, leaving the vendor to find interest elsewhere. Negotiations typically proceed at a faster pace in stronger markets with buyers in particular acutely aware of the need to complete quickly. Between 2010 and 2016, the time between a buyer making their first offer, and the successful or unsuccessful conclusion of negotiations fell from two weeks to four days.
Just under 45% of all homes that are put up for sale don’t sell, a figure which has steadily fallen as the market has picked up since 2010. Around two thirds of the homes which don’t sell have had an offer accepted on them, which subsequently falls through because either the buyer or the seller decides to pull out and the home isn’t re-marketed. Buyers are most likely to withdraw their offer in weaker markets while sellers are disproportionately likely to pull out in stronger ones. The remaining third of unsold homes are withdrawn from the market without an offer ever being accepted.
The next article will be available on 29 November.