Developers, builders and investors are your properties taking longer to sell? Perhaps you have had to reduce the price. According to a recent update from Rightmove – “Last month, 36% of properties listed for sale were reduced, which is 5% higher than the 5-year pre-pandemic average for this time of year, and the highest overall number since 2011. The amount sellers have dropped their asking prices by has also gone up, with an average reduction of 6.2% , or by £22,709 based on the national average asking price.“ I have definitely noticed from my own search of Rightmove (at least in my area) that some properties are sticking on the market for longer and some have had at least one price reduction. Whilst there can, of course, be a number of factors as to why a particular property hasn’t sold, it’s undoubtedly the case that, in order to stand out from the competition, your property needs to look its best.
Unsold
As a small developer, builder or investor, if you have a property that remains unsold, this has an undoubted impact on your business.
- Cash flow – quite simply you have no money coming in from that property.
- Finance – if there is outstanding finance on the property then if it remains unsold it’s costing you money.
- It stops you moving on – very often you will need the money in that property in order to proceed with the next project, so if the property isn’t sold it prevents you from progressing.
If properties are taking longer to sell, that’s not good. The longer a property remains on the market the more likely it is that any potential buyer will make a lower offer.
Price Reduction
No one likes a price reduction. When times are tough, it really pays to get your pricing right and to have the right team of professionals around you who can drive the sale through to a successful completion. What you may not be aware of is that your first price reduction generally has to be of an amount that is significant enough to attract buyers’ attention. Any future price reductions will be more gradual. The cost of staging a property for sale is generally likely to be a lot less than the amount of your first price reduction. Even a modest reduction of say 5% compares unfavourably with a ball park budget of 1 to 2% for staging.
Financial Success/ Legacy/Retirement
What is your motivation for the business, what drives you? It might be that you are trying to build a business that enables you to live the lifestyle that you want. It could be that you want a business that you can pass on to future generations to take over or that you can sell and pass on the proceeds. Or you might be trying to establish a fund that will enable you to enjoy a retirement doing all those things that you dreamed of, but we’re never able to do whilst working. In the first scenario your strategy probably includes includes creating a brand and one that carries an element of prestige.
Developing Your Brand
If you are looking to build a business you might want to create a brand. What do I mean by this exactly? I’m not talking about a stream of Identikit properties, but rather some aspect or signature that is common to all the properties you develop, convert or refurbish. What this feature or features might be will obviously vary according to the market that you are looking to serve, but it enables buyers to easily associate that property with your business.
Prestige
Prestige is for me an aspect of the brand. You want to develop a reputation for creating a certain type of property, a particular level of quality. You want to be one of the best – the “go to“. And you might want potential buyers to aspire to live in one of your properties just as people aspire to own a car or item of clothing from a particular company.
Visual Impact
If you are trying to sell the property at a time when properties are taking longer to sell, and there are perhaps more properties on the market for buyers to choose from, then it’s important that your property should stand out and attract the attention of buyers. One thing I noticed if I’m looking on property portals, is that you can often tell when a property is a new build or has been refurbished because it will be completely empty. All the walls will be white and the flooring will be grey. Properties like that aren’t visually appealing. In an age where people are scrolling through Instagram or they’re watching a series on Netflix that features high-end properties, they are used to seeing beautiful images and they have high expectations. If you watch property programs such as Location, Location, Location, you frequently see participants who want absolute perfection. This means that empty properties are more difficult to sell, buyers are looking for the “lifestyle “ or they struggle to visualise.
Marketing
The empty property is a problem for your marketing. Whether, it’s the listing on the property portal, the agents website or a social media post images of empty rooms are, quite frankly, uninteresting. Such images can also be confusing, buyers aren’t sure what they’re looking at. They might struggle with room sizes. If a floor plan gives the dimensions of a room are you able to envisage what those dimensions mean in real life? Furnishing a room gives a sense of scale as well being visually more appealing than an empty property.
Home Staging
Home staging can help with all these issues. The aim of staging a property for sale is quite simply to enable the owner to sell more quickly and to achieve the best possible price. If you are in the business of constructing small developments or one-off builds, converting or refurbishing properties, either as an investor yourself or on behalf of investors, then you may not have heard of home staging, or you may not have thought that it was something that would benefit the type of properties you’re working on. It can work for properties at any level. I have come across instances where the benefit of staging a property was understood, but the owner didn’t proceed because they didn’t have a budget for it. Home staging should always be regarded as an investment rather than a cost and should be allowed for in a budget just as you might include a contingency.
Team
When selling a property, I cannot stress enough how important it is to assemble the right team of professionals around you. That includes your estate agent, your solicitor, and your mortgage advisor/financial advisor. I aim to be part of your team. The earlier the stage I am involved at the happier I am. Yes home stagers are typically instructed at the very end of a project and that’s fine, but being involved at an earlier stage means that we can offer advice that will add value. This could be advising on practicalities such as the positioning of sockets and light switches and finish of fixtures and fittings. I am a team player and I’d like to work as part of your team.
Hands On
I am hands on, which means that I will do everything from working with you to determine the scheme, sourcing furniture, lighting and accessories. In certain cases I can offer a rental service where you can rent inventory from me. I provide a bespoke service which is tailored to each client and each property. If necessary, I can provide bespoke soft furnishings.
Alternatives
There are alternatives of course. You can simply market the property as an empty property. You could do it yourself, but do you really want to, do you have the time is it a good use of your time even if you have the time to do it yourself? You may have an accountant, a VA to undertake your admin or a person or company who undertakes your social media. Utilising the services of a home stager is another example of outsourcing.
Summary
In an uncertain market where properties are taking longer to sell and sellers are reducing their prices it pays to differentiate yourself from the competition. Make the most of the potential in your property and give it the Showhome look. Present your property beautifully and engage a professional photographer specialising in interior photography to make the most of that presentation. If you would like to learn more call me on 07745 876182. I cover the Wirral, Cheshire and North Wales