Q. Help. I want to sell in order to buy a bigger place, but everyone is talking about falling prices!
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A. Understandably, everyone wants to get the best possible price for their home - but the main reason why prices are falling is that people are still asking too much initially. Indeed, 30% of the properties listed on Rightmove have already had to cut prices.
What’s to be done? Well, at the end of the day what really matters is not the price you can get for your existing property, but the difference between that and what you want to buy. That might sound a bit harsh, but believe me, with prices falling, this is actually the ideal time to trade up to a larger property.
How so? Just to keep the sums easy, let’s say your current home is worth £200,000, while the place you want to buy is valued at £300,000, a difference of £100,000. Now, let’s assume that prices fall by 10%. Your current property is now worth £180,000, but the one you want to buy is only £270,000. The difference has shrunk to £90,000 – and you are potentially £10,000 better off. Voilà!
As for achieving a successful sale in the current market, the key thing you need to do is break the cycle of over-valuation. So, if you price your home realistically – which as we all know is agent-speak for slightly below current market value – you will very quickly get an offer that you can park while you go looking for a place to buy. (And before you protest that I’m just trying to persuade you to let your current property go for a song, let’s not forget that this is taking place against a background of falling prices anyway – so all you will be doing is putting yourself ahead of the game, and therefore in a stronger position!)
One highly effective way of breaking the cycle is to offer your home for sale on the basis of “offers in excess of” a minimum acceptable price. By effectively turning the market on its head, this approach not only helps generate higher levels of interest, but also tends to attract the more serious, committed buyers. Result: you could well find two or more bidding against each other - and end up with a very acceptable price indeed!