With any buyer’s market comes, by very definition, heightened competition amongst vendors. And it’s a battleground out there right now.
The days when even “ambitiously” priced properties with a blight or two were provoking a Pamplona-style running of the bulls are long gone; “realism” is the new watchword, and agents are having to work like matadors to tame flighty purchasers and ride those deals until they’re done.
Often, it doesn’t work out.
Unlike price movements, withdrawals are under-reported, but the proportion of properties quietly disappearing from the listings is arguably a much better indicator of the current climate.
These figures show that high numbers of sellers in the capital have been choosing to withdraw rather than accept a lower price. According to LonRes, rates peaked in prime fringe markets in Q4 2017, with 62% of properties taken off the market due to a withdrawal rather than a sale. In PCL and Prime London, they peaked last summer at more than 60%, before falling back slightly in Q4 2017 to 54% and 57% respectively (thereby hinting at an improving picture).
Some owners – especially in PCL – can afford to wait things out until conditions recover. Others cannot, and unsold instructions will generally either end up on the rental pile or needing to somehow be relaunched, in the hope that a few months will have seen a refreshing of the buyer pool – or perhaps more accurately, puddle.
Whether they’ve previously lingered without a sniff, or recently fallen out of bed, simply sticking a property back up again for the same price, with the same photos depicting an incongruous wintry scene, will probably not result in a big queue at the door. Get it right though, and frenzies have been known to result.
One dramatic example of this happened in Chelsea earlier this year, as regular readers will be aware.
The market for 11,000 square foot super-homes is niche at the best of times, but after three years on the market in officially the hardest-hit area of PCL, Cresswell House (pictured below) had started to look like part of the furniture, and – at £37.5m – an expensive part at that.
Instructing some of the top agents in PCL to relaunch at the heavily reduced price of £20.95m more than did the trick, however, and 50 viewings were booked in before the door was even reopened. As we later heard, a buyer went on to exchange contracts within 24 hours.
An extreme case perhaps, but how are London’s top agents advising clients generally on repackaging their unsold luxury homes for a new audience?
Harvey Cyzer, Head of Knight Frank’s Mayfair office, suggests going under-the-radar right off the bat: “In the event of re-launching a property to the market, we would usually advise for it to be made available off-market for a period of around four weeks. This period of time is very useful when it comes to assessing the price prior to the official launch of the property to the wider market. It also provides an opportunity for us to reach out to the top tier of our buyer database, whilst the property is still being marketed on an exclusive basis.
“If the client is then happy to do so, the property will be launched openly on the market and in the majority of cases a carefully devised marketing and PR strategy will be in place, which will have activity scheduled for the next four to six months.
Make sure you have very clear plan of action if you take this approach, he adds, or you can risk putting off potential buyers: “When it comes to a property that has been available off-market, it is critical to remember that you only have one chance to re-launch the property to the open market, so you must get it right. It is essential that a strategic plan is in place as a confused strategy can be detrimental to the entire process and may deter prospective buyers.
“Pricing that reflects market conditions is extremely important in this case as it will have an huge impact on how well the launch is received. It also determines how successfully the first few days and weeks of marketing the property play out which can be critical to a successful re-launch.”
Giles Cook, Head of Residential Agency at Best Gapp, agrees that taking a clean break from the open market can provide some crucial space to reassess a sales strategy: “If a property is struggling to attract interest (or more importantly offers), then it is definitely worth removing it from all media and assessing what specifically needs to be done in order to improve its saleability, based on the feedback from viewers. This applies in the main to properties that have lingered on the market for more than 12 months, and have had one or even two price reductions.
He advises clients to “redecorate certain rooms and/or the exterior if it’s a house, de-clutter, change or clean carpets to give them a lift, rent furniture for an initial period of three months if it’s a vacant property. Then take new images (especially as photographs can easily date a property) and plan a re-launch at an appropriate time in the calendar year.
“Vendors must accept that properties are taking longer to sell and that in most cases, it is still a buyer’s market.”
Marc Schneiderman of Arlington Residential also recommends some lengthy time out, followed by a complete rebrand: “In my experience, the key to relaunching a property that has failed to sell is to give that property, as best as one can, an entirely new image in the market place. This usually means changing the originally quoted asking price, the originally appointed agent/agents and using new photography and marketing material.
“As agents we are hoping that buyers do not immediately associate the property as one that has been on the market previously and failed to sell. In order for this approach to be effective, it is important that the property is withdrawn from the market prior to its relaunch. This period of time is essential. Depending on the circumstances of the sale we would usually allow a minimum of several months before relaunching a property for sale.”
A fresh new look is key, concurs Martin Bikhit, Managing Director at Kay & Co: “When we re-launch a prime property, we ensure that it is refreshed, new photography is taken and the marketing collateral is fully updated with a new look. In addition, we will implement a fully focused marketing and PR campaign which reaches the right audiences. It is very important to understand the target audience and tailor the sales approach accordingly.”
The springtime is the perfect time to relaunch a property, often ones that are withdrawn at the end of the year
Picking the right season can significantly increase the chances of a clients’ success at the second attempt, according to Cory Askew, Area Director at Chestertons: “The springtime is the perfect time to relaunch a property, often ones that are withdrawn at the end of the year. Daylight and weather both have a hugely positive impact on a buyer’s general disposition and is the natural point in the year when people start planning their lives. The City bonus cycle also hits a crescendo in April, creating excellent conditions for selling.
Buyers have lots more information at their fingertips these days, he adds, and will pick up on lingerers: “If a property has been continuously marketed for a long period of time then it is very important to re-visit the pricing and adjust accordingly. Buyers are sophisticated and will notice even modest price reductions and it gives a proactive agent an excellent opportunity to re-invigorate any previous viewers or offers. Technical “tweaks” for online optimisation and most importantly, a blast on various streams of social media, all contribute to improving the appearance and prominence of a relaunched property and give it the best possible opportunity.”
And if it really hasn’t worked out, vendors might want to consider employing a fresh pair of eyes, suggests Askew: “If a seller has not had a huge amount of interest in their property and not had a lot of feedback to demonstrate why, then a relaunch with a different agent can often expose a property to a different pool of buyers and therefore increase the probability of selling. In the current market, it is an absolute necessity to employ a tenacious, proactive agent who can cast a wide net, both locally and globally and not just list a property online and wait for the phone to ring.”
Unless there are unforeseen circumstances, or if the buyer has a basement flat with no windows, on the M25, a property that is marketed at the correct price, with the right agent and good photos, will sell
In cases when a property simply hasn’t sold, something’s almost definitely gone wrong with the pricing to start with, adds Victoria Farrar, Development Sales Manager at Cushman & Wakefield: “If a property is placed on the market at an inflated value and therefore doesn’t sell, then it needs to be relaunched. The best thing is to withdraw it from the market as quickly as possible; if a seller is tied into a certain period with an agency then they need to negotiate with them and say that they do not wish them to advertise it any longer. They will have wrongly advised the seller from the get-go as, unless there are unforeseen circumstances, or if the buyer has a basement flat with no windows, on the M25, a property that is marketed at the correct price, with the right agent and good photos, will sell.
“The seller then needs to pick an agency who understands the area and gives honest advise. The seller should have it off the market for a minimum of two weeks in which time they should arrange to de-clutter and get new photos done. Do not buy, even when offered, the old photos from the previous agency. The seller needs their home to look fresh and for this it needs new photos, a new description and a new marketing agent.
“The property needs to be priced at a price that the seller would be willing to sell it at to encourage as many people through the doors as possible. The first few weeks are vital as a property is going to sell, it should do within six weeks of marketing; after this it becomes stale and people wonder what is wrong with it.
“The two best times of the year to sell a home are March and September where we see a spike in people registering to buy.”
In cases where a property is being relaunched after a deal has fallen through, bringing in a new agent on a joint basis can often be a shrewd move, suggests Christian Warman of Tedworth Property: “The agent should call through any other interest they had in the property but after that they will be relying on new enquiries so I would suggest instructing another agent, probably as a joint agent alongside the existing agent. That way continuity is kept, but a competitive element is introduced between the agents, plus to the new agent the property is a fresh, new exciting instruction, not the same old one that may have brought bad luck.
“I would suggest a different profile of agent too – two large companies essentially bring the same thing to the table – their internal network. Instruct a local independent agent for whom selling your property means so much more and they will also use their independent global network of introducers, intermediaries and relocation agents to them to work jointly with a large company, gives you the best of both worlds.”
Not every vendor wants to hear the harsh truth about why their beloved home simply hasn’t appealed; inclement market conditions are often blamed for everything, but as the case studies below prove, there is very little that can’t be achieved with some good old-fashioned expert advice and a healthy dose of realism…
Case Study 1
Christian Warman, director of Tedworth Property, talks us through the successful relaunching of an apartment in Knightsbridge…
We relaunched a property at Royal Court House in January, which had previously been on the market with another agent for seven months: we were asked to give our advice because of our track record and experience. We asked and listened intently to the client as to the reasons why it hadn’t sold. Presentation was one, price was another. Brexit, the market and stamp duty were further reasons. We couldn’t do much about the final three reasons, but we dug a little deeper on the first two.
Presentation: The client had no appetite to refurbish the flat despite feedback being that it was a little dated and also that the third bedroom was too small. The third ‘bedroom’ was actually laid out as an office with a rather functional desk, office chair and metal filing cabinet. We suggested this be presented as a proper third bedroom instead. We organised the removal of the office furniture, then organised the delivery of a bed, side table and bedding and by the time we had finished making the bed with duvets and pillows it was a rather appealing double bedroom. Sure enough, the feedback on subsequent viewings made no reference to the third bedroom being too small. Buyers commented on it being a proper bedroom and suitable for guests with the shower-room just over the landing.
Price: We scoured the market for comparable sales, percentage price changes, transaction levels and again took into account the condition. We analysed and presented our findings to the client – we gave him lower, middle, and upper price ranges which, although lower than he had been asking were in line with his expectations. We relaunched and rather than waiting for the phone to ring, we called buyers and buying agents and persuaded them to view. One such buying agent had previewed the flat seven months previously and had ruled it out and rather forgotten about it, but had some new clients and when we reminded her about the flat she put it to them. On the viewing she commented ‘this bedroom is much bigger than I remember’ and sure enough this led to an offer and subsequent exchange.
During the relaunch process we ran a PR campaign and commissioned new seasonal photography (although January is not the most photogenic of months, the photos were at least current) showing it as a ‘new instruction’ rather than showcasing last summer’s blooms. We also conducted an open-house of buying agents who had either never seen the flat before or who wanted to be reminded of it as many had ruled it out on price and perceived lack of third bedroom when it was initially launched. We re-worded the description, used a different main photo for the portals and generally made it seem as close to a new instruction as possible.
The property exchanged contracts in late February and completed last week.
Case Study 2
Jamie Hope, Managing Director at Maskells, with an example of how undercutting the market can work…
We were instructed to sell a house on Essex Villas in Kensington on behalf of the executors, with proceeds going to charity.
Various agents advised on value and our instructions were to come to the market at OIEO £4m. This was a very complicated sale as the house was on a 37 year lease which would cost a figure significantly in excess of £1m to enfranchise. The house required significant works and should the incoming purchaser want to add square footage (basement possibly but certainly a mansard), then a premium of 50% of the uplift would be paid to the Phillimore Estate. Lots of moving parts and variables that could not be known until the house was bought. (The house is also post-war which means that even on a freehold basis, it is hard to value as there is very little comparable evidence on such a prime address).
We came to the market and although viewing levels were high, it appeared that these variables were putting most purchasers off. Feedback was that market expectations were lower than the asking price and that value might be closer to £3m. There was one particular party that expressed interest and an offer was accepted in excess of £3m. After some months of conveyance, the buyer attempted to chip, stating market jitters and SDLT etc. etc. as an excuse. He then pulled out totally. The process had dragged on so long that the charities decided they wanted a quick sale at the highest possible price. It was clear that value was circa £3m. My advice was to undercut the market to guarantee a sale, whilst ensuring we attract competitive bidding. Rather than ask £3.25m or £3m, I advised offers in excess of £2.5m for the relaunch. 51 viewings in 3 weeks and we had 10 people in a competitive bidding scenario. Much to the delight of the client, 3 bids were over £3m and the sale successfully exchanged and completed. Client very happy and a relaunch success story.
This sale transacted this year and the re-launch was purely price driven. Changing photos would have made no difference. If however it is a lovely family home, refreshing photos can make the difference and timing is crucial.
Case Study 3
Arlington’s Marc Schneiderman explains how consistency and simplicity played a key role in selling an ‘over-exposed’ house in St John’s Wood last year…
The property had been on the market with multiple agents for nearly a year and failed to sell.
It was clear the house was over exposed, being listed multiple times with numerous agents on the same websites and with adverts being duplicated by different agents in the same editions of the same publications. Different images were being used by different agents and in some instances, different prices were being quoted. Complete inconsistency resulting in mixed messages to buyers.
The owner was a long standing client and we informed him that for a £6m house, we needed both consistency and to create an element of exclusivity in its marketing.
As a result Arlington Residential was appointed as the sole agent. We had the house re-photographed using ‘twilight’ exterior images and the asking price was adjusted. The house was withdrawn from all property portals and, after a period of time, we relaunched it to the market. A buyer was found two weeks after the relaunch and our client was delighted.