Selling in a desirable area: when to hold out
In a strong market the risk is not failing to sell. It is selling too cheaply by accepting the first offer.
Where demand exceeds supply, the balance of power sits with the seller. That changes the pricing strategy: the objective is not to attract attention, which is already there, but to convert interest into competition and to avoid accepting the first reasonable offer.
The mistake sellers make in a strong market is to price conservatively out of caution, which leaves money on the table, or to accept the first offer because it feels like a good outcome.
Pricing in a strong market
In a strong market, a property priced at a realistic value attracts multiple buyers. A property priced slightly below the comparable band attracts more, and the competition frequently pushes the final figure above the band.
- Establish the value from recent sold comparables, and note how quickly those properties sold
- Where comparable properties sold quickly, consider pricing at or slightly below the band
- Do not price above the band in the expectation that demand will carry it, because buyers still compare against evidence
- Set a defined period for offers, so that interest converts into a decision
When to hold out
Holding out is the right decision when the evidence supports a higher figure and you can afford to wait. It is the wrong decision when it is based on hope rather than evidence.
- The offer is below the level supported by sold comparables, and other buyers are still viewing
- The buyer's terms are weak: a long chain, no mortgage agreed, or a solicitor not instructed
- Interest is still increasing, and the property has been marketed for less than three weeks
- The market is rising, and a short delay genuinely improves the outcome
When to accept
The strongest offer is not always the first or the highest. It is the one from the buyer most likely to complete at the price offered, and in a strong market a proceedable buyer at a slightly lower figure may still be the right answer.
The discipline is to set your parameters before offers arrive: the figure below which you will not go, and the terms you require. Deciding in the moment, with a buyer in front of you and an agent encouraging a decision, is how sellers accept less than they intended.
Common questions
- Should I accept the first offer on my house?
- In a strong market, usually not immediately. Where demand exceeds supply, other buyers are likely to be viewing, and accepting the first offer forecloses them. Hold the offer, allow the process to run to a defined point, and compare the terms as well as the price before deciding.
- How do I get the best price in a strong market?
- Price at or slightly below the level supported by recent sold comparables, so that the property appears good value to a wide audience, and manage the resulting interest into a competitive process with a defined end point. Avoid pricing above the evidence, because buyers still compare against what similar properties have sold for.