Sellers Sticking Out for High Prices ‘Hinder’ Housing MarketMake Text Bigger
Estate agents are blaming sellers asking unrealistic prices for their homes as one of the reasons for a flatlining housing market.
Pointing the finger at sellers is unfair as they are probably pricing their home on the figure they need to break even from a deal.
Many maxed-out their borrowing when house prices were booming at 20% or so above today’s levels.
To clear those mortgages, they need to get the best price possible, and that means setting the figure at the top end of the scale.
Negotiating a selling price is not so much of a financial issue for the agent.
Take a house on the market for an asking price of £200,000. At 1.5% commission, the agent earns £3,000.
Reduce the price to £185,000 and the seller loses £15,000, but the agent picks up just £725 less with commission of £2,275.
That £15,000 is probably a deal breaker for the seller – the difference between having the cash to move and having to stay put.
That throwaway comment from the Royal Institution of Chartered Surveyors shifting blame to sellers does the venerable body more harm than good.
“It is important that vendors are realistic in their pricing if they wish the sale to go through in good time,” said a spokesman.
Estate agents do recognise other factors are affecting the housing market as well like lack of confidence in the job market and mortgage lenders keeping an iron grip on borrowing.
According to RICS, more homes are coming to the market and sales are ‘firm’ with each estate agent selling 15 homes in the month – but high price expectations from sellers is ‘hindering’ the market.
A RICS spokesman said: “While it’s encouraging that sales activity held up relatively well towards the end of the year, continuing problems with the economy and the ongoing instability in the eurozone seem to be weighing heavily on the UK housing market and expectations for the coming months are fairly subdued.
“The increasing number of prospective sellers who placed their homes on the market in December is a positive development as a lack of stock has been a big issue in some parts of the country but with sales expectations remaining flat.”
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