Mind the gap: open market offers & asking prices decline

There is little more demoralising than launching a property for sale with an agreed guide price, then engaging with buyers who repeatedly want to negotiate. The process of receiving offers, rejecting offers and liaising with estate agents is mentally draining, time consuming and especially frustrating if you need to sell property fast.

Now, with the property market at a crossroads, mounting evidence suggests that buyers are revising the offers they are prepared to make due to affordability constraints, leaving a trail of disappointed sellers in their wake. The warning signs were first seen in 2021, when one estate agent noted a disparity between the average asking price of London’s most luxurious properties, compared to what they eventually sold for.

The staff at Astons discovered there was a 20% gap between the figure that appeared on the property listing and the actual price the seller agreed to accept. Fast forward to 2022, and the difference between the vendor’s expectation and what a purchaser is prepared to pay has started to become a nationwide issue.

In the two weeks after September’s 2022 mini Budget, Rightmove announced there had been an increase in seller’s reducing their asking price. It’s a clear sign that vendors are beginning to temper their expectation as we shift to a situation of more homes for sale than there are buyers.

The property portal also surveyed estate agents in early October 2022 and found more than half (54%) admitted that sellers coming to market now would have to be more open about pricing their homes realistically, or would have to be willing to consider lower offers.

A seller’s choice of estate agent is now crucial to sales success but has it ever crossed your mind that your estate agent is sometimes to blame for low offers? The High Street is driven by estate agents who are motivated solely by commission. This is detrimental in two ways. Firstly, agents can give a tantalisingly high valuation that is designed to flatter and win your business. Secondly is the simple maths: the more they sell your property for, the more the agent earns in commission.

In principle, there is nothing wrong with a commission-led approach to selling property but this method unravels when you head into a buyers’ market, as we are now. An unrealistically high asking price will lead to a cycle of low offer, negotiation, withdrawal of offer and remarketing. The longer this continues, the more a home’s prospects are diminished and the value dented. We have recently written about the increase in fall throughs and relisting properties at heavily discounted prices, which only adds to the developing picture.

At Open Property Group, we believe that the triangle between buyer, seller and estate agent is the root of many frustrations and delays in a buyers’ market. Our process cuts out the estate agent and removes the need to sell on the open market - no more dashed hopes, time wasters, prolonged negotiations or price cutting.

We are professional property buyers and when you sell to us, the triangle of three is reduced to a simple, two-party transaction. We pride ourselves on a straightforward purchase based on our fair 80-85% of market valuation. Open Property Group isn’t in the habit of gazundering (that’s lowering our offer at the very last minute) or messing our sellers about by dithering over a price. Instead, we strive to stick to our first offer and reach an exchange without fuss. You can start a sale to us by requesting a cash offer here, bypassing the entire marketing process for a simple, straightforward sale.