In the last post we started to look at the housing market and how we feel more secure by following the commonly accepted wisdom of the ‘the market’
One of the causes of our inclination to follow the herd when it comes to the housing market is the way we think about the market.
In previous posts we’ve discussed the concept of the “Housing Ladder”.
We strive (or we’re told we should strive!) to climb it – bigger and better. We invest so much time, effort, money and worry trying climb the ladder by moving to larger more expensive houses and by capitalising on the price increases we have enjoyed in our homes.
But the problem about thinking of the market as a ladder is that it leads to us becoming fixated on what is happening to house prices. We worry about them. And this is the reason why we can’t help reading about house prices, talking about house prices.
But should we be as fixated on house prices as we are?
Doesn’t our fixation on prices work against us, particularly when prices are not shooting upwards, by paralysing us with fear?
Think about it.
If prices rise we feel good about it and we are keen to make a move up to the next rung. Buyers are easy to come by and all is good.
But when prices fall or stagnate the story is different. Nobody wants to move, worried that they won’t make as much on their property as they feel they ought to or could have done a few months back.
And if everyone acts in this way the market grinds to a halt.
But what if we think about the market as an escalator and not a ladder?
Those of us that are home owners should think of ourselves as being on the Housing Escalator rather than the Housing Ladder. This escalator can move upwards or downwards in its own right carrying everyone with it.
In other words when house prices move up they move up for everyone – ie the escalator moves upwards taking us with it. And when prices fall they fall for everyone – ie the escalator moves downwards. But relative to each other we all move together.
And this is the really key point here; everyone is moving together on this great big housing escalator and because price rises or falls are all happening to us all we are all keeping our positions on the escalator. And unless you want to get off the escalator completely this should give us all some sort of comfort in uncertain times.
Now that we have challenged our view of the housing market we also need to look at how we make our move up and down the escalator; ie how we sell and buy property.
Selling a house in the UK property market can be an extremely frustrating process as too many people know only too well. But more than that it is a very hit and miss process as well.
Worse still it it’s been this way for a long time and if we all continue to act in a herd-like way it will be this way for a long time to come.
It is like a conspiracy and no-one wants it to change. The Estate Agents generally do just fine the way things are (ok it’s a bit tough for them at the moment), the solicitors do ok, the government collects its taxes and we, the home owners, well we just plod along selling our houses in the same old way.
Think about it – as a seller you are completely reliant on a buyer chancing upon your property amongst all the others that are out there.
So even before the pain of the move has started (i.e. the saga of the negotiation, the surveys , hoping the chain won’t collapse, exchanging contracts and all the rest of it) you are leaving your house sale completely in the hands of fate!
i.e Will the right buyer actually find my property or not?
The way the market works at the moment, if you’re selling you just sit there passively and wait for someone to come and make you an offer!
But what is to say that buyers will find your property amongst all the others? The answer is that it is largely luck. You are being what we call an Accidental Seller.
Think about it; all the houses on the market are being advertised and promoted in much the same way. There is nothing to make any one of them stand out from the others.
What does this matter you say? Houses get sold so surely things must work ok?
Well maybe when the market is buoyant. But what about when things are not so good?
Yes we all use estate agents, but they are passive as well. Sure they will advertise your property in their window, produce a nice brochure and ensure your home ends up on one of the property websites, but all of this is still the same old game – it is waiting for a buyer to take action and to find your property in and amongst all the others they and every other estate agent have on their books.
As sellers we need to think of the market in a different way and more importantly ACT in a different way.
And by this we mean:
- You need to access as many potential buyers as possible and not just those that are actively searching for property at that moment in time but also those who are interested but not active in the market.
- You have to work out from all those potential buyers which ones are more likely to be interested in buying your property.
- You need to begin a conversation with this group of more likely buyers in an attempt to persuade them to make an offer on your home.
If you can do all of these things then you really are becoming proactive and taking control and as such you are much more likely to sell your house.