Oxstones Investment Club™Have you heard of the doughnut theory? It’s one to keep top of mind when picking a knowledgeable local estate agent to sell your property. Many factors dictate the time it takes to secure an acceptable offer when you put your house or flat on the market with a local estate agent.
These include the area of the country it is in, current market conditions and – most importantly – whether it is has a realistic price, says Belgravia estate agent Best Gapp. But what if you fall victim to the doughnut theory when selling a well-priced home in a desirable residential area?
The doughnut theory explained
Fresh jam doughnuts… Let’s change that to caramel custard doughnuts go on sale the moment the clock strikes noon on Monday. Going back to the days before the government’s proposed Sugar Tax hit the headlines, everyone wanted one and, if priced correctly, say £1 each, they’ll sell like hot cakes!
On Tuesday, the unsold caramel custard doughnuts are still there. They aren’t as fresh as they were the previous day but they’re still OK. And anybody after a sweet treat will still pay the original asking price of £1 for them. Trouble is, not as many people will buy a doughnut on a Tuesday as on a Monday lunchtime.
Wednesday rolls around and the doughnuts have gone a little stale. Nobody would dream of paying £1 for a two-day-old doughnut, so the cake shop owner cuts the asking price to 70p. This attracts a handful of sales, but wait… The baker across the road has just put fresh jam doughnuts on sale at 95p. Who’d now be interested in three-day-old doughnuts?
The doughnut theory and the property market
When the price of a residential property in central London is too high and it has been on the market for longer than the 4-6 weeks it normally takes to attract an offer close to the asking price, says local estate agent LDG, potential buyers looking for properties online will instinctively scroll on by – especially if the images aren’t appealing or haven’t been refreshed to suit the season.
Any buyer searching for property in June, for example, who comes across a house for sale which features images that have been shot in the winter time will know it has been on the market for at least four months, if not longer.
We have a good record of securing acceptable offers three or four weeks after a property goes on the market, says Garton Jones Westminster Estate Agents.But on the rare occasions it takes longer to sell a property, we take care to ensure the images of the home that appear online and in printed sales brochures are in line with the current season.
If the images that property hunters see when looking for homes online fail to attract their attention there is a high chance they will not click on the listing, let alone pick up the phone to arrange a viewing.
Do the images used to market your property meet with your approval? When searching for a local estate agent to handle the sale of your flat or house, the commission they charge should not be the only factor to influence your decision of whether to use them or not.
To prevent your property sale going sale be sure to check out how they achieve sales at or above the asking price – and how long properties they sell are on the market. Other things to look out for is an agent with local market knowledge, a recognisable brand in your area (this can be tested by seeing whether they have For Sale boards on display near your property) and a prominent high street office.
It is also wise to beware of estate agents that employ sales staff on commission to get listings because they are more likely to overvalue a property, forcing the seller to reduce the asking price at a later date.
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