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'Tis the season for price reductions...

For those who either didn't listen when told that their home wasn't worth what they hoped, or who picked an estate agent which told them what they wanted to hear, now is the last chance to try and correct their mistake to try to get a sale before Christmas.

Many home owners thought that their property was somehow different from all the others when they put it on the market and they could ask more. While some agents and a lot more lenders were still in denial at the start of the year it was clear to most that the good times were over.

The number of homes that were selling each month fell by 25% at the start of 2008 rising to over 50% fewer by the end of the summer and still we could see examples of properties that were being marketed at crazy prices.

Not surprisingly, many are now having to reduce their asking price to attract interest. In a falling market, you have to price ahead of the curve.

Less than 7% are selling

There are still over 850,000 individual properties currently for sale in the UK but with less than 7% selling each month there is huge competition to get the few committed buyers that are able to perform.

These buyers appreciate that they are in the driving seat which is why many employ a buying agent who can negotiate the very best deal.

Around one in ten properties is now quoting a 'revised' guide price with the average reduction being 7%. Better to admit that you got it wrong in the first place and try to communicate that you are serious about selling than continue to ask more than the market can stand.

Vendors who persist in asking too much just look foolish and unlike the good times, when a relaxed seller was prepared to wait and see, these days the stigma of too high a guide price hangs over a sale even though there is nothing necessarily wrong with the home other than an owner who is too ambitious.

Examples of 20%+ price reductions in the last few days include:

Grafton Square in south London which was launched a year ago and where the price has been slashed this week from £1.95m to £1.5m.

Pit Farm holiday complex in the West Country went on the market in March at £2.5m and the guide was cut yesterday to Excess of £2m.

Finally a family home in Holly Park in Finchley was originally marketed at £1.375m when it went on the market. The summer photo suggest that having tried a higher price and failed that to get things going it has been reduced to £1.1m. But will it be enough?

Asking prices are often just too high

Asking prices have fallen by about 5% over the year but often sales are being agreed at between 15% and 20% below these guides. Nothing is achieved by being too ambitious, and in the age of the internet it's all too likely that someone somewhere is making a note of your mistake.