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Has your property ever been overvalued by an estate agent?

estate agents' for sale sign

If an estate agent overvalues your property and you put it on the market for that price, it could be the worst thing you do.

When you’re trying to sell your home, it’s hard to know what price it should go for.

You might get several valuations from estate agents all trying to get your business.

One suggests it can sell your house for a bit more than the others, and you’re delighted – you’re going to end up with much more money than you thought you would, right?

Well, our research suggests that if you go with a higher valuation that’s been overinflated, your property could end up selling for much less and it may take you a lot longer to move.

List for more, get less

Take the experience of one member who put their property on the market in 2011.

The estate agents’ valuations on their home were spread between £480,000 and £650,000, and they naturally settled for the top one.

Despite querying the price with the agent, they were assured that it was an appropriate starting point.

However, it took a staggering four years for the property to sell and when it did, it went for £482,000.

In that time, they changed agents twice, and the price of the property was reduced several times.

The long game

This isn’t uncommon. Our research suggests that nearly one in five properties sold in England and Wales last year had to be reduced by 5% or more in order to sell.

We also found that heavily reduced properties took, on average, up to two months longer to sell than all other properties.

What’s more, while these properties went on the market for £6,000 more than others, on average, they ended up selling for £20,000 less.

Some members we spoke to even missed out on their dream homes because the property they were selling had been overvalued.

Getting the price right

We think it’s your estate agent’s job to get the best price for your property. However, there are several steps you can take to stop being caught out by an overinflated listed price.

Firstly, make sure you get at least three valuations on your home. Then check those against what similar houses in your area have recently sold for.

You can do this by looking at properties that have been ’Sold Subject to Contract‘, or search sites such as Zoopla or Rightmove. These use Land Registry data to show you what houses in your area actually sold for.

Then, once you’ve found an agent, avoid accepting sole-agency agreements with tie-in periods of many months. There’s no reason why an agent should need six months to sell your house.

Have you struggled to sell your house because it was overvalued? Did you lose out because of it?

Comments
Member

When we sold my father-in law’s flat, the prices in the area were controlled and kept low by one estate agent.

From what I remember, the agent promised to sell your property within a month or he would sell it for free. His selling fees were much lower than other agents, he valued properties at well below similar surrounding areas, buyers snapped up cheap properties and prices were kept down.

Member

Would whoever gave me a thumbs down explain themselves please?

We lost money on selling the property as prices were kept low.

Member

All sorted…

The thumb thrasher

Member

Thank you Ian. 👍🏻

Member
A N Agent says:
15 February 2017

As an estate agent I can quite assure readers that estate agents do NOT want overpriced prioperties on their books, taking longer to sell and skewing the local market. I looks like this journalist hads simply number-crunched and come up with a set of figures which do not, in any shape or form take into consideration any comments from either agents or vendors. I know from my own 32 years experience that at least 50% of vendors instantly disagree with agents valuations and insist that their house be marketerd at a higher figure. This is by no means the fault of the agent, who then has to carry the cost of a failed marketing campaign.

Perhaps if the journalist actually spoke to the stakeholders here rather than just crunching numbers the article would have some form of validity. As it is Estate Agents are taking the blame for a situation that is not entirely their fault. It must be said that of course there are some agents that clearly have an overpricing policy but the majority are hard-woking realists.

Member
An Other Agent says:
15 February 2017

Also as an estate agent I would strongly say that SOME estate agents do over value and actually go out intending to over value. A lot comes down to things such as Sole Agency or Sole Selling Rights and also the length of any agreement. A large local agent to us has a 24 week agreement and a two year tie in on a Sole Selling Rights Agreement meaning that they are able to go out and over value as to them it is about market share and working on the principle that boards breed boards, and with the length of the agreement they in theory have no option but to reduce over time. We carried out some analysis at the end of January, this agent has over 370 properties listed of which only 26% were sold, this was the second lowest in the area. I would be really interested in finding out what percentage of the original asking they achieve, that may be something I look into moving forward. As a comparison we achieve 98.46% of the original asking price with a sales pipeline of 46% which is the highest in our area.

I do agree with the point that often vendors do have their own inflated valuation in mind but that is where us as agent have a moral and professional obligation to value the property honestly and use evidence to portray our experienced view.

Member
Peter Hendry says:
15 February 2017

The housing market is inefficient and broken, with prices being forced up beyond most people’s ability to pay. It’s not simply about building more houses to try and balence supply and demand. It’s about making the housing market efficient.

The way to do this is to reform the way in which estate agents operate and this is long overdue.

[Sorry Peter, we don’t allow content that could be promotional on Which? Conversation. Please refer to our Community Guidelines for further info on commenting. Thanks, mods]

Member
Mrs J Roberts says:
15 February 2017

Near where I live are several almost identical two bedroom apartments for sale. They all have the same view, some have been on the market for many months. The newest is priced at £305,000, but the lowest which has been on the market for a while is £219,000.
I cannot decide whether it’s the agents or the sellers who are at fault, surely if a property won’t sell at the lower price, there is no point in asking more.