10:02am Saturday 28th June 2014
Beware False Prophets
Estate agents who place too high a price on properties for sale could cost owners dear.
ESTATE agents who persuade you to ask too much for your home could end up costing you thousands of pounds.
The worst way to choose an estate agent is to instruct the one that recommends the highest asking price.
In practice, however, this is exactly how some people selling their homes choose their agent.
Estate agents are fully aware of this, and, as a result, many seem to quote inflated asking prices in an attempt to win instructions.
As the market recovers, the practice is becoming far more prevalent.
The problem works like this.
Two firms are asked to value a property worth £100,000.
Agent A values the property correctly and recommends an initial asking price of £105,000 to allow for negotiation.
Agent B knowing he is in competition, recommends an asking price of £120,000 and talks confidently of being able to achieve an offer close to this figure.
The vendor is impressed and agrees to sign a sole-agency agreement with Agent B.
However, not long after the instruction has been won, the owner will be enquiring why there are so few viewings.
With few options, the agent will then begin a carefully planned campaign to persuade the vendor to reduce the asking price.
If he is successful he may well achieve a sale at a figure around £100,000.
In this case his subterfuge will have paid off. If he is unsuccessful he will have lost nothing.
While the agent who over values has nothing to lose, the consequences for the vendor can be extremely serious.
Apart from the wasted time and general inconvenience, there is a real danger that a property that has become stale through over-exposure will end up selling for significantly less than it would have done if it had been sold immediately. The agent who persuades you to ask too much for your property really could cost you thousands not least as the homes that you may have been interested in buying will have increased in value and will cost you more.
There are three things you can do to protect against the consequences of an overvaluation – always research the value of your house by going online and using price index calculators and land registry records.
Secondly, always ask for comparable evidence of homes in the area that have recently sold and lastly keep a look out for similar properties, there asking prices and how quickly they might sell.
For an accurate valuation from experienced valuers call us on 01453 764912.
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