Why Agents overvaluing your property could spell disaster
Estate agents over-valuing properties in order to gain an instruction to sell is an unfortunate reality in the current UK property market especially when they know they are in competition with several other agents.
This practice can have serious consequences and can lead to a negative experience for vendors and in the majority of cases cost you money due to you not achieving the maximum price for your property. Let me explain....
Firstly from an Estate Agents perspective there are a couple of reasons for an over valuation one being quite innocent another being far more sinister.
All Estate Agents, myself included, sometimes very innocently just get it wrong! There is no exact science to valuing a house and there have been many occasions in the past where even after I've done extensive research, know the area and market like the back of my hand but still realise 2 or 3 weeks into the marketing that I've perhaps over egged a property. Remember the only person that can tell you exactly what your house is worth is your buyer when they come along!
What really does annoy me is Agents that use an overvaluation to gain the instruction. Yes, this definitely goes on here in Flintshire and there are quite a few repeat offenders, so beware! The agent will knowingly put 10-15% on his/her valuation and convince the vendor that they can achieve a higher price than the other agents that have been out. This makes the vendor think they can get more if they choose the said agent. They will then tie you into a contract and 3 to 4 weeks into the marketing call you up to reduce the price.
Why this is a very dangerous tactic
This strategy will very likely cost you, the vendor, money. The first month of marketing a property is your hot time and more often than not properties, if priced and marketed correctly, will sell in this first month.
The problem with putting the house on at a price that's too high is when you come to reduce it. Unfortunately Rightmove publish the date the house came on the market and if it has been reduced. From a buyers perspective they can see it's been reduced so may then question if there is something wrong with the house or think they can come in with a really low ball offer. At present (early 2023) we find ourselves in a falling market, so if you have to start reducing the property it will probably have to be dramatically reduced to catch the falling market.
You then find yourself in a position where the final price achieved is far less than what the property could have achieved if it was priced correctly in the first place.
It's absolutely vital you get the price right at the beginning in a market where there is far more supply and less demand so you take advantage of that hot period.
The good news is there is a solution depending on the contract with your current agent. If you feel your agent has perhaps overvalued your property please feel free to talk to us on 01244 836636 or reach out to me personally on this email: ben@keystonepmc.co.uk
Best Regards
Ben Roberts
