Recently, many high street estate agents have come under attack for overvaluing properties in order to attract more stock. In a slow Prime Central London property market, it is easy to see why. Research conducted by The Guardian claimed that some estate agent chains are overvaluing properties by up to 25% in order to get instructions. The Telegraph also commented saying: “home sellers are losing an average of £20,000 because “greedy” estate agents are overvaluing their properties”.
In a quiet property market, with a subdued number of transactions, competition for instructions is fierce. Vendors who think their homes are worth more than they are, may be attracted to agents who suggest the highest price.
While it’s obviously not a practice we engage in at Walton Estates or Keller Williams, we have come across many other agents who are happy to grossly overvalue properties in order to get the instruction. This then leads to the property selling months, or even years later, at a much lower price than it should have.
While certain homeowners may think it is worth taking a punt and that no harm will be done, sellers should be wary of putting their property on at too high a price. If that price is more than 10% higher than what the property is really worth, prospective buyers won’t even bother viewing.
This is usually for one of three reasons. Reason one being that they do not believe the seller is in a hurry to sell. Two, because they think the seller is unrealistic and that it will be a waste of their time. Or three, because they do not believe they will get the best price. Most people like to feel they are getting a good deal or at the very least, equal value for what they are paying for. Nobody likes to feel cheated.
A property makes the biggest impact when it is first launched on the market. This is the time when it goes to the top of the property portals (Rightmove, Zoopla, On the Market etc). This is where almost every house hunter starts their search. You need to ensure that your home stands out and for the right reasons.
If you get the launch wrong by significantly overpricing your property, it will drop down to page three, four, five and be lost in the crowd. If you then cut the price, this information will be recorded on the portals so that everyone can see how overpriced you were to start with. They may take that as their cue to negotiate further reductions. A competitive price from the beginning, on the other hand, is more likely to spark genuine interest, viewings and sensible offers.
HOW DO WE VALUE A PROPERTY?
Here at Walton Estates we have over 18 years of knowledge in the Prime Central London property market. We pride ourselves on providing you with honest and trustworthy advice. We never overvalue a property for the sake of getting an instruction.
When we are asked to conduct a property valuation, we first start by looking at recent sales of similar properties in the area. In a subdued marketplace and with London’s micro markets, finding comparable properties that reflect the true value of your home can be difficult. This is why we also use the most up to date property valuation software, market analysis reports and Lonres PCL property price predictions to gain a faller picture.
We also listen to our clients. While you will often think fondly of your home (and perhaps attribute a price to your memories), you will also have insider knowledge about your neighbours, local plans and future development potential.
For those who are looking to sell their homes, we would suggest looking at the larger picture and going with the sensible option. There is an art to valuing property and some of that has been lost because of people who over promise and under deliver.
If your current property valuation doesn’t line up with the comparables for the area, we would suggest looking to have your property revalued. All the same, if your home has been on the market for some time and you have received little or no interest, this could be because your property has been grossly overvalued.
Remember, everything is saleable, but at the right price.
If you would like us to give you an independent and honest property valuation, please do not hesitate to get in touch.