As the Easter sales weekend kicks off, the head of a prominent buying agency says estate agents confuse the true valuation of a home by attaching ‘guide prices’ or by calling for offers ‘in the region of’ or ‘in excess of’.
James Greenwood, managing director of Stacks Property Search and Acquisition, says valuing is an imprecise art at the best of times, and over-valuing can occur for a number of reasons.
“Estate agents can find themselves in a tricky position, trying to win an instruction when competing in some kind of beauty parade. Over valuing may be the only way they can take the instruction” he claims.
“Alternatively, they may be pressurised by the vendor to put the property on the market at a higher price than they would otherwise recommend. The successful agent may then further confuse the situation by marketing the property ‘in the region of..’, ‘in excess of..’, or quoting a ‘guide price’” he adds.
Greenwood then says buyers in the current market should start their search by looking at properties that are on the market at 20 per cent more than their budget.
“If they restrict their search to properties within their price boundaries, they won’t have had a chance to assess properties until the price comes down and falls within their bracket. By that time there will be plenty of buyers ahead of the game” he advises.
He then tells purchasers to “ask the agent how a value was arrived at” adding that they would be amazed at how often an agent bases an asking price on what the vendor wants.
Greenwood therefore recommends buyers try to engage directly with the vendor to try to establish the circumstances behind the sale.
“The best way of gaining useful information is to engage the vendor in conversation or to try and glean something helpful from the agent. There will of course be some reluctance to furnish you with all the crucial facts” claims Greenwood - who says those crucial facts include the length of time a property has been on the market, whether there have already been price reductions, and how much interest there has been.