A PropTech firm has adopted the unusual position of claiming some agencies deliberately over-value properties in a bid to win instructions.
Agent Software says agents have done this in reponse to challenging market conditions, reduced transaction volumes and increased competition.
"We work with thousands of agents across the country and the feedback we're consistently getting is that in a competitive and challenging market, some agents are overvaluing in order to get the instruction from the vendor" says Heather Staff, co-director of Agent Software.
She says the problems associated with overvaluing properties for vendors are clear - possible reduced buyer interest thanks to a high price could mean a property is left on the market for longer, while the subsequent need to reduce the price could put vendors at a disadvantage when it comes to negotiating.
"These factors combined mean that property sellers whose homes are overvalued could end up selling for significantly less than if the property was marketed at the right asking price from the beginning" explains Staff.
"This scenario represents a financial cost and loss of time for consumers as well as a negative impact on the agent's final commission fee."
She adds that if an increasing number of consumers have the negative experience of an agent overvaluing a property and impacting on the eventual sale, it could damage the industry’s public reputation.
"The vast majority of agents value properties correctly and offer fantastic customer service, but it's those who don't that cause problems for the industry as a whole" says Staff.
She suggests that agents should resist the temptation to follow suit when faced with a competitor who is regularly overvaluing. Instead, they should recognise the value of second instructions, which tend to command a higher fee and sell more quickly.
"Vendors are increasingly aware of their ability to switch, particularly if they feel misled by their existing agent. The key is to keep in touch with them, so that when they do decide to switch, you're front of mind."
Agent Software’s tools for agents include Spectre, an ‘auto-prospecting’ system which processes data on all properties currently on the market within chosen areas and identifies key moments when a vendor is most likely to consider switching from one agent to another.
It also recently launched Hello Again, which allows agents to automate contact with past clients in a bid to estimate future repeat business.