The guys at Which? are at it again, all over estate agents like a rash for “over valuing” properties so they win instructions to sell them.
Here’s a gem from their latest report:
“Take the experience of one member who put their property on the market in 2011.”
The estate agents’ valuations on their home were spread between £480,000 and £650,000, and they naturally settled for the top one.”
“Despite querying the price with the agent, they were assured that it was an appropriate starting point.”
“However, it took a staggering four years for the property to sell and when it did, it went for £482,000.”
“In that time, they changed agents twice, and the price of the property was reduced several times.”
Which? then goes on to state ‘this isn’t uncommon’ but offers no statistical support. In fact the whole piece is peppered with sweeping generalisations rather than facts and figures.
What does that tell you? For a start, the property owner had done no research of their own or they would have realised the top valuation was wildly optimistic. They must also have been more incentivised to move by ‘cashing in’ on their home than needing to move – maybe they were downsizing? There’s no mention of where the property was situated – rural with no neighbours, urban in a blighted area, or some other unusual circumstance that would have made it difficult to sell.
However, what’s really useful for the industry is that we now have something to show property owners who insist that you market the property at a high price they feel is realistic rather than a guide price you know will draw in buyers much earlier, saving the owners time, frustration, and possibly paying a mortgage on a house they don’t want rather than on one they do.
There can be no better support for your argument than waving a copy of the report from the consumer ‘bible’ under the noses of difficult vendors.
Which? states that nearly one in five properties had to be reduced by five per cent to sell. That’s not a problem for those of us who remember when buyers would go straight in with an offer at least 10 per cent under guide price.
A five per cent margin of error on a £300,000 house amounts to £15,000 and for more than 80 per cent of vendors, as Which? points out, that pain is an unlikely outcome. How many vendors actually got more than the guide price, a not uncommon scenario? The Which? research doesn’t seem to have gone that far but maybe it should.
Which? has always been critical of agents and the way we bump up prices so we earn higher fees. The report shoots that one down by stating that a £20,000 gain in sale price is only worth £200 to the agent. Anyone who suggests that agents drive gazumping just to raise their commission can also be shown the report.
What sensible agent, after all, is going to risk a deal worth possibly thousands of pounds in commission after a huge amount of hard work just to make a couple of hundred if the risk pays off?
*Colin Shairp is Director of Fine and Country Southern Hampshire