Here’s a little secret about estate agency: it’s not sales that are the most important thing, it’s having a healthy register of available properties. The benefit for an agent is this generates enquiries & leads for other properties they’re trying to sell, and gives them market share to boast about.
An article by The Times (link below) found the largest estate agents are the worst offenders.
So what happens next?
It’s simple: you receive a call from your agent 4-5 weeks into your property being on the market, telling you: “We’re not getting any bites, Mr Smith. We’re going to need to drop the price.”
Shock!
This was the agent’s intention from the beginning. They’ve preyed upon your desire to get more money for your home, and thereby gained a monopoly on your property. The agent can now advertise it at its reduced (and realistic) price. Who benefits from this practice? The estate agent.
What is the agent’s market data to support their valuation?
Ask your agent why they believe your home to be worth more than recently sold properties in the area? Note: “sold” properties, not “for sale” properties. I could market my own home for £1m. Spoiler alert: I won’t get it
Overvaluing properties to get them on the market is a low-skill, unethical and yet highly-effective method. Agents are simply ‘buying the listing.’ It preys on people’s understandable desire to get the most for their home. Don’t forget: we’re all emotionally tied to our homes. We overlook the flaws, and overvalue the strengths.
Look out!
Ironically, instead of getting more money, overpricing usually stigmatises a property. Research shows overpriced homes eventually sell for less than fairly priced ones! When a property lingers on the market, buyers question what’s wrong with it.
- Ultimately, a lower price achieved, after months of lost momentum and wasted time
- Not everyone wants to haggle – buyers will be put off by the price, and look elsewhere
- Fewer viewers means fewer opportunities for someone to fall in love with your home
- Mortgage lenders will not accept the high price, since there are no comparable prices achieved: your buyer will struggle to obtain a mortgage / force you to renegotiate to a lower agreed price
- Your buyer tries to gazunder the deal (renegotiate their offer) at the last minute, as they feel they’re overpaying
- You risk losing the dream home you want to buy
- Frustration & hassle of maintaining a tidy home for fruitless viewings over many months
- The market may change for the worse, and you miss your chance to secure a good price
If you or anyone you know are looking to sell now or, in the near future, please tell them to speak to us for honest & transparent advice
07716 536 870