Nick Garrett

nick@huttonsandpartners.com

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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.

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An article by The Times (link below) found the largest estate agents are the worst offenders.

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So what happens next?

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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.”

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Shock!

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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.

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What is the agent’s market data to support their valuation?

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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

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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.

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Look out!

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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.

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DANGERS of overvaluing a property:

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-      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

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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

‍nick@huttonsandpartners.com

‍07716 536 870