Why woudl an estate agent over value your property?

choosing an estate agent

Have you just seen a property that seems far too expensive? Think estate agents waltz around making values up? Not exactly.

Agents are often held soley responsible for hikes in the property market. Itís not unusual for people to get fired up if they spot something on Rightmove they consider over-priced and contact the agent in question. How does a property hit the portals at an ingeniously inflated figure? Does this sort of thing make agents and their clients rich?

Agents arenít stupid. Buyers arenít stupid.
The truth is this: a good estate agent will advertise a property at the highest price the market will bear. If the value is too high, it simply wonít sell. If something doesnít sell, the price should be adjusted as soon as possible. There is also a strong chance that an over-valued home wonít attract viewings. Serious buyers donít have time to look at homes they donít want to buy ó everything they are looking at is directly comparable, which means they know the market too.

Those tempting £££s...
What an agent advises a seller to do is not always what the seller decides to do.

A couple of relevant and not entirely usual scenarios might be:
1. Mr Brooks, your estate agent, tells you an acheiveable price range for your property. You tell Mr Brooks to advertise at a much higher price. After all, anyone can be an estate agent. Your property doesn't sell and you end up dropping the price to a more reasonable figure after months of getting nowhere.

2. A charming chap called Mr Shark tells you your home is worth loads more than those other ignorant agents that came. You felt nervous signing something saying his company ONLY could market your home for the next few months, but since Sharksie spoke up, you've been Googling Carribean boltholes....Over the next few weeks' whenever you speak to Sharksie there are no offers, hardly any viewings and you're being told to drop the price. Eight months' later, you sell your £250k flat for £50k less than Mr Shark's original valuation. Which is funny because that's what that other agent, Mr Brooks said it was worth at the beginning.

3. Mr Twit curbs his alloys outside your front door. Inbetween numerous calls on his mobile, he informs you that your home is worth far more than the other agents you've met. Twit isn't able to tell you about any similar properties he's researched or sold and hasn't bought any paperwork over to back up his valuation. He gives you a very cheap fee so you feel you've got a great deal. Fast-forward a couple of months and you're certain your wife will forget about that 'surprise' viewing ó the bathroom was quite misty anyway. Then an offer comes, it's not as good as Twit suggested, but it's the only one. Your wife starts looking at houses. At survey, your home is undervalued and your buyers can no longer buy it. Not only is this very disappointing but your wife certainly won't forget this... Where did you put Mr Brooks's card?

There's really only one outcome ó an over-valued property won't sell. For an estate agency, there is little merit in having properties hanging around as it reflects badly on the business.

Check your home's value, here's how:
Look at what properties similar to yours have sold for in the area and check monthly price rises/falls across the market. You can measure your homeís square footage, look at floor-plans of properties for sale in your area and work out an average price per square foot. Compare properties built around the same time as yours and in the same condition and add value for selling points like long leases, balconies, refitted bathrooms, proximity to train staions and that kind of thing. etc.

Simply put, the property market is a market. Properties only sell at a price that someone is willing to pay. Buyers will be looking at comparable homes and wonít pay more for yours unless itís justifiably superior.