Have you been looking for a new home for some time? Do you feel priced out of the market for the type of home you need? Well you are not alone. A recent Which? Report analysed over 370,000 property sales in England and Wales.
They found that 19 percent – nearly one in five – had been heavily reduced from the initial asking price.
They concluded that some agents who over estimate a property’s likely selling price were costing their clients about eight percent of the property’s worth; an average of £20,000 according to the study.
The study also found that properties, which had been reduced by more than five percent took an average of 64 days longer to sell than those which were not reduced.
The Which? Report was quoted in the Daily Telegraph this month and it then used property illustrations showing houses whose initial guide prices had been reduced. One by as much as £300,000 on a £950,000 home, which eventually sold for £650,000.
When asked, a number of agents blamed their miscalculations on factors ranging from stamp duty increases which had depressed the London market to the EU Referendum, but Paul Higgins, chief executive at the Homeowners Alliance said: “If an estate agent tells a seller they can get 10 per cent more than other agents for their home, they are likely to choose them.”
It was therefore implied that some estate agents are over-pricing in order to win the business.
Most reputable agents try to get the balance of pricing just right as they appreciate how detrimental it can be to a vendor’s sale if it’s too high, but of course any agent can make a mistake in pricing a property.
However, if you are planning to use an agent who has a lot of reduced properties in their window, then you might want to read the Which? Report more closely.
Tips on judging market appraisals from different agents
- If your gut instinct says the quoted price is too high, it probably is
- Check whether they are quoting recommended guide prices or likely sale prices – there can be a huge difference.
- Has your agent provided comparable properties sold in your specific street – check how long they took to sell and for what price
- Timing is important in selling; check that the agents are prepared to stand by their valuation within YOUR preferred time scale
- If the agent you prefer quotes a high fee, do ask them to revise their fee so you can use their services.
According to Which? an honest agent might save you up to £20,000.
Shona Ford is senior negotiator at Winkworth Marlborough