Why The highest Valuation is not always the best?
We are all driven my emotion. We all want the best price for our house. Unfortunately, a lot of estate agents know this and deliberately over price your house. It is a low skill highly unethical but an extremely effective method to pray on your, understandable, desire to get the best value for your home.
Why do they overvalue?
The higher the price the more likely someone is to use you. When people look for an estate agent it is usually if they see their board in the local area or they see them all over Zoopla and Rightmove. The more houses for sale the better the estate agents look. If you saw an estate agent with one house or an estate agent with 20 houses currently for sale, who would you consider more reputable?
Once you go with them, you’ll be passed to a sales department and carefully managed for 3 months while they continue to reduce the value of the property until it sells for around market value.
What’s the issue with over valuing?
Not too bad if it finally sells right? Or if for some very lucky reason you get some sucker to pay that much for the property. Well, this approach does several things that are negative to you and the market.
- Firstly, it means that you are caused extra stress and the whole process takes longer than if it was valued properly in the first place. You are constantly doing viewings and getting undue stress and worry that your house isn’t selling. It could mean you miss your dream home as you can’t sell yours.
- Secondly it creates more false valuations in the market and puts undue stress on other people. As an example, if you home goes up for sale 20% overpriced, someone else on the street sees and puts there’s up for that price starting the whole cycle again. See how naughty overpricing is. If the agent values one house at that much, who do you think the other person on the street is going to use?
- Thirdly and something that most people really don’t account for. Even when you do get someone who wants to buy your house at the overvalued price. The banks won’t just take the estate agents word for the valuation. They do their own research and use comparable reports (which your estate agent should be showing you as well). The bank will only lend the money to the value they determine. Which means if you are 20k over what the bank valued the person who put the offer in would have to find a significant amount more than they had planned for to get the house.
What can I do to make sure I have a fair valuation?
You can do lots of things but here are a few simple tips.
- Use an independent local estate agent. Local agents have an in-depth knowledge of the area and are more likely to give more accurate appraisals. The large national chains often have different techniques and less experienced people who get the contract and then pass you onto their sales team never to speak to you again.
- ALWAYS make sure that the agent gives you a comparable report and talks you through recent sales in the area. This way you can see that if no house has sold for anywhere near what they ae saying that you can ask how they came up with that value.
- Get multiple quotes from different agents. That doesn’t mean pick the agent who gives you the highest value. It will just allow you to get a gauge of what the value should be.
- If you think you have been overpriced, you can switch to another estate agent. It is not as hard as you think. Usually, you are tied in for 8-12 weeks. After that it is easy. Don’t use two agents at the same time as there is often something in the contract which means you have to pay extra commission if you do sell.
I hope this helps. At Elliott Sales and Lettings, we are an independent local estate agent who got fed up dealing with subpar agents. That’s not to say that all are. We have worked with some exceptionally good agents in Coventry. We want to make sure that you get the highest but fairest price for your property and ensure that the process is as stress free and easy as possible. Feel free to call us to talk about any of your property needs we are always here to help and guid you through the process.