Estate agents over-valuing properties in order to gain an instruction to sell is an unfortunate reality in the Richmond, Twickenham and Teddington property market especially when they know they are in competition with several other agents.
This practice can have serious consequences and can lead to a negative experience for vendors and in the majority of cases cost you money due to you not achieving the maximum price for your property. Let me explain....
Firstly from an Estate Agents perspective there are a couple of reasons for an over valuation one being quite innocent another being far more sinister.
All Estate Agents, Bartlett & Partners included, sometimes very innocently just get it wrong! There is no exact science to valuing a house and there have been many occasions in the past where even after we've done extensive research, know the area and market like the back of our hands but still realise 2 or 3 weeks into the marketing that I've perhaps over egged a property. Remember the only person that can tell you exactly what your house is worth is your buyer when they come along!
What really does annoy us is Agents that use an overvaluation deliberately to gain the instruction. Yes, this definitely goes on here in the Richmond borough and there are quite a few repeat offenders, so beware! The agent will knowingly put 10-20% on his/her valuation and convince the vendor that they can achieve a higher price than the other agents that have been out. This makes the vendor think they can get more if they choose the said agent. They will then tie you into a lengthy contract and 2 to 3 weeks into the marketing call you up to reduce the price.
This strategy will very likely cost you, the vendor, money. The first month of marketing a property is your hot time and more often than not properties, if priced and marketed correctly, will sell in this first month.
The problem with putting the house on at a price that's too high is when you come to reduce it. Unfortunately Rightmove publish the date the house came on the market and if it has been reduced. From a buyers perspective they can see it's been reduced so may then question if there is something wrong with the house or think they can come in with a really low ball offer. At present (early 2023) we find ourselves in a more difficult market, so if you have to start reducing the property it will probably have to be dramatically reduced to bring the pricing in line with the market.
You then find yourself in a position where the final price achieved is far less than what the property could have achieved if it was priced correctly in the first place.
It's absolutely vital you get the price right at the beginning in a market where there is noticeably more supply, and understandable less demand so you take advantage of that hot period.
Not really! Whilst the practice most negatively affects sellers, it won't help out buyers either... see when an estate agent tells a seller that they will achieve a certain figure for their home, the seller understandably believes that it's possible. They then set their onward expectations based on achieving a certain figure, be that their budget for their next purchase, or clearing their mortgage etc. When the reality hits that the market value is 10-20% below their asking price, this will likely cause the seller to reassess whether they make the move or not. Even if they do eventually acclimatise to the realistic value, it takes time, and they will likely reject an offer at the true value based on their unrealistically set expectations. Simply put - nobody wins.
The reality is that there is so much information at the fingertips of every buyer (think Rightmove sold data, nethouseprices, zoopla etc.) that establishing whether or not a property is valued in line with the market is pretty simple. Buyers accidentally paying too much for a home simply doesn't happen anymore.
The good news is there is a solution depending on the contract with your current agent. If you feel your agent has perhaps overvalued your property please feel free to contact our directors Darren or Kristian on 020 8614 1441 for some helpful advice.
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