A new Which? investigation (February 2017) into property pricing by estate agents has found that agents who routinely overvalue properties are potentially leaving homeowners much worse off as they could later feel forced to dramatically cut asking prices to secure a sale. Evidence suggests that following a substantial price cut a much lower value is achieved than if the property had been more accurately priced in the first place. Which? Estimates that this could be costing sellers in the UK as much as £4.3billion.
Sellers left thousands of pounds worse off:
The investigation analysed hundreds of thousands of property sales in England and Wales between September 2015 and 2016, and found that one in five properties (19%) had to be heavily reduced by 5% or more before they sold. The findings state that for the UK average: “properties that were not heavily reduced before selling, Which? found that the average listing price was £261,000, before an average sale price of £260,000. For properties that were heavily reduced, the average listing price was £266,000, before an average sale price of £241,000, potentially leaving the seller £20,000 worse off.”
Accurate pricing is important:
This evidence reinforces what Galley Properties always tell our sellers, that an accurate property pricing is vital to securing a sale for the best price in the best time frame. Galley Properties always value based on evidence of what similar properties within the area have sold for and how the property market in that area is performing. As Which? Suggests: “When you want to sell your home, it may be tempting to choose the estate agent that values your property at the highest price. However, the results of our investigation suggest that while it may seem like agents are doing a favour by trying to get more for your home, the property can end up selling for much less than average.”
Accurate valuations save time:
Not only could the agent who overvalues your property cost you thousands of pounds they may also cost you a lot of time. For several years Zoopla statistics show that properties sold by Galley Properties have sold up to three times faster than the Doncaster average. The Galley Properties sales team prides itself on its above average sales times and puts this down in part to the accurate initial property valuation as well as lots of hard work to market properties at their very best.
Teresa Galley explains “from our experience of monitoring the property market in Doncaster we have found that the longer a property sticks around the more a potential buyer will put off or expect a huge reduction in the asking price. Also, if a property has been on the market for a significant time buyers wonder what’s wrong with it. Buyers can also see how long a property has been available, even if listings are refreshed several times, and the longer it has been available the more a buyer will be tempted to put forward a significantly lower offer. A new to market property that is priced right will create a sense of urgency as potential buyer will not want to miss out. A property languishing on the market for a long time not only creates doubt with buyers but gives them several reasons to only make a low offer.”
Is the housing market stalling because of overpricing?
It is not just Which? that highlight the issue of property overpricing and many experts have come forward to voice their opinions. The Independent newspaper (18th February) suggests that “inflated house prices and economic uncertainty has caused the housing market to stall”. The Guardian newspaper (19th February) goes further, when looking into to the latest RightMove report, pointing out that “asking prices in Britain’s housing market rose at the slowest annual rate in almost four years in February as buyers become wary about paying too much”. With suggestions of a market slowdown and indications that many buyers are getting cold feet an accurate valuation is more important than ever, we would even go as far as to say it is crucial.
So who are Yorkshires worst offenders?
The Which? investigation names the agents in each region whom heavily reduce prices to secure a sale. As suggested by the investigation here: http://www.which.co.uk/news/2017/02/estate-agents-who-overprice-properties-costs-sellers-4-3bn/ the worst offenders in Yorkshire are:
The investigation suggests that the two agents who operate within Doncaster significantly reduce prices (by over 5%) for over 25% of properties listed by W H Brown and as much as 50% of properties listed by Whitegates. Please note that these two agents have several branches throughout Yorkshire and the Which? findings look at the Yorkshire and the Humber region as a whole. With significant reductions so common practice many buyers will be left wondering just how realistic their property valuation is.
How to choose a good agent who will value your property accurately:
David Blake, Principal Mortgage Adviser at Which? Mortgage Advisers, says: “When selling your home, make sure your agent can provide evidence of similar sales to back up the valuation. If the valuation is not realistic, you could end up losing thousands of pounds and wasting a lot of time.” Alarm bells should be ringing if an agent gives you an off the cuff valuation when they visit a property. Many agents may have years of experience in valuing properties and know the market inside and out but as a seller we feel it is only reasonable for them to back-up any valuation with hard evidence like we do. Any good agent will have done their homework and will provide this market evidence to you. At the end of the day the evidence suggests that getting the valuation of your property wrong could cost you thousands of pounds so it makes sense to have all the information before choosing an agent.
If you are thinking of selling and want an honest and accurate valuation of your property why not give the Galley Properties team a call on 01302570470 we would love to hear from you and discuss the property market in your area.