After Doncaster was negatively highlighted in the national press as the fourth worst place in the UK for property price reductions we decided to crunch the numbers and see why Doncaster appears so high in the list. As we explained in our blog here: http://galleyproperties.co.uk/doncaster-named-place-biggest-property-drop/ at Galley Properties we don’t see many significant price reductions. Last year we achieved over 97% of asking prices and we thought it very strange Doncaster was so high on the list. We took a look at the 300 worst properties for price reductions on 8th November 2018 and we analysed the results to try to pinpoint the reason behind it.
How to see which agents overprice on Zoopla:
When you search for sales properties on Zoopla they will appear in order of ‘Most Recent’. Simply changing the order to ‘Most Reduced’ will rank the properties by the biggest price reductions. Naturally some properties will need to be reduced in price at no fault of the agent or seller, but when you rank properties in this way you will see which agents consistently reduce prices over and over. By ranking the agents that reduce so frequently and by large amounts you can get a live snapshot of which agents are overpricing and therefore needing to constantly reduce asking prices. All of this information is available to the public and in no way hidden should anyone wish to search it out in this way.
A snapshot of the live data for the 300 properties with the biggest price reductions in Doncaster was analysed on 8th November 2018 and this is what Zoopla rankings told us:
It’s always nice to hear that your home is worth more than you thought. Estate agents often play on this emotion to win your business by telling you that your property is worth more than it actually is. As a seller, it’s important to remember that a valuation is no guarantee of the price the agent will achieve. Ultimately, price is determined by offer and demand, so the best way to predict price is to look at how much similar properties near yours sold for in the last 6 to 12 months. A good local agent will be able to provide you with relevant comparables for similar properties that recently sold and you can use this factual information to determine your own properties value.
It is best to remove emotion from your own decision about the value of your home because a good sale is often the result of getting the right price from the start. It is a natural instinct for many people looking to sell their property in Doncaster to think it’s a good idea to go to the market with keen and often ambitious asking price. You may think why not test the water and hope for the best but unfortunately selling property isn’t so straight forward and overpricing at the start can actually result in a lower value when your property sells. This was highlighted in a Which? investigation that showed that overpricing of property is costing sellers thousands of pounds. You can read about the Which? investigation in one of our blogs here: http://galleyproperties.co.uk/yorkshire-agents-overprice-cost-sellers/
The Which? 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.” A few years have passed since the investigation published these finding but a simple search on Zoopla shows that the practice of overpricing is still rife in Doncaster.
Shockingly 51.6% of the 300 worst price reductions from the snapshot on 8th November were from just 5 agents. William H Brown were by far the worst with 20.3% of the reductions, followed by the online agent Purple Bricks with 12.6% of the reductions and the top 5 is finished by Your Move with 8.3%, Horton Knights with 5.6% and finally Reeds Rains with 4.6%.
These huge percentages could suggest that overpricing is rife at these agents. If the results of the Which? report is true the people selling their properties with these agents could potentially be losing thousands of pounds. The same report even highlighted William H Brown as one of the worst offenders for overpricing two years ago, this recent snapshot would indicate that that could still be happening to this day.
Interestingly the second worst offender is Purple Bricks. We recently wrote a blog explaining why online agents like this have no incentive to accurately value a property in the first place. This is because they often receive their fee upfront so it makes no difference to them if they sell or not. Read more about why you should avoid paying full fees up front, similar to what most online agents offer, here: http://galleyproperties.co.uk/experts-warn-sellers-avoid-paying-full-fees-upfront/
Overall online agents performed badly for overvaluing in Doncaster. This could be a result of their lack of incentive to price accurately as highlighted in the above blog. Looking at the three largest online agents in Doncaster Purple Bricks, Yopa and emmov actually accounted for a huge 17% or the worst 300 price reductions. This would appear to back up the assertions in the blog that accurate valuations are not always occurring with many of the online estate agent listings.
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.”
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.” Any good agent will have done their homework and will provide market evidence to a seller, it is highly recommended to take this evidence on board and avoid the temptation of an over inflated valuation.
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.