Why do a number of estate agents overvalue houses
When you invite an estate agent to value your home you are asking them to give you a figure to attract the attention of potential buyers. Without the interest there is no chance your property will sell.
However, data shows a large percentage of estate agents are not been honest when delivering what they perceive to be market value. What they are doing instead is overvaluing your property to win the business. It is proven that most sellers choose the agent who flatters them with the highest valuation. After all everyone wants to hear their house is worth as much as someone is willing to tell them. What prospective vendors should do is look at the statistics and service each agent has to offer.
You may ask yourself what are the benefits to the agent adopting this method. Having a For Sale board outside your property is a very cheap form of advertising for the agent concerned. What they will then do after 4 weeks of marketing is make a call asking you to reduce the price because they are not generating the interest. Because there is a tie-in period you have nowhere to go, you want to sell the property so you agree to the reduction, the property sells and the agent cashes in. Do the exercise, if you look online at the percentage of properties which have been reduced, you will be amazed.
Buyers are quick to identify a reduced property and book a viewing. What they are then hoping is you are desperate to sell for whatever reason. They will offer an even lower figure than what you have just reduced to which can be completely demoralising.
Studies actually show that on average a property has to be reduced 5% from its initial asking price to achieve a sale.
Here at FastMove we believe honesty is still the best policy to all our customers. However this will help you understand why we are losing business at the valuation stage, which is immensely frustrating. We see it every day, properties been reduced to prices quoted by our experts from the outset. Ultimately all the vendor is doing is wasting their time for the first 2-3 months of marketing their property.