Unfortunately, over-valuing is a common tactic for Estate Agents.
In order to gain a fee for finding a buyer the agent must first have the available stock. The job of the valuer is to gain that important business and in some cases at any cost. The most successful tricks utilised by agents who cannot compete with skilled competitors who differentiate themselves are to cut their fee (which the agent obviously does not really want to do) or to appeal to your pocket & confidently suggest they have ways to get you more money than other agents may have suggested.
This may sound great to begin with – after all who doesn’t want the potential to get more for their property, however there are several problems with over-valuing your home; the most important are outlined below:
- Over-pricing your home can price the right buyers out of the market; many will overlook your property simply because it is above their budget when searching online.
- Over-priced properties tend to remain unsold for longer, prolonging your next move and other possible transactions if in a chain.
- Properties that remain o the market for over 6 months start to attract negative questions about their condition and many serious buyers will avoid them.
- If your property fails to sell you may be forced to reduce the price. However you will have already missed out on the best chance to get the highest price – when your home was ‘fresh to the market’.
- A reduced price, or worse still successive small reductions in price can provi=oke many uncomfortable questions from buyers and may result in you selling for less than it was actually worth in the first place.
- Mortgage lenders are not impressed by overpriced properties, so even if you do succeed in finding a buyer at a higher price they may face problems with their mortgage application once the home has been surveyed/valued.
A professional estate agent will have considered several important factors when they value your property:
- The location and character of your home
- Its features and condition
- The current market price for other properties in a similar location/condition
- The demand for similar properties in the market
- Projected market trends and conditions
Understanding the current marketplace and trends in the industry provides the best insight into the accurate valuation of your home.
There is no harm in carrying out some research of your own, but be prepared to discuss openly with your agent who should have more information on prices agreed than you can access. This will help you to agree on the price that will sell your property to the right buyers in the shortest possible time – By default meaning you get the highest possible price!