Don’t Let Your Estate Agent Over Value Your Property
Estate agents who routinely over value properties are potentially leaving many homeowners worse off as they can be forced to make huge price cuts in order to sell their property, a new Which? investigation has found. Which? 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 – meaning the initial asking price was reduced by 5% or more before they sold. We calculate that unrealistic and overinflated valuations could be potentially losing sellers as much as £4.3bn, and significantly slowing down the time it takes to sell a property. Find out more: How to choose an estate agent – read our guide Bloated valuations can harm your property profits 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. We compared listing prices with sale prices for more than 370,000 properties sold in the 12 months to September 2016 to see which agents had cut the initial asking price of properties in order to sell them. We found that an estimated one in five (19%) of all properties sold in England and Wales had to be reduced by at least 5% in order to sell, which we classified as ‘heavily reduced’ in value. For 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. We believe that the practice of over inflating the price of a property when it is listed is potentially losing sellers £4.3bn a year. What’s more, this tactic could be slowing down the sale of your home. We found that heavily-reduced properties took on average 64 days longer to sell than all other properties. Which regions saw the most heavy reductions to property prices? There were stark differences in overvaluation across the different regions in England and Wales. In south east England and east of England, only 11% of properties were heavily reduced. In London, 13% of properties were heavily reduced, while 17% were heavily reduced in the south west. However, in both Wales and the north east, more than a third (35%) were heavily reduced. We also found big differences at the local level. For example, in postcode district SA4 (Swansea), 46% of properties listed with estate agent Peter Alan were heavily reduced, compared with just 14% of those sold with another agent, SA Property. Peter Alan told Which? it works ‘in the best interests of its vendors to achieve the best possible price.’ The chart below shows the average number of price reductions for each region in England and Wales along with the how the largest agent in that area performed, and the agents that made the largest and smallest proportion of heavy reductions to property prices.