You just have to watch a programme like the BBC’s Antiques Roadshow to understand people’s disappointment when they are told that the item that they believed was worth millions is in actual fact a worthless copy. Although the programme doesn’t show the aftermath, it goes without saying that some of those who appear on the show undoubtedly walk away muttering to themselves that the antique experts are idiots and don’t know what they are talking about. Much the same occurs when an estate agent values a property. Homeowners know for a ‘fact’ that their property is worth a certain amount and when they are told something different; they simply refuse to believe it.
Perhaps the biggest myth that estate agents need to dispel is that they will deliberately undervalue a property in the hopes of making a quick sale. This of course makes absolutely no sense, given that agents work on a commission basis and earn more if the property is sold at a higher price. For some reason, homeowners will disregard this core truth and put the property on the market at the price that they believe it is worth.
The other myth that plagues good estate agents is that the agency which prices the property at the highest value knows what it is doing and nine times out of ten, will secure the listing. Agents do make mistakes and there have certainly been cases in the past where a property has been undervalued, but this is far less common than most people believe.
It is always a good idea to ask a number of agents to value a property before it is put onto the market. It is, however, not always a good idea to go with the agent who places the highest value on the property; unless that agent can provide evidence as to how they arrived at the inflated figure. Agents may be human but the good ones do not rely on emotion to value a property. They have a number of excellent tools at their disposal which allow them to show sellers how and why they have determined a property’s value. Good agents do not thumb-suck what they believe the property is worth, they back up what they are saying with solid, indisputable facts.
Property statisticians don’t make the facts up as they go along either. These companies take all the sales which have taken place over a certain period in a particular area and average out the selling price in that region. They also list the predominant price range in the suburb. Although sellers may believe that their house is far better than anything else on the market in their area, it is going to have to be pretty special if they are going to convince someone to buy the home if it is not being sold at a market-related price.
It is presently a buyer’s market and at this stage, homeowners should count themselves lucky that buyers are taking the time to come and view their property, never mind actually putting in an offer. There are many, many properties available, many of which are, unfortunately, overpriced.
Generally speaking, a number of things happen when an over-priced property comes onto the market. Agents, like the rest of us, do not want to appear stupid by trying to sell something that they themselves do not believe is worth the money so instead of punting the home, many will simply ignore the listing, choosing instead to show buyers something that is not only valued at the correct price, but which actually offers the buyer good value for money.
The other ‘kiss of death’ for an over-priced home, is that even though a buyer may be able to afford the home, he will overlook the property completely and instead look at other properties which are priced at a more market-related value.
Those who are serious about selling their homes and those who are desperate to dispose of a property need to listen to the estate agent who gives them the most realistic valuation. If three agents set the price roughly within the same parameters, rather take their advice and, tempting as it is, ignore the one who maintains that they can get a far higher price - unless, of course, that agent can put his buyer’s money where his mouth is and produce solid evidence as to why he knows better than everyone else.