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Jan 5, 2019

Don’t be a victim of the overvaluation trap!


overvaluation trap(1)

Category: General
Posted by: lannister

 

An ever-present problem in the estate agency industry is the issue of over valuing properties. But why is this?

 

Sometimes it is done by honest mistake; with valuers failing to notice certain issues with the house that may detrimentally affect the value. For example, external factors such as a nearby substation or waste land could alter the value. There could also be internal factors that a valuer may miss, such as a severe damp issue or subsidence. After all, most estate agents are not surveyors and are therefore are not looking for these structural issues if they do not appear obvious, or if you have knowledge of them and omit the information.

 

Sometimes it is lack of experience, or lack of comparable market data that leads to overvaluing. It is much easier for an agent to assess the value of a two-bed terrace that is on a street where half a dozen have sold in the area in the last year than it is to value a new build one of a kind property where there is nothing else quite like it.

 

But there are occasions, especially in a market like this one where there are fewer properties being put up for sale, that agents will overvalue your house to win your business. Be cautious of this- and always get more than one appraisal on your house. It is crucial to do your research and be realistic when it comes to pricing your house, because the longer your house stays on the market the less you will achieve for it. If you receive three valuations and one is significantly higher than the others, then ask yourself why this is.



Before choosing an agent you need to check a few things:

  • How has the agent come to the valuation of your house? Make sure they have used actual sold properties to compare your price to. If they are using data for houses still on the market, then you need to ask why. A house may be for sale for a certain price, but if it isn’t sold then there is no proof it is worth that price.

  • Length of the tie in period in your prospective agents’ contract. A good agent will be confident they can sell your house in a timely matter and will reflect that in their contract. If a contract is for 16-20 weeks, then you are trapped for 4-5 months with that agent- no matter how terrible you think they may be.

  • Check there are no clauses in the contract making it compulsory to drop your price if you haven’t agreed a sale within a certain time period. We have noticed one or two agents slipping this in to their contracts recently, and it is concerning. Why would they need to put this in to their contract if your house is for sale at the right price? Plus, it is your house. You have control over the price of it.

  • Do not be afraid if your house sells quickly. A lot of people are concerned that they have undervalued their house if it sells within the first group of viewings. Don’t be. Despite the lack of properties available to buy, there are lots of buyers waiting. Agreeing a sale quickly is often a sign that the agent knows the local area, knows the pricing structure and is doing a good job for you. Don’t be scared to ask an agent what their average times are in agreeing a sale. If the average is too small or too large, then ask the agent why.

 

Here at Lannister Homes we want to help support you to sell your house. If you are considering selling then get in touch and we will be more than happy to come out and appraise your house for free, and with no obligation.

 

If you do feel that you are stuck in a contract with an agent and you fear that you aren’t getting the right advice then also get in touch with our property gurus, as we still may be able to help get your house sold. We offer a property health check for just £30+VAT where we will review your contract and your property to provide you with a marketing plan that you can take to your agent to help you sell. And if we can get you out of contract with your agent and we can sell your house for you instead then we will deduct this cost from our final fee!

 

It really is that simple. We believe that moving home should be a positive experience as you start a new chapter in your life. Here at Lannister Homes we make the most stressful of times your best of times.

 

 

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