Estate agents inflate prices to win business, according to new report
As competition rises between estate agents, inaccurate valuations are being used to increase business at the expense of vendors, forcing them to reduce their asking prices in order to sell.
To put your house on the market is a big decision – and one that many understandably dread. It’s a gauntlet of hard selling, paperwork and a huge risk of disappointment if no buyers are willing to meet your asking price.
So which route should you go for? It all depends on your timescale. For those who need to sell fast, there’s always the option of property buying companies who will buy any home for cash – a process that is usually much faster and efficient than more traditional routes. For a large percentage of the populace who are unaware of these alternatives, however, estate agents are the only path they know.
For many, estate agents are a necessary evil – ranked within the same brackets as politicians and government ministers in terms of trustworthiness – but are we being taken advantage of by unscrupulous agents when we’re at our most vulnerable? According to a new survey by Nottingham Building Society, in many cases the answer is yes.
When choosing a service provider, we tend to take our business to whoever provides us with the best prices; and who appeals to us on a personal level as trustworthy – and estate agents are no exception. The new survey, however, has painted a rather sad picture of how many of us are taken advantage of when choosing who we sell our property with, as agents make promises regarding sale prices they know they can’t keep.
Across the country, the report has found that 41% of all vendors questioned who had sold a house in the past five years ended up selling for less than their original target – with one in twelve settling for a significantly lower price than originally hoped. Areas such as Yorkshire and Humberside were found to perform even worse, with 57% of respondents settling for lower sale prices than originally promised by their agent.
Nottingham Building Society believes that the problem stems from agents giving inaccurate valuations to gain business, knowing fully well that the quoted price is likely to be erroneous. Property selling experts have also noted that an inflated asking price will lead to the house staying on the market for a longer period of time – making potential buyers question the saleability of the property and further reducing the strength of future offers.
“Price is not all that matters when you are selling your house,” says Su Snaith, Head of Estate Agency at The Nottingham, “but it can be absolutely vital if you are relying on a certain price for your next purchase, which means realistic valuations are essential.”