Latest research from Britain’s favourite online estate agent, eMoov.co.uk, has highlighted the unrealistic asking prices many sellers are listing their property at, when compared to the actual sale price achieved. The average sold price in the UK is currently £207,000*. However when you compare this to the average asking price of properties listed on Rightmove, £281,000, it is evident that there is a disparity of £74,000 between what sellers think they should get and what they actually achieve.
The survey of 2,000 sellers in England and Wales, carried out by eMoov, found that 30% of those selling a property placed getting the highest price as the most important factor in the selling process. This is in stark contrast to the 8% of those surveyed who valued a quick sale as the most important factor.
The research also found that 56% of those surveyed would list their property at a price recommended by their agent, regardless of the market value of that property. 36% would list at a higher price than recommended by their agent and this figure rose to 41% in the capital, where 31% of Londoners stated getting the highest price was of the greatest importance. Less than 5% of those asked said that they would list lower than the price quoted by the agent.
eMoov’s Property Hotspots Index highlighted that the property market, particularly in London, had cooled over the course of 2014. The previous high demand in many areas had led to house prices in England and Wales soaring, with many sellers looking to cash in as a result of a particularly buoyant market. But even as the market begins to cool, those looking to sell are doing so at increasingly unrealistic prices.
It begs the questions that with many high street agents paid on performance, what is the benefit of pricing a seller out of the market? The answer, a high street agent will often overvalue a property on purpose to win the business and get the seller on their books. Motivated by making a percentage fee they will then suggest the seller drops the price when the property fails to sell, as this drop will make a marginal difference to the profit they make.
Founder and CEO of eMoov.co.uk, Russell Quirk, commented: “Unfortunately it’s a common place practice in the high street sector. The agent is driven by a percentage fee so they will overprice a property to try their luck, win the business and increase their profit margins.
Understandably the seller opts for the agent that claims they can get the highest price, as we are all motivated, to some extent, by money. Then as regular as clockwork the agent will ring them a few weeks down the line and “advise” on a lower asking price in order to sell.
Yes, it is in part down to the seller. If someone has it in their head they should achieve x amount, they will list at this regardless of what advice they receive. However as the professional hired to aid the sale, the agent should always provide a realistic, truthful valuation based on what the market at the time dictates.”