8 mins read
Figuring out whether you’ve put your house on the market at the right price can be the source of a whole heap of stress for first time sellers. And, ultimately, the market value of your house is whatever someone is willing to pay for it, at that unique point in time. In the UK the value of a property is an intricate combination of factors, so it’s unlikely that you’ll ever get a completely 100% accurate valuation. But, that doesn’t mean you should just accept whatever the internet, or any old estate agent says.
Putting an overpriced property on the market can mean you lose out on potential buyers, and have to drop the asking price in order to attract an offer.
On the other hand a competitively priced property will attract lots of interest, and hopefully several offers.
In this post we examine how you can tell if your home has been overpriced, and what to do about it.
Are estate agent valuations accurate?
No, estate agent valuations are not always accurate.
In part this is because a property’s true value is based on what buyers in the market are willing to pay for it at that very moment. And, that’s pretty hard to give an accurate estimate for.
However, some estate agents are much better at giving an accurate valuation than others. This often relates to their level of local experience. Those who know the area well, and network regularly with buyers in your neighbourhood, will have a much greater grasp on what homes are currently worth.
On the other hand, agents with little local knowledge, nor direct interaction with your community, are unlikely to know confidently the true value of your home. They will focus their assessment on size calculations, which give a general, but not very accurate valuation. (You may even get a better result from an online calculator, than an agent with no local experience.)
Some estate agents will not even try to give an accurate valuation. Rather they will try and produce a figure that will encourage you to work with them. It can be quite enticing if an agent says they may be able to sell your home for more than you thought it was worth.
To make sure you’re getting an accurate valuation from your agent, ask them to provide evidence for their price suggestion. They should be able to show you proof of other properties nearby that have sold recently, and give justifications for why they expect your home to sell for less or more than these homes.
It can also be worth asking your agent for two figures: ‘the best asking price’, and the ‘competitive asking price’. In lieu of a truly accurate valuation - which is very difficult to achieve - this may give you a sense of the sort of range you should be aiming for when you sell your property.
If you’re worried about putting your property on the market at the wrong price, we would also recommend getting valuations from at least three agents. If you’re not sure who’s best to talk to, try this free tool. It’ll show you the best performing agents in your postcode - including the top-rated valuers in your neighbourhood.
Why do estate agents valuations vary so much?
It can be frustrating to have multiple agents come round to value your property, only to find they’ve all said it’s worth something different. Which one are you supposed to pick? There are a few reasons why you might find variation in estate agent valuations. The most common factors include:
- They’re competing for your business
It’s a common tactic, particularly for less reputable agents, to inflate their valuations to encourage home sellers to work with them. The idea is to persuade a home seller that if you work with them you’ll get substantially more for your house, than if you worked with anyone else. This however, is often untrue, and can be ultimately damaging to your sale.
Remember: don’t always go with the agent that gives you the highest valuation - it may not be accurate.
- They have different levels of experience in valuing
Sometimes valuations will vary because agents have different levels of experience. Some agents will be confident taking into account the details of your property’s: location, size, and unique features, alongside knowledge about buyer demand, to come up with a valuation. Others will not realise that period features are rare in your area, or won’t know about the presence of a good school nearby. This variation in local knowledge and experience can lead to quite large differences in valuation.
Make sure you get at least one valuation from a high street agent, so you can get their insight into your local market.
- They have different opinions on the best tactic for selling your property
Each estate agent will have their preferred method for selling a property. Some like to put homes on the market at a higher price, and see whether you can negotiate a middle way with a buyer. Others will prefer to drum up competition by starting with a lower asking price, and encourage interested buyers to bid against each other. Because of this, agents’ valuations are likely to differ depending on their preferred method of selling. Make sure you take the valuation as an opportunity to discuss their marketing methods and selling techniques. This will help you figure out who you’re most comfortable working with.
Ultimately there will be variation among estate agents’ valuations because there isn’t actually an exact value for your house until you see what buyers are willing to pay for it. Agents can simply offer their best estimate based on their wealth of experience and knowledge.
To get the best chance of an accurate valuation, take the time to research the top-performing agents in your neighbourhood. This comparison tool can help you find the top-rated valuers near you.
How do you know if your house is overpriced?
The first sign that your house is overpriced is if you’ve not had any potential buyers come for a viewing within your first two weeks on the market.
The first few weeks that your property is on the market are the most important. It’s during this period that your property will get the most views on online portals like Zoopla, Rightmove, and OnTheMarket. If these views aren’t translating into in-person viewings, something is wrong.
The other telltale signs that your property is overpriced include:
Getting a lot of people coming to see your property, but not receiving any offers
Other houses nearby are selling quickly, and you haven’t yet received an offer
Your asking price is really different from other house prices in your local area
In the most extreme instance, you might find interested buyers are having to drop out of the sale because their mortgage provider has valued your property at less than the amount your buyer offered.
Read more about what to expect from house viewings - and what to do if you’re not getting any - on our blog.
What to do if you think your house is overpriced?
If you think that your property might be over priced, it’s time to take action to ensure you still get the best result in your home sale.
- Get a second opinion
There are lots of high street agents that offer valuations for free. Get them to view your property, and ask directly how they would price it if they wanted it to look competitive in the current market. Make sure they provide evidence. You should expect them to show you at least three examples justifying their valuation (bonus points if they were the agent that sold them).
- Lower your price, but be aware of the consequences
In some cases your only option will be to lower your property’s asking price. But, it’s important to know that successive price reductions can reduce buyer confidence in your home, because buyers will wonder ‘what’s wrong’ with the property that other buyers haven’t thought it was good value for money. However you will have the same issue if a significant amount of time has passed. Properties that have been on the market for a long time become ‘stale’. Ask advice from your estate agent about the best way forward.
- Make changes to your home
Sometimes you can boost the value of your home through renovations and upgrading your decor. This will require some upfront expenditure, but may mean you don’t have to drop your asking price. The renovations will make your property look better value for money. Start by looking at the small cosmetic changes that can boost your home’s value - like repainting, or replacing old furniture. Then think about bigger projects, like tackling damp or subsidence, or upgrading your bathroom. Make sure you get new photos taken once the upgrades have been completed.
- Switch agent
Sometimes changing your agent can give your property sale the boost it needs. However, this only works if your new agency has a different marketing strategy. Before you proceed with the switch, take the time to interview them about their experience and what they would do differently.
For more information about how to go about switching, check out our blog post. To find the top-performing high street agents in your neighbourhood, check out this nifty comparison tool. It uses data to find you the best local agents for your sale.
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