Estate agents overvaluing properties to win instructions is becoming more common, according to new industry research.
A GetAgent survey found that 95% of agents have seen rivals provide what they believe are unrealistic valuations.
Almost nine in 10 (89%) also said they had lost a potential instruction to a competitor offering a higher valuation.
Meanwhile, two-thirds (67%) believe overvaluing to win instructions has become more common over the past year.
A further 28% said the practice had remained broadly unchanged.
The findings highlight the pressure facing agents when competing for new instructions.
According to the survey, 33% believe sellers favouring the highest valuation is the biggest factor behind overvaluing.
Competition between agents was cited by 28%. Meanwhile, 22% pointed to pressure to increase market share.
A further 11% blamed internal listing targets.
The research also found that 89% of agents believe sellers place too much importance on the highest valuation.
Moreover, 95% said initially overvaluing a property could damage a seller’s chances of achieving the best outcome.
Instead, agents believe vendors should look more closely at an agency’s previous sales performance.
A third (33%) said the percentage of asking price achieved should be the most important consideration when selecting an agent.
Meanwhile, 28% pointed to an agent’s track record of selling similar properties locally.
A further 22% identified the average time taken to sell.
Overall, 83% selected one of these three performance measures as something sellers should prioritise when choosing an agent.
“It’s naturally tempting [for the vendor] to choose the agent promising the biggest number,” said Colby Short, co-founder and CEO of GetAgent. “The problem for agents is that this creates an increasingly competitive environment where those providing realistic, evidence-led advice can lose the instruction.”
Comments (4)
It’s non f*****g stop around here, followed by reduced, reduced, reduced every Monday morning from the usual suspects., “tossers”
If we are honest, estate agents are screwing up vendors lives by over valuing. No wonder the profession is held in such poor esteem, and that is being polite. With a 50% failure rate, there cannot be many professions as bad.
Professional conduct should encourage no minimum marketing periods, ZERO weeks, giving vendors the opportunity to move away from agents that advertise on Rightmove and hope for the telephone to ring. They aren’t doing anyone any favours.
The problem is that our industry is still not professionalised. Anyone can walk into a valuation and give a price that makes a vendors eyebrows go up, snake oil salesmen (salespeople). If it were professionalised then vendors would end up with far more concise valuations leaving the decision to instruct to be based on far more meaningful factors
This tactic has been employed for decades. In a rising market it can work but with the market so price sensitive at present, it’s very foolish and plays into the hands of the agent/s that might get the second bite of the apple. Traditionally it’s the larger corporates who are the guilty parties as they are heavily targeted on listing numbers.