Mind the gap! Large discounts on asking prices exposed as properties are tracked to Land Registry

An exercise involving the tracking of first asking prices through to sold prices lodged at the Land Registry has shown large gaps.

Altogether 65,384 properties were tracked that were registered at the Land Registry in the 12 months up to this August.

Fast sale firm Property Solvers then compared the actual selling prices with what had been originally asked on Rightmove.

The biggest gap was in south-west London, with £71,178 taken off the original asking price.

All ten of the areas with the largest drops were in or close to London.

There were no areas where the average sold price exactly, or almost exactly, matched the original asking price, but some of the lowest asking to sold reductions were in Wigan (-£3,890), Hull (-£4,258), Doncaster (-£4,705), Sheffield (-£4,884) and Sunderland (-£4,915).

Property Solvers co-founder Ruban Selvanayagam said: “Even the most experienced estate agents are failing to understand the current realities.”

He said that agents who “knowingly state exaggerated valuations at the initial stages” perform a disservice.

Region Average Difference Between Asking and Sold Prices No. of Properties Analysed
South West London -£71,178 575
North West London -£68,840 206
West London -£53,998 243
North London -£37,597 369
Kingston upon Thames -£28,147 641
Harrow -£27,818 260
Slough -£27,584 258
Watford -£25,705 276
Guildford -£25,435 694
Western Central London -£25,268 4

More data broken into local postcodes in England and Wales can be accessed here: https://www.propertysolvers.co.uk/local-house-market-insights/

Property Solvers will be repeating the exercise next month.

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15 Comments

  1. David Clark

    He said that agents who “knowingly state exaggerated valuations at the initial stages” perform a disservice.

    Vendors who ignore advice because they ‘know best’  perform a disconnect with reality that they have to return to if they really want to sell.

    Many agents do overvalue to get instructions, but who turns down an instruction because the seller disagrees on the asking price?

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    1. charlie.wright

      Who would want the cost and time wasted from accepting an instruction from a vendor which won’t srll?

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    2. Mark Walker 2

      It usually went “we’ll try it at YOUR price for 2 weeks to gauge interest and then review it.”  2 weeks later “You’ve had no viewings, so I think we need to reduce the price”.  “But YOU agreed to put it on at that price.” Silently screams into infinity.

      But really most vendors go with the overvaluing agent, of which there’s always 1 or 2 or 3.

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      1. dave_d

        Statistics show that 60% of properties go on to sell with the second agent – so you’re actually better off refusing to put it on at an unrealistic price

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        1. PeeBee

          “Statistics show that 60% of properties go on to sell with the second agent…”
           
          But those “statistics” are one of the 86.12% that are made up, dave_d – and therefore recognised as complete b0ll0cks by the majority of us.

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    3. PeeBee

      “…but who turns down an instruction because the seller disagrees on the asking price?”
       
      I have, Mr Clark.
      Many times more than once.

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  2. undercover agent

    Many initial asking prices are actually the Vendors idea. Agents should be willing to “test the market” for these optimistic vendors (at the agents expense if it’s no sale no fee) because this is the responsible thing to do. Sometimes the property sells for the higher price, proving that agents make mistakes, potentially costing their clients money if they had listed it at the lower price (to earn their fee quickly and without doing much work).

    Agents who seek to list properties cheap (sorry, realistically) are either lazy or delusional, because no one really knows the true price a property might achieve, so to think you do is pure hubris.

    Skilled agents can keep the property looking fresh on the market and lower the price when appropriate.

    Just my opinion. Thumbs up if you agree.

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    1. EAMD172

      Totally agree. I’m more than happy to try it at the vendors’ price for a few weeks. We always put our advice in writing including the fact that we are testing the market at their price for a set period after which we will assess progress and reduce if appropriate. And also yes, sometimes we sell properties for considerably more than any agent valued it. In a rising market that is the norm to test the market, so if you are an agent that continually holds the market back by undervaluing you are definitely doing a disservice to your client. Spending money on marketing and advertising is the job of a full service agent. Ensuring that properties are fully exposed to every potential buyer with top quality details and photos is our job. Otherwise might as well just use a call centre agent. Poor quality High Street Agents annoy me fat more than PB. At least with PB they tell you exactly what you’re getting which is not much. Poor High Street Agents promise much, deliver little and tie people in for long sole agency contracts that are totally one sided, thereby not allowing them to try to get the best price by using another agent as well. Sorry – off on a bit of a tangent

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    2. Abopalula

      I totally disagree that accurate valuation is hubris or laziness – it is possible to get pricing right if you have an in depth understanding of your area and your buyers – my agency and a another good quality local agency routinely report 97% of asking prices achieved. Yes you may sometimes have a punt on an optimistic vendor but in truth if they know more than you then you are in the wrong job brother.

      What is laziness is winning instructions with Disney valuations, tying the client into a Kafkaesque contract and then ‘managing their expectations’ towards your fee.

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  3. Mark Connelly

    Absolute values are utterly meaningless. Selling to asking percentage is the measurement that means something. £70,000 off the asking price is just the sensational pointless nonsense that we can read about in the Daily Mail. It is the same figure quoted as saved on the Middletons flat in Chelsea which had an asking of £1.95 million. So sold for 96.5% of asking. A result in the current market I would suggest.

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    1. undercover agent

      I think it looks like “Fast sale firm Property Solvers” have an agenda that they are seeking to promote, regardless of the actual market realties.  

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  4. surrey1

    That’s nothing. A CW agent local to me listed one at £1.7m that finally sold three agents later at £930k. Got to be a record 😀

     

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  5. SamH

    If a vendor goes with an overvaluing agent then neither are going to walk away happy. All the agent is doing there is buttering the bread for a second agent in and making the on-market touting letters have all the more weight and appeal.

    If an agent gives a fair marketing price but the vendors aren’t realistic, I am all for giving the two week trial. On the condition that they follow your advice on presentation and marketing too.

    Asking prices are like hiring a new employee, you don’t really know how it’s going to go until you try it. But if you have your doubts, it’s crucial to fire fast.

    Low enquiry, low viewings and no or low offers is how you know or don’t that your presentation/marketing/price (its never just about price!) is in the market or not. And this is where you need to judge if you need to fire.

    Firing in this context means either 1. correcting (not reducing, key language) the price/marketing/presentation and aggressively re-marketing or 2. passing your client to an agent who’s happy to work for nothing at the unachievable price.

    There’s well presented, well marketed and well priced stock selling every day for fair fees. Back yourself and your process to get as much of it as possible. There is always a market!

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  6. RedRebel

    Property Solvers clearly have an agenda, however normal agents do not conduct surveys showing the rip off gazundering tactics of of quick sale specialists, so I am surprised that Property Solvers are having a pop! My 9 year old could sell any BMV property so I would hardly call them specialist.I also cannot understand  agents that walk away from a listing unless it is massively inflated by the seller 15/20% over. Why walk away from a lead generator? Every listing provides an opportunity for conversations with the database and an opportunity to create local interest. So many agents have forgotten that agency is ALL about lead gen

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    1. PeeBee

      “So many agents have forgotten that agency is ALL about lead gen”

      And yet there’s hundreds of 000s of vendors out there thinking that Agency is “ALL about” selling their homes for them.

      Funny, that… (insert rolling eyes emoticon)

      Report
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