Published: 29/03/2021Why asking an unrealistic price can delay and derail the sale or letting London property.
If you're considering putting your property on the market, there is one crucial thing to remember. Some estate agents inflate valuations to secure the instruction. They will say whatever they think you'll want to hear about locking you into a sole agency agreement and then try to convince you to stay with them while lowering the price.
Here are five reasons why inflating the valuation of your property can be costly.
Moving home, especially in a chain, can be a stressful process at the best of times, so starting on the wrong foot with an unrealistic price tag complicates things.
According to consumer watchdog Which? Overvalued properties take up to two months to sell than other properties. In most cases, reality kicks in a month or two later, and the vendor has to drop the price to a more realistic one (often the price they should have initially asked). All overvaluing achieves is a delay.
Puts off buyers
Overvaluing your property results in fewer viewings. Information about historic property sale prices is available online, making it easy for buyers to know what a property is worth in their desired area. They are savvy, can spot an overpriced property a mile off, and will steer clear.
Buyers tend to filter their online property searches by price, so if the property is on at the wrong price, there's a chance it might not register in their search at all.
It can mess up your next move
If you've found your dream home, made an offer, and it's accepted, all that remains to be done is sell your property. If this is delayed because your price is too high, the owners of your new home may become impatient and drop you for another who is ready to move.
Your mortgage arrangement is threatened
When mortgage lenders calculate the amount you can borrow, they factor in the value of your existing property. So, if an agent promises to get £500,000 for your home, and you wind up dropping to £440,000, it leaves a gaping hole in your finances, rendering all your calculations null and void. You now have to start all over again.
For most people, selling a home is the largest financial transaction of their life. It's essential to go through the process with someone you trust, not someone who has trapped you into a lengthy agreement by deliberately misleading you.
Before you commit to any agent:
- Do your research.
- Ask for word of mouth recommendations.
- Prioritise professionalism and honesty over flashy claims.
At Circa London, we promise to give you honest, expert advice about selling or letting your property. We will show you how we arrived at the property valuation and we will provide evidence to back it up.