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5 reasons why you should never overvalue your property

Published: 29/03/2021

Why asking an unrealistic price can delay and derail the sale or letting of your property.

If you’re thinking of putting your property on the market, there is one important thing to remember. There are some  estate agents who inflate valuations to secure the instruction. They will say whatever they think you’ll want to hear to lock you into a sole agency agreement and then later try to convince you to stay with them whilst lowering the price.

Here are five reasons why inflating the valuation of your property can be costly.

Delays

Moving home, especially when you are 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 on average up to two months longer to sell than other properties. In most cases, reality kicks in a month or two later, and the vendor ends up having to drop the price to a more realistic one (often the price they should have initially asked). All overvaluing achieves is 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 and 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's 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.

Trust 

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, and prioritise professionalism and honesty, over flashy claims.

Here at Circa London, we promise to give you honest, expert advice about selling your home. We will show you how we arrived at the valuation we give and provide you with evidence of how we arrived at it.

Call us today on 020 3137 7877
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