You’ve ummed and ahhed over the decision and spent countless evenings browsing dream homes on the internet with a glass of wine in-hand. You’ve gone back and forth, asked the opinion of your friends and entire family and now, finally, you’ve made the decision: you’re going to sell your home.
Your first job is to find out how much your home is worth. To do this, you want to invite a number of different estate agents to come and have a look at your place in order to value it, after which you’ve got a decision to make: which agent are you going to list with?
At first glance, your decision seems like an easy one: one of the agents has valued your house £5,000 more than the others, maybe even £10,000 more, so that’s clearly the one you should go with, right?
Why an agent might over-value your home
If you’ve had six agents value your home and five have given very similar valuations while one has quoted something dramatically higher, your spidey-senses should be tingling. You need to ask yourself, why has one agent offered such a high valuation compared to the others?
Here at Moving Home Advice, we don’t like to be cynical, but it’s a hard truth that the one agent who has given a higher figure has probably done so in order to win the opportunity to market your home.
Agents have two key goals every day: first, to win instructions (the right to exclusively market homes), and second, to sell homes. They can’t do the latter before doing the former. So, by quoting the highest valuation, they may simply be trying to win your instruction rather than giving you a price which is realistically achievable once the property goes to market. In other words, they have over-valued your home and you should be cautious about working with them.
If your home has been over-valued, it will be very difficult to find a buyer. And while you can always lower the asking price later on, it’s the dishonesty of the agent that you should be wary of.
You need to be able to trust your agent – they’re representing you in one of the most significant financial moments of your life. If they have lied to you, told you your house is worth more than it is in order to win your business, how can you trust them moving forward?
How to catch out an over-valuation
In order to discover whether a high valuation is a realistic one or not, you need to do a little market research. Take a look at what is currently on the market: what is the asking price for homes similar to yours in the same area?
Even better, look at the historic sales of homes like yours in your area. How much have they sold for? Is that number similar to the highest valuation you have received, or is markedly lower?
If the latter is true, this is a red flag and tells you that the agent has over-valued your home. At this point, you should ask the agent directly why their valuation is so much higher than everyone else’s. If they can’t offer a reasonable explanation, you’re better off going with an agent who has given a lower but more realistic valuation.
Quoting you an accurate figure suggests that you can trust the agent to work in your best interests rather than their own. It also makes it far more likely that you will find a buyer. Buyers are savvy and their agents even more so, so if you’re asking too much for your home, they’ll smell it a mile off and pay you little attention. Either that, or they’ll low-ball you with a more realistic offer and you will be left confused and conflicted as to what to do next.
The simple takeaway from this is be wary of high valuations and do not automatically instruct the agent who gives one before doing your homework and ensuring it’s an honest quote. You don’t want a greedy agent out there representing you. You want a good, honest agent who has your best interests at heart.
Has your home been over-valued? How did it affect your sale? Let us know in the comments section below.