IT may sound obvious, but putting a property on the market at the right price is essential for a successful sale or let, writes Kim Smith, branch manager at Leaders in Winchester Street, Basingstoke.
Most people want to hear that their property is worth as much as, if not more than, they thought and so some agents are willing to deliberately overvalue because they know it will help them win instructions.
But overvaluing can cause serious problems for both vendors and landlords. The property will take a lot longer to sell or let, costing them valuable time and money and often causing a great deal of stress.
Sadly, it is not unusual for some estate agent employees to receive commission per instruction rather than for selling or letting, so they have no qualms about overvaluing as a means of tempting the owner into signing up with them.
As a result, vendors can find themselves tied into a sole agency agreement – sometimes for as long as 3 months – which means they are stuck with the agent who misadvised them and wholly dependent upon them to sell their property. The agent will inevitably have to lower the price to a more realistic level, which is frustrating for the vendor and can also cause problems if they are forced to adjust their expectations of what they can afford for their next property purchase.
In the case of letting, every day that the property is empty costs the landlord money in lost rent. In these cost conscious times, if the rent is set above market value it simply will not let and when the rent is lowered – as it inevitably must be to secure a tenancy – landlords could find themselves open to hard negotiation from prospective tenants who have seen the property sitting on the market for some time.
To ensure an accurate valuation of your property – whether for sale or let - our advice is to make sure your chosen agent is reputable, knowledgeable and honest, with many years’ experience behind them. Ask them to explain exactly how they determine the market value of a property so you can be sure they are not just telling you what they think you want to hear. For example, we draw on our up to the minute knowledge of local demand and supply, what is happening locally and regionally that is affecting prices and exactly how much and how quickly similar properties in the area have sold or let for recently – by ourselves and other agents.
Even if the vendor thinks their property is worth more and is unhappy to receive a lower valuation than they expected, we will always be honest with them because we know it is in their best interests that an accurate value is set from the start. Overvaluing only leads to frustration and disappointment – not something we want any of our clients to ever experience!
Vendors should also always be careful about the length of any sole agency agreement they enter into and certainly never sign up to anything as long as 3 months. If a property is priced right for the local market conditions, a good agent should be able to sell it within 4 weeks. If not there is something wrong, and if you’ve signed up for 3 months you will have no choice but to stay with that agent until the agreement ends.