With prices still rising and very few homes on the market, it seems incredible that 1 in 20 asking prices were slashed in May. The figures from Zoopla show an average drop of 9% (or £22,500); the biggest discount margin for 18 months.
House prices rose by 11.2% year-on-year in May, slightly down on the 12% from April to April but still a substantial increase. So why are homes being reduced in price?
Unfortunately, overvaluing is being used more and more to get homes on the market. Differences in opinion of a few percent between estate agents are perfectly normal, but the need for more stock is seeing homes hit the market with price tags of 20% and more above their likely value.
But flattering pricing doesn’t get you moved, and the initial high can soon descend into anxiety, disappointment and irritation. So how can you tell if your home has been valued correctly or whether your move is being put at unnecessary risk?
In this week’s blog, you’ll find some practices to look out for, along with some steps you can take to avoid getting caught out.
It might seem tempting to try a higher price ‘just in case’ you find someone willing and financially able to pay way over the odds, but there are very real consequences when agents suggest you market your home at an inflated price:
Even if you did secure a buyer at a monumental price, there’s a high risk of your home being down-valued by a mortgage lender or surveyor. This can lead to sales falling through or hefty renegotiations on your price that could threaten your purchase by shrinking your budget.
There are some tell-tale signs – either at the point of valuation or when you’ve been on the market for a while – that your home has been priced too high.
Here are some red flags to look out for.
Overvaluing has led to gaps as wide as 21% between asking prices and selling prices, proving that buyers know what they should be paying. Excessive pricing simply slows everything down.
Valuations from estate agents should always be ambitious, but they should never offer false hope or put your move at risk. If an agent’s valuation is substantially higher than all the others, it’s worth a little investigation with a few well-chosen questions:
With their answers in hand, you’ll know if the promise of an agent’s pricing is matched by their performance.
If you do appoint an agent who valued your home higher than all the others, make sure to protect yourself with a get-out clause in the contract.
The average time to agreeing a sale is currently around three weeks, so agents don’t need to tie you down for months on end.
Use the following checklist to negotiate a shorter agreement:
If an agent truly believes their high valuation is achievable, they’ll have no trouble amending their terms. And if they insist on signing you up for several months, you’ll have an insight into how confident they really are.
If you’ve been on the market for a while, you’re probably wondering what to do next. A lot will depend on whether you still have faith in your existing agent, so start with a candid conversation to see what they have to say.
They’ll naturally want you to stay with them, but it’s worth considering some of the benefits of switching before making your final decision:
Remember: something’s definitely wrong if you’re not receiving any offers. There are too many buyers right now for any home to stick on the market, so a new agent with a new approach could be just the ticket to get your move back on track.
Could your home have been overvalued?
If your home isn’t selling, or you’ve received a valuation much higher than you expected and not in line with recent sales, why not get in touch for another opinion?
Call us on 01722 580059 or email us at firstname.lastname@example.org for a fresh perspective on selling your home in Wilton & Salisbury area- and let’s get your move underway.
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