Popular estate agents are overvaluing homes by up to 20 per cent

[Guest]

... and then charging the highest commission.

Not news to HPCers, but good to see in the MSM. Originally a Times article but paywalled, so quoting the Sun version: https://www.thesun.co.uk/news/8804089/estate-agents-overvaluing-homes-lure-sellers/

Quote

An analysis of housing agents found that the big ones — including Foxtons, Hamptons International and Chancellors — are the worst offenders

Quote

The Times investigation found the ten agents who overvalue the most charge twice as much on average as the ten who overvalue the least — the equivalent of £5,500 commission on a £300,000 home instead of £2,200.

The National Association of Estate Agents admitted some “unscrupulous agents” try to win business by quoting a higher asking price.

Buying agent Henry Pryor added: “The scale of overvaluations is shocking.”

Quote

Nearly 60 per cent of homes listed by Foxtons had to be reduced from the initial price, compared with the national average of 32 per cent.

The company charges a commission of three per cent, more than twice the national average.

Foxtons said: “We always price properties competitively in partnership with homeowners.”

 

[winkie]

There are only certain types of property that can be over valued......the ones people with over flowing pockets are more likely to purchase.......to over value other homes is detrimental to the sales process because there will be a number of reductions, takes longer to sell and people think there is something wrong with it or the vendors were particularly greedy or stupid.

[Confusion of VIs]

1 hour ago, highYield said:

... and then charging the highest commission.

Not news to HPCers, but good to see in the MSM. Originally a Times article but paywalled, so quoting the Sun version: https://www.thesun.co.uk/news/8804089/estate-agents-overvaluing-homes-lure-sellers/

 

Foxtons have been famous for this for years.

The problem is many people who know in their heart that the valuation is too high cannot bring themselves to forego the possible extra £100k and decide to give Foxton's a go.

A couple of months later they get told the market has changed and they will need to reduce their price or get pressured to accept a far lower offer. If they do sell it will be at the same price as any other agent could have achieved but at twice the commission. 

 

   

[winkie]

......also if an agent gets a reputation of always overvaluing the buyer will either avoid using them or go in with drop below value to get a better value.

[Fromage Frais]

Purple bricks is often the worst.  The ability to save money/self service listing results in a deluded asking price.  

At the end of the day with little for sale around here you cannot sell it till you have the listing.  So the start high work them down approach is the only effective way to win business.

 

 

 

[thewig]

EAs also lie easier than they breathe

[“Nasty Piece of work”]

There is a whole host of houses “For Sale” were an EA has over-valued,  and the Vendor is away with the fairies, and thinks their house is up for Sale.  Really it is on the Subs. Bench, and not even playing. That is when your life really is on hold, dependent on a failed double glazing salesman.

[winkie]

9 minutes ago, thewig said:

EAs also lie easier than they breathe

They also withhold important and relevant information from buyers....if you ask them a direct question they avoid telling the truth (even if you know the truth) so you know they are blatantly lying......never expect the truth from the agent, talk to the vendor, knock on their door.

[Fletcher]

Overvaluing properties to win business is going to be a strategy that works in a rising market, as long as the seller is not in a hurry to sell.  If you overvalue by 20% and market is rising by 10% pa you get the business, wait around, maybe send some dummy viewers (I'd be very surprised if this doesn't happen) to feign interest, and then after say 9 months drop it by 5%. Before long the market has caught up, you get the sale, book the fees etc and job done. 

In effect you're monetising time at the expense of the seller, cos really it makes no difference to the ea how long it takes to sell the property. 

[Fletcher]

Thinking about it it's such a neat way to get business the wonder is why they don't all do it. Or maybe they do, which is why the market moves as it does. 

[longgone]

2 hours ago, Confusion of VIs said:

Foxtons have been famous for this for years.

The problem is many people who know in their heart that the valuation is too high cannot bring themselves to forego the possible extra £100k and decide to give Foxton's a go.

A couple of months later they get told the market has changed and they will need to reduce their price or get pressured to accept a far lower offer. If they do sell it will be at the same price as any other agent could have achieved but at twice the commission. 

 

   

i used foxtons to try to sell my old flat back in 2005 i stipulated if you do not get 20k more than any other agent it goes of with another agent. as your fee was so high 

[winkie]

32 minutes ago, longgone said:

i used foxtons to try to sell my old flat back in 2005 i stipulated if you do not get 20k more than any other agent it goes of with another agent. as your fee was so high 

You could have put your own board outside, people like to drive around a chosen area, something a few dodgy fisheye lens pictures of rooms on a web site fail to show you, many sales are picked up from the board, nothing else..... a postcard in the local newsagents window, a few leaflets here and there, works noticeboard or word of mouth a good ones and adds in the local paper do well....if on social media could try there......can anyone tell me what an estate agent does for the money apart from lie or pass the best leads to their friends for the knockdown prices?........most of the value for money sales are done before anything is advertised, or if it is advertised it is already sold.

[longgone]

4 minutes ago, winkie said:

You could have put your own board outside, people like to drive around a chosen area, something a few dodgy fisheye lens pictures of rooms on a web site fail to show you, many sales are picked up from the board, nothing else..... a postcard in the local newsagents window, a few leaflets here and there, works noticeboard or word of mouth a good ones and adds in the local paper do well....if on social media could try there......can anyone tell me what an estate agent does for the money apart from lie or pass the best leads to their friends for the knockdown prices?........most of the value for money sales are done before anything is advertised, or if it is advertised it is already sold.

Yes That`s it. 

you are paying for their builder friends to make 100k in 3 months.  Another reason working is a waste of time. 

[winkie]

1 minute ago, longgone said:

Yes That`s it. 

you are paying for their builder friends to make 100k in 3 months.  Another reason working is a waste of time. 

Add value to flip you mean......estate agents buy for themselves also, to rent out or to sell on without doing anything, perk of the job......don't we love 'em?

[longgone]

7 minutes ago, winkie said:

Add value to flip you mean......estate agents buy for themselves also, to rent out or to sell on without doing anything, perk of the job......don't we love 'em?

oh yes i have seen plenty of this going on. 

personally i would deal with them in my own special way, but then i may not be able to post on the forum for a while. 

[winkie]

12 minutes ago, longgone said:

oh yes i have seen plenty of this going on. 

personally i would deal with them in my own special way, but then i may not be able to post on the forum for a while. 

I shouldn't do that......just don't deal with them, let someone else pay to keep them, pass any fee/savings onto the purchaser....choices.

Edited April 6, 2019 by winkie

[longgone]

25 minutes ago, winkie said:

I shouldn't do that......just don't deal with them, let someone else pay to keep them, pass any fee/savings onto the purchaser....choices.

= Longgone

[sPinwheel]

Popular estate agents??

[Fromage Frais]

5 hours ago, longgone said:

oh yes i have seen plenty of this going on. 

personally i would deal with them in my own special way, but then i may not be able to post on the forum for a while. 

I often think a decent chunk of the overpriced stuff is flipping gone wrong.

10% increases after buying a the year before etc etc

 

 

 

[longgone]

18 minutes ago, Fromage Frais said:

I often think a decent chunk of the overpriced stuff is flipping gone wrong.

10% increases after buying a the year before etc etc

 

 

 

After htb was announced I tried to buy lots of different places that needed money spent. 

They all end up with the ea mates 

It's crooked from top to bottom

[“Nasty Piece of work”]

14 minutes ago, Fromage Frais said:

10% increases after buying a the year before etc etc

That is another area that will stop and eventually people will start buying houses to live in.

[Mrs Bear]

We get The Times, and I have to say the front page headline on this cracked me up.  I mean, since when is it news that Foxtons (among others) regularly over-value to get the business?  Since when is it news that vendors can be extraordinarily stubborn about what they think their houses are 'worth'?  

I can only think that after so many days of effing Brexit headlines, and I dare say sales falling because people are so sick of the effing B word, they thought this would sell rather more papers. 

Very likely spot on, too. 

Good on them for highlighting it, though - and for the website where you can enter your postcode and find out which local EAs are worst for over-valuing. 

Edited April 6, 2019 by Mrs Bear

[24gray24]

Increasing valuations is a sign of recession; as sales drop off they start over valuing to get the declining business. 

[spyguy]

On 06/04/2019 at 10:25, thewig said:

EAs also lie easier than they breathe

Our local one, all 80s filofax, porsche, hung himself.

[thewig]

50 minutes ago, spyguy said:

Our local one, all 80s filofax, porsche, hung himself.

Does he still lie easier than he breathes? Sad story.