Estate agent ‘over-valuations’ blamed for price cuts in homes for sale

New research published by Which? claims to show that one in five properties sold in the year to September 2016 were reduced by more than 5% of the initial listing price

It says this was as a result of estate agent over-valuations.

Purplebricks said that the Which? report highlighted the need for more transparency in estate agency and said it was delighted with its own approach.

Which? said it analysed more than 370,000 property sales in England and Wales, finding that 19% had been heavily reduced from the initial asking price.

It said today that “the price reduction implies an initial valuation that was too high”.

The sample represents some third of the 1,141,620 properties sold in the 12 months to last September. Property sales in Northern Ireland and Scotland were excluded from the Which? report.

The study found that properties that had been reduced by more than 5% took an average of 64 days longer to sell and had an average final sale price of almost £20,000 less than properties that sold without such a significant reduction of the asking price.

Which? also found that properties reduced by 5% or more took on average 243 days from first listing to Land Registry sale date. All other properties took on average 179 days from first listing to Land Registry sale date.

For properties that were not heavily reduced before selling, Which? found that the average listing price was £261,000, before an average sale price of £260,000.

For properties that were reduced by more than 5%, the average listing price was £266,000, before an average sale price of £241,000.

Richard Headland, editor of Which?, is telling consumers: “When selling your home, make sure your agent can provide evidence of similar sales to back up the valuation.

“If the valuation is not realistic, you could end up thousands of pounds worse off and wasting a lot of time.”

Michael Bruce, CEO, Purplebricks, said: “We welcome today’s report from Which? which highlights the need for more transparency in estate agency. Purplebricks provides customers with 24/7 visibility from instruction to completion and offers an alternative to the outdated commission model.

“We are delighted that our approach, combining technology with local property experts, has been proven to sell properties more quickly and for a better asking price, compared to other agents.

“In today’s world of estate agency, customers should have clear insight on the process, access to information and transparency at all times.

“Customers should always be given information such as the value of similar properties sold in their area at valuation, have instant access to feedback and offers and be able to directly contact buyers at any time, from anywhere 24/7.”

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Written by: Houseladder