Homeowners could be tricked into paying higher rates of commission due to expensive agents misleading them over their properties’s values.
The estate agencies most commonly overvaluing properties (saying they’re worth more than they really are in order to win business) are also those that charge the highest rates of commission, according to an investigation by the Times.
The research claims that homeowners who use estate agents that have overvalued their properties end up reducing their asking prices – but still pay higher fees than they would have with other firms.
Below, Which? takes a closer look at the research and explains how to choose the best estate agent and check the true value of your property.
Property sellers pay the price for overvalutions
The Times’ analysis of Zoopla data found that homeowners who list their property with any of the 10 estate agents that overvalue the most would pay on average double the rate of commission charged by the 10 agents that overvalued the least.
It also found that the largest estate agents were most likely to overvalue sellers’ properties.
The asking price on a third of properties was reduced by an average of £23,400 (6.9%), according to the Times.
The findings reiterate an investigation by Which? in 2017 that found estate agents that overpriced properties cost sellers £4.3 billion, as the initial asking price of one in five properties sold in England and Wales between September 2015 and 2016 had been reduced by at least 5%.
Overvalued properties can also take longer to sell, as potential buyers can be put off by the asking price or might miss seeing the property altogether if they filter their online search by price.
How to work out your property’s value
It’s widely known that a key part of the home-selling process is to ask estate agents to value your property – but it’s wise to treat the figures you’re quoted with a pinch of salt.
That’s because some less scrupulous agencies may overvalue your property in a bid to persuade you to sell with them.
It’s always worth asking at least three estate agents to give you a valuation, but you should also do your own research. The key thing to check is how much similar local properties are actually selling for, which you can do using the Land Registry website.
There’s little point asking for substantially more than your property is worth. Buyers will be doing their own homework on house prices in your area and, even if someone makes a high offer, the sale could fall through if their mortgage lender thinks the property is worth less.
- Find out more: how much is your house worth?
Choosing the best estate agent
The valuation process gives you a golden opportunity to grill each estate agent on how many properties like yours they’ve sold recently, and what prices they achieved. You can also ask about their fees and terms and potentially haggle on both.
You’ll need to have your wits about you as the estate agent that gives the highest valuation for your property or offers the lowest fees may not necessarily be the best one for you.
If there are lots of potential agents you could use, it’s worth asking local friends and family whether they can recommend anyone.
You could also use our estate agent comparison tool to see local firms’ average selling times and percentage of asking price achieved. This tool is run in partnership with GetAgent, and clicking for results will take you to the comparison website.
Alternatively, you could consider online estate agents, which tend to charge lower fees but offer a slightly different service from a traditional high-street estate agent.
- Find out more: how to find the best estate agent