Once upon a time in Cheadle, a land not so far away from our office! a young family decided they wanted to sell up and move to a bigger castle that they spotted had just come onto the market.
They called in two different estate agents who arrived on majestic horses with golden flowing manes (the horses that is) ok this sounds grander than a VW golf, but I am sure you follow the analogy!
The first agent, an established local business who have worked in the community for 20 years said the family’s three-bedroom semi-detached palace complete with a garage was worth £300,000 in the current market and produced lots of supporting evidence of past and recent sales in the immediate area to support their valuation.
Agent number two declared with a dramatic flourish that the family’s home was worth £325,000.
A whopping £25,000 more!
The family were thrilled that their little piece of property was worth so much, and much more than the first agent’s valuation.
They instructed agent number two gleefully, who rode off into the sunset a conquering hero complete with his signed agency agreement, a wing and prayer!
No happy ending!
But unfortunately for the family the story doesn’t have a happy ending!
The valuation of £325,000 turned out to be a vastly over optimistic fairy tale of Hans Christian Anderson proportions and the property the young family wanted, sold to another buyer.
Agent number two, unknown to the family, was known throughout the region for his creative pricing which he used to entice people into long contracts with the promise of a higher than average sale price.
But just like the multi-coloured unicorn of mythical days gone by, buyers at vastly inflated prices simply do not exist.
The property stuck on the market like the sweets to the house that lured Hansel and Gretel. It didn’t sell.
Then agent two comes over the horizon three months later declaring there should be a price cut because ‘the property market throughout the area has changed due to the curse of a wicked witch’ Brexit,
Love Island or a host of other excuses and suggested reducing to £295,000.
So, on a serious note, you see that due to the tactic of overvaluing the property the agent got his instruction, but the family didn’t get what they wanted which was a good but correct price in the shortest possible time or the house they wanted. Agents who over value are doing sellers no favours whatsoever.
The science of social proof
Here’s where we at Maurice Kilbride like to step out of the fantasy World into reality.
Also, when an overvalued property has a price reduction a few weeks later, savvy and serious buyers who are monitoring the market are alerted of this and often come in with offers far less than the new reduced asking price. It is a statistical fact that a property which hasn’t sold within the first six weeks is viewed by 30% less buyers and is therefore unlikely to achieve the same level of pricing. This is known as “social proof” – if nobody else is interested in this property, why should we be? What’s wrong with it?
So, our top tips for living happily ever after are:
1) Ask the agents doing the valuation for evidence of the price they’ve reached.
2) Ask them what their marketing strategy would be to achieve that price.
3) Ask to see the contract prior to instructing them – it’s something at Maurice Kilbride we’re happy to do. Check the small print and how long you are committing to a sole agency for. Always avoid sole selling rights!
If you unsure what you have committed to, please feel free to pop into our office in Cheadle and I will happily take a look and explain the terms to you in plain English!
Thanks for reading and remember we’re here to help you achieve your property goals – whether you live in studio flat or magical mountain top castle (not that you get many of those in Cheadle unfortunately)
PS: Whether you are selling, buying, letting or renting, we’re here to help. Call Joe, Emily, Patrick or myself on 0161 428 3663 or email: firstname.lastname@example.org for expert advice which is honest, accurate and informative. Better still pop in for an informal chat to our office on Cheadle High Street. We might even make you a brew!