Overvaluing Tricks & Traps: How to Stop Them Spoiling Your Move

When an estate agent values your home at more than you expected, it’s natural to be thrilled. But it’s wise to employ some healthy scepticism around whether a price is achievable, or an overvaluing ploy.

We're all for being bold with asking prices, but it's quite another thing to deliberately overvalue someone’s home, tie them down with a lengthy contract, and mess up their moving plans.

It’s a sad fact that overvaluing by agents is getting out of hand: seducing you with flattery rather than facts, preying on your trusting nature, and falsely boosting your hopes.

The trick involves a carefully orchestrated process of signing you up, then gradually blaming the market for the lack of progress until, eventually, a price reduction is recommended. Reluctantly, of course.

Fortunately, and with the right information, it's easy to see right through these tactics. They are remarkably formulaic, and the tips in our guide will show you how to: 

• Spot overvaluing tricks.

• Question the evidence.

• Avoid contract traps.

• Find the asking price sweet spot.

• Protect your digital trail.

Your home is most likely to sell for the highest price when it’s still fresh on the market, and by knowing the signs of accurate and inflated advice, you can maximise your chances in that crucial time.

SPOTTING OVERVALUING TRICKS

There’s a big difference between an agent winning your business with an excellent proposal, and buying your business by overvaluing your home, so let’s look at the difference between the two.

• The best agents will show you everything they’ll do to sell your home, from the initial launch, to their strategy to maintain momentum, to their guaranteed service standards.
  
• An overvaluing agent will spend very little time committing to anything, and will focus instead on promising a queue of waiting buyers while oddly insisting on a lengthy contract.

• Another factor will be the presence or lack of comparable evidence. Accurate valuations are accompanied by examples of recent sales, while overvaluing requires ignoring them.
  

Ultimately, an inflated asking price can stall your move, waste your time and cost you money by missing the opportunity of those valuable first weeks on the market.

QUESTIONING THE EVIDENCE

A reliable way to judge the credibility of an estate agent’s valuation is to ask if it relies on solid data or fanciful promises. Good agents go out of their way to show how their advice is serving your interests.

• Ask for details of homes that have sold in the last six months. This is by far the most relevant information for buyers and mortgage lenders.

• When there are no recent sales, use a combination of Land Registry data and house price indexes from major lenders to check where values were and how they’ve moved.
  
• If an agent uses similar homes that have been sitting on the market for months as a pricing gauge, be careful. They could be overvalued, which makes them a poor benchmark.

In short: if your asking price pits you against higher-value homes, it’s very unlikely to either be a convincing prospect for buyers, or to pass the stringent tests of surveyors and mortgage lenders.

AVOIDING CONTRACT TRAPS

Overvaluing and long contracts often go together, because the agent will need to lock you in for months to have plenty of time to manage you down to a lower price later on. Here’s how to avoid that.

• A confident agent who has priced your home correctly shouldn't need a 6-month tie-in. 4 to 8-weeks is plenty of time to see how an agent performs, and whether you want to keep them.

• If an agent insists on a lengthy contract, ask for a break clause based on a specific number of viewings within the first month.
  
• Check that there are no hidden withdrawal costs if you decide to leave after the initial term. You should always be free to switch agents if the results you were promised fail to materialise.

Remember: contract traps are designed to bind you to an agent no matter how disappointed you become. The longer you’re asked to sign up for, the more you should treat that as a red flag.

FINDING THE ASKING PRICE SWEET SPOT

The goal of your asking price is to generate excitement and stimulate competition: finding the ‘sweet spot’ can make all the difference between attracting multiple motivated buyers, or none.

• Statistics show interest peaks in the first month. Launching at a realistic price creates the excitement that can actually drive the final sale price to its natural peak.

• Buyers search in price brackets. If your home is too far over a major threshold, you’ll exclude the very people who are most likely to be the perfect candidates.

• Generating leads is the priority. Ask each agent what asking price will stop buyers scrolling and compel them to book a viewing immediately, rather than just watching from a distance.

To sum up: the highest asking price doesn’t necessarily encourage people to pay the most money. In fact, if your price is too inflated, it can have entirely the opposite effect.

PROTECTING YOUR DIGITAL TRAIL

The portals never forget a price change. Buyers use browser extensions to track every movement, and everything you do leaves a permanent footprint. So keep the following in mind:

• If you’re tempted to try a high price for a few weeks, remember that even a short-lived overvaluation will taint your home's digital history as well as sending buyers elsewhere.

• Launching at the right price creates a foundation of quality and confidence, and reaches the people most likely to buy a home like yours - the only ones who matter!

• Cherish your ‘new listing’ badge. Don't waste that extra visibility on a price the market will ignore, as you'll lose momentum that can be hard to regain once lost.

Your home's online presentation is its introduction to the world, so be careful to protect its brand: a history of reductions can make your home look unsaleable, or flag you as a desperate seller.

Has overvaluing disrupted your move?

With the peak spring market on the way, an evidence-based valuation and data-led advice will set you up for a successful launch and stress-free move.

If you’re planning to sell your home in the Wilton and Salisbury area, call us on 01722 580059 or email us at info@piccoloproperty.co.uk for a true assessment of your home’s maximum potential value.