Agents turn on rivals accused of unrealistic valuations

Estate agents have hit out at their rivals for overvaluing.

New research has found 95% of estate agents believe competitors provide unrealistic property valuations in an attempt to win instructions.

The survey of estate agents, commissioned by GetAgent, looked at the prevalence of perceived overvaluing within the current market, the competitive pressures that could be driving the practice and what sellers should really be looking for when deciding which agent to instruct.

Two-thirds believe that overvaluing to win instructions has become more common compared with 12 months ago, while 28% believe its prevalence has remained broadly unchanged.

It’s naturally tempting to choose the agent promising the biggest number.”

The approach appears to be having a direct impact on agents who provide what they believe to be more realistic valuations.

Almost nine out of 10 agents – at 89% – said they have lost a potential instruction in the past year because a competing agent gave the seller a higher valuation than they believed the property could realistically achieve.

However, agents believe sellers are also contributing to this competitive dynamic. A third said vendors favour the agent providing the highest valuation as the biggest factor encouraging overvaluing, making it the most commonly cited reason.

Greater competition

Greater competition between agents for instructions ranked second at 28%, followed by pressure to grow market share at 22% and pressure to hit internal listing targets at 11%.

This view is reinforced by 89% of agents believing that sellers generally place too much importance on the highest valuation when deciding which estate agent to instruct.

While an ambitious valuation may therefore help an agent secure an instruction, agents overwhelmingly warn that it may not be in the seller’s best interests in the longer term.

Some 95% believe initially overvaluing a property can ultimately damage a seller’s chances of achieving the best possible outcome.

Instead, agents said sellers should look beyond the headline valuation and consider an agent’s actual performance.

A third said the percentage of asking price typically achieved should be the most important consideration when choosing an agent, while 28% pointed to their track record of selling similar properties locally and 22% highlighted the average time taken to sell.

Together, 83% of agents pointed to one of these three measurable indicators of an agent’s previous sales performance as something sellers should prioritise when deciding who to instruct.

Difficult dynamic

Colby Short, Chief Executive of GetAgent, (pictured), says: “There’s a difficult dynamic at play here. Sellers understandably want to achieve the highest possible price for their home and, when they’re presented with several valuations, it’s naturally tempting to choose the agent promising the biggest number.

“The problem for agents is that this creates an increasingly competitive environment where those providing realistic, evidence-led advice can lose the instruction. When almost nine in 10 agents tell us this has happened to them in the last year, it’s clearly a frustration being felt right across the industry.

“But winning an instruction on an inflated valuation isn’t the same as delivering a successful sale. Good agents know that their reputation is built on what they actually achieve for their clients, not the number they put forward at the valuation stage.

“That’s why it’s becoming increasingly important for agents to demonstrate their value with hard evidence. Their track record locally, the percentage of asking price they achieve and how efficiently they progress properties through to a sale all give them a far stronger argument when competing for an instruction than simply getting dragged into a race to provide the highest valuation.”

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Author: Gemma