Overvalued properties fail to achieve optimal price, according to new report
A recent study has highlighted the importance of having a property valued accurately when trying to sell, finding that overpriced houses in fact sell for an average of £12,000 less than their listing price across England and Wales. The analysis by Zoopla, which looked at the differences between the initial listing price of a property and the final sale price according to official figures from the Land Registry, also revealed that houses with an over-inflated value took up to 58 days longer to sell than houses that were more realistically priced.
There are many reasons why a property is marketed at a higher asking price. Often, it comes down to the market appraisal provided by estate agents, who often work on a percentage basis and may therefore push for a higher initial price to drive a higher fee for their services. Estate agents may also want to try and ‘test the market’ – using a vendor’s property to see how far they can push the price boundary in an area.
Of course achieving the highest price possible is almost always going to be in a property owner’s best interests and it’s for this reason that vendors often decide to list a price at the higher end of the valuation range provided. However, Zoopla’s research goes to show that this approach doesn’t always yield the best results.
It is also worth remembering that even if a buyer is willing to pay over the odds for a property, their lender may not agree. If utilising a mortgage to purchase a property, the bank or building society will almost always insist on their own valuation report. In cases where a property has been overvalued, a ‘down valuation’ can occur – essentially meaning the lender is only prepared to lend up to a certain value. This either leaves the buyer in a position where they have to find the additional funds themselves, or else pull out of the purchase. This can mean losing a buyer, resulting in the chain breaking down and perhaps threatening your own property purchase.
One way to ensure the price you’re planning on selling your property for is fair and accurate is to use a Chartered Valuation Surveyor or a RICS Registered Valuer to conduct a valuation report. In doing so, you are guaranteed a number of things. First and foremost, RICS Registered Valuers and Chartered Surveyors are governed by the Royal Institution of Chartered Surveyors (RICS), meaning they must follow strict professional and ethical guidelines.
Additionally, property owners seeking a valuation can rest assured that as an independent professional, a Chartered Surveyor or RICS Registered Valuer will not be motivated by the prospect of a possible sale commission and will not therefore be biased in any way.
For more information on our valuation services or to instruct one of our Chartered Surveyors or RICS Registered Valuers to conduct a property valuation (residential, commercial or agricultural), please contact us here.
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