A PropTech firm has adopted the unusual position of claiming some agencies deliberately over-value properties in a bid to win instructions.
Agent Software says agents have done this in reponse to challenging market conditions, reduced transaction volumes and increased competition.
"We work with thousands of agents across the country and the feedback we're consistently getting is that in a competitive and challenging market, some agents are overvaluing in order to get the instruction from the vendor" says Heather Staff, co-director of Agent Software.
She says the problems associated with overvaluing properties for vendors are clear - possible reduced buyer interest thanks to a high price could mean a property is left on the market for longer, while the subsequent need to reduce the price could put vendors at a disadvantage when it comes to negotiating.
"These factors combined mean that property sellers whose homes are overvalued could end up selling for significantly less than if the property was marketed at the right asking price from the beginning" explains Staff.
"This scenario represents a financial cost and loss of time for consumers as well as a negative impact on the agent's final commission fee."
She adds that if an increasing number of consumers have the negative experience of an agent overvaluing a property and impacting on the eventual sale, it could damage the industry’s public reputation.
"The vast majority of agents value properties correctly and offer fantastic customer service, but it's those who don't that cause problems for the industry as a whole" says Staff.
She suggests that agents should resist the temptation to follow suit when faced with a competitor who is regularly overvaluing. Instead, they should recognise the value of second instructions, which tend to command a higher fee and sell more quickly.
"Vendors are increasingly aware of their ability to switch, particularly if they feel misled by their existing agent. The key is to keep in touch with them, so that when they do decide to switch, you're front of mind."
Agent Software’s tools for agents include Spectre, an ‘auto-prospecting’ system which processes data on all properties currently on the market within chosen areas and identifies key moments when a vendor is most likely to consider switching from one agent to another.
It also recently launched Hello Again, which allows agents to automate contact with past clients in a bid to estimate future repeat business.
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Ummmmmm...
So here's how Agent Software's first cold call of the day *could* go ..
"Hi - I'm calling from Agent Software - we are helping agents be successful"
Agent : "hang on, weren't you the guys who wrote that article in Estate Agent Today calling us desperate and fundamentally dishonestly over-valuing?"
"Oh, yes, that's right - we think you're all crooks"
Agent : "where do I sign - you sound FANTASTIC"
Over valuing estate agents! Whatever next?!
Next you’ll be paying them upfront and they’ll have no interest in selling your property!
Who writes your headlines Estate Agent Today ?? Desperate is NOT spelt as "desparate".........please..... its basic journalism !!
Get rid of archaic and anti-competitive 'Sole Agency' and many problems will disappear.
Of course agents over-value to get instructions. Twas ever thus, even in a falling market like this one (I am in London). But the really destructive thing agents do is try to manipulate prices. Rather than accepting their role as an honest broker between buyers and sellers, many agents (in London anyway) seem to regard their role as actually "supporting" local prices. They active try to get motivated sellers NOT to offer property too low for fear of "re-pricing the street". I don't know why they see this as their role, but I know many do. It is a hugely destructiuve practice because it stops prices moving to where there would be real liquidity.
Thankyou EAT for rectifying the "desparate" typo :)
This is a complete non-story. Soon, you'll be telling us that bears occasionally nip into the woods for a toilet break. It's always been the case and most likely always will. It's been a long time since I saw as many 'reduced price' notices on the portals.
I suspect that "Heather" from Agent Software has never come out from behind her computer screen, because if she had, and before slinging mud, she would realize that valuing property is not as simple as collecting fixed data from a machine. How many times, over the years, have agents agreed to list a property at a certain price before the vendor rings and puts the price up to a simply unattainable figure, simply because "the family said", or "a friend who knows about property knows the market well"? I do freely admit that there are agents that overprice, but please don't broad-brush the entire industry. The majority of agents are hardworking, sensible people, doing their best for clients.....only a small proportion are roguish overvaluers. To do so is like suggesting that Spectre is simply a letter writing organisation that could be performed by somebody at Miss Moneypenny for one-tenth of the cost.
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