Why do estate agents advertise a price range for properties?

trailingspouse

No-one really knows how much a house is worth - all Estate Agents can do is make a 'best guess' based on what has sold in the past. At the end of the day a house is only worth what someone is prepared to pay for it. If more than one person is prepared to pay that price, then you have a bidding war and the house is suddenly worth whatever is the highest offer. It really is a 'how long is a piece of string' question.
Examples -
- we bought a house in 1986 for £38,000. 18 months later it was valued at £65,000. Unfortunately the housing bubble in the SE burst at around the same time, and we eventually sold for £54,000. The house didn't change in that time, just what people were prepared to pay for it.
- we bought a house in 2000 for £30,000, and spent 4 years doing it up. It was valued at £95,000. In two weeks we had 23 viewings and 3 people made offers. Cue bidding war and it eventually sold for £100,500. Again, it only sold at that price because someone was prepared to pay that price.

taxiphil

It really is an irritating practice when you're a buyer.

I viewed a house priced at "From £120 to £140", offered £120 and was quite bluntly told the seller wouldn't accept anything under £130. So why not say "Offers Over £130" in the advert to avoid wasting my time?

My only guess is that it's a ploy by the EAs to get people to view houses slightly over their maximum budget, in the hope that some will "fall in love" with the house and then scrape together a few more thousand from their family or somewhere.

GentleGiant_2

taxiphil wrote: »

It really is an irritating practice when you're a buyer.

I viewed a house priced at "From £120 to £140", offered £120 and was quite bluntly told the seller wouldn't accept anything under £130. So why not say "Offers Over £130" in the advert to avoid wasting my time?

My only guess is that it's a ploy by the EAs to get people to view houses slightly over their maximum budget, in the hope that some will "fall in love" with the house and then scrape together a few more thousand from their family or somewhere.

This may very well be the reason.

I think that agent was breaking the law - I think they are obliged to forward all offers irrespective of how low they are.

I know that if I was interested in a property from 120k-140k I would be looking to start offering at 110k.

So I agree the price range should have been different for that property you viewed.

ValHaller

taxiphil wrote: »

My only guess is that it's a ploy by the EAs to get people to view houses slightly over their maximum budget, in the hope that some will "fall in love" with the house and then scrape together a few more thousand from their family or somewhere.

It is not only a ploy against buyers, it is a ploy against the vendors. They are telling the vendors that in a normal market, it would go on for 140 and expect 130, but they have to put it on at 120 - 140 and negotiate buyers above 130. When really it should go on for 130 and expect 120