Agent valuations in a declining market

HugoSP

Some EAs will value a property high to get an instruction, then come and suggest the price is dropped 4 weeks into a 10 week tie in period

Others will value low to make their job easier - some shrewed questioning and a careful look at their whole attitude will help to decide whether they really want to sell your house or gather a glut of properties simply to appear to offer buyers choice.

Others, like the one I went to, valued our flat at some £5k higher than I thought it was worth. I can come down in price if I need to but can't go up. I would prefer to sell with these people at the same price as the pessimists above, because I know they will work to sell the property

merlinthehappypig

Curv wrote: »

Is that the one you promised your wife she could have if they reduced the price to less than £500K...? :eek:

No, thank goodness. That was the one that stuck at £520000. She doesn't like the one that is now £499950 (though I do.......).

As far as one of the earlier posts said about confusing value with price, I agree to an extent. If there were loads of houses that we like I would, of course, be offering silly amounts to find out who was desperate. That not being the case, like most people, we base our decision on what to offer on what we like, rather than what is good value. The heart tends to rule the head and you sometimes pay more than it might actually be 'worth' (though that is very subjective anyway). Ideally it would be great if we could balance both, but that rarely happens.

That said I bet there aren't many people who would consider offering 20% less than asking price on a house they have fallen in love with, having been looking for some months and being mostly disappointed in spite of the agents PR, even with the slightly uncertain market at present if it is for a home, in case they 'lose it'. I'm not saying that is right, just that it is what happens.

SquatNow

You're all fools, buying just before the crash.

Gets Hat/Coat

ramborai1987

squatnow why the hell do u think there's going to be a crash. a 'fall' could be but a crash certainly not.

http://news.bbc.co.uk/1/hi/business/7070432.stm

also if interest rates come down next decision your crash would have been blown away.

hgllgh

ramborai1987 wrote: »

squatnow why the hell do u think there's going to be a crash. a 'fall' could be but a crash certainly not.

http://news.bbc.co.uk/1/hi/business/7070432.stm

also if interest rates come down next decision your crash would have been blown away.

Well ... not necessarily. The US has lowered interest rates but the market is still heading south rather rapidly. With credit not being available as easily as before it seems that offer prices will go down. You can only offer as much as you can get out of a lender.

Judging by some of the responses buyers should pretty much ignore EA valuations and base any offers purely on what they can afford. with the market as it is, if that means offering 20% under then go for it and stick to your guns :T

SquatNow

Agreed, it doesn't matter what interest rates do, no-one is willing to lend anyone any money anyway. If you can't borrow you can't buy. The housing market is toast.

It's also worth adding that Estate Agents are as trained/qualified to estimate house prices as most family pets.

Curv

Doozergirl wrote: »

Common sense would help, curv.

The ability to be consistant would also help. Many of the independents have members of RICS as their directors and they do the valuations. Generally you get a realistic view with them. It comes with experience really, an interest in the housing market as a whole and yes, an ability to read what the market is doing locally.

I'm not an EA and I have no qualifications, but I can value a house pretty well in the area I know.

So it's not ALL EAs, just the inexperienced ones and the big chains? I ask because the OP didn't make any distinction - it was a broad brush condemnation of the industry as a whole.

Personally, I agree with you Doozer... in my experience, the smaller, local agents tend to be more realistic, opting for turnover and sales whilst the larger nationals seem to be trying to accumulate as large a portfolio of properties as possible to show buyers. Which doesn't make a great deal of sense to me, because EAs make money from actual sales rather than people browsing. And with Rightmove etc. who needs an EA to help them find a house? That's the easy part!

When I was looking to appoint an EA I looked for the ones with the most properties showing as 'Under Offer' and 'SSTC', rather than the most properties, full stop.

But back to the qualification thing - in my professional and personal experience, RICS surveyors producing home buyers reports etc.tend to agree with the purchase price and only comment otherwise if:

1) The house is being sold at a heavily discounted price (perhaps between family members) and the purchase price is way out of line with similar sales.

2) Essential repairs are necessary. Even then, any 'adjustment' to the valuation is for the cost of the works involved. They, like everyone else - qualified or not - believe that a house tends to be worth what someone will pay for it.

FWIW, I think anyone professionally involved in estimating 'value' or price ought to be RICS qualified, if only to give the industry a little more credibility. But I doubt that will ever happen.

Running_Horse

SquatNow wrote: »

Agreed, it doesn't matter what interest rates do, no-one is willing to lend anyone any money anyway. If you can't borrow you can't buy. The housing market is toast.

It's also worth adding that Estate Agents are as trained/qualified to estimate house prices as most family pets.

As a squatter, why would you care?

Asking prices are not determined estate agents, but by sellers.

mlz1413

SquatNow wrote: »

Agreed, it doesn't matter what interest rates do, no-one is willing to lend anyone any money anyway. If you can't borrow you can't buy. The housing market is toast.

It's also worth adding that Estate Agents are as trained/qualified to estimate house prices as most family pets.

Lending is down i grant you that, but that is because the banks have realised they have have a citeria for a reason. I think it's a good thing the lenders have started to show some sense by only lending what people can afford to repay.

Prices have climbed out of all proportion for too long, if they level out that would be great. But i'm with 'ramborai1987' i think a crash is dependant on interest rate rising.

WTF?_2

dolce_vita wrote: »

It certainly exposes EAs for what they are : mainly unqualified, skill-less salespeople.

Their figures are based on nothing more than what a similar property has recently sold for. In a rising market they just add on a few quid and in a falling market, they.............

......well, many of them have no experience of that and are in for a shock.

Yes - I must admit to taking some satisfaction at the prospect seeing how the current generation of snotty 20-something wideboy agents handle a market going in a downward direction

There are good EAs out there who actually know the business and provide and efficient and competent service of selling houses. Unfortunately there are also a lot of chancers who jumped onto the boat in the middle of a fast rising tide who act in a sloppy, unprofessional and downright rude manner. They are about to be exposed.