Estate Agent: extremely high valuation + low fee, what's in it for them?

propertyhunter

Can you get more valuations from other estate agents to inform the list price, and then select the EA with the best service? 

I asked 6 EAs to provide valuations. I then selected a value that would get interest and was competitive based on these valuations. I chose an EA who was recommended to me and that I knew would commit the resources and had the manpower to get as many viewers in as possible, at whatever time (as long as not too late). I also was reassured that the EA would do everything to get to completion, and they did. They called up solicitors and brokers to chase to ensure things kept moving quickly.

I would suggest looking at Google reviews for your estate agents - as these might provide insights that help you to make a decision - because it's not about going with the lowest commission all of the time. I paid 0.75% more for my EA, and it was worth it. They got a price 18K higher than the valuations offered by those on a cheaper commission, and this more than made up the difference in the fees I paid them. 

canaldumidi

As eddie said, their fee should only be payableif you sell to someone they introduce within 6 months. That's perfectly normal, and fair. They did the work and introduced the buyer. Simply write that extra wording into the contract before you sign, initial the addition and get them to also initial, then photocopy and keep a copy.

Look carefully at the minimum contract term. If they turn out useless you don't want to be stuck with them for months. Ask for a minimum 4 weeks contract (if you are happy, you can always not cancel). Negotiate and agree on 6-8 weeks max. NOT the 16-18 weeks they probably use as their standard contract length.

Thrugelmir

DragonQ said:

We recently had a bunch of valuations done and one EA said our house was worth 30% more than the 2nd highest valuation.

Sounds little more than a ploy to obtain your signature. Many EA's around here have very little to market currently. Dog eats dog as they say. Any fee income is better than none. The bills still need to be paid. 

propertyhunter

canaldumidi said:

 Negotiate and agree on 6-8 weeks max. NOT the 16-18 weeks they probably use as their standard contract length.

Agree with this. I actually managed to negotiate to 4 weeks to avoid being trapped in case serious buyers weren't coming through the door. Luckily, I was sold STC in less than a week of listing on Rightmove. 

lookstraightahead

Where I used to live one particular EA was notorious for this. He preyed on sellers' greedy and over confident nature - how great people feel when they're wealthier than they thought they were! But they still got lots of business, as (many) buyers like paying too much for things (not just houses). The more they pay, the better off they think they are.

The one thing that backfires is the bank's valuation - when everyone comes back down to Earth and starts again. That's happening more now, and is a bit of a safety net for buyers (not that they see it that way)

Think about it in terms of branding. If all houses are say 3 bed, and there's one 4 bed (even if floor space is the same which it often is, is just a divider wall), the EA will 'value' it as much higher as 4 beds is seen as hugely more attractive than 3. 

It is all to do with behaviour. If an EA can make someone feel good, they're half way there.

gab3x

You will sign up with them, they will advertise but house won't sell so you will drop the price once or twice and get your sale then. Problem is you will end up getting less £ than if you got your price right at the start. What's in it for them? Market share, sometimes they get their KPIs on no of contract rather than final value so they build up their base this way. 
The only loser alas will be you. Speaking from experience.

TXC

Got a feeling a couple of online onlys could be in this bracket, house sale I've just had fall through had the bank valuation come in £10k below the "In excess of" marketing price. Don't think the vendor was best pleased when speaking to him! Not displeased enough to budge on the price mind you....

Just gone back on the market at the same price so who knows what the strategy is

Ramouth

I think it depends a little on the property.  A newish house surrounded in similar houses in similar locations is far easier to value than a property that is a little more quirky.  We had quite a broad spread in valuations for ours and chose the agent who seemed to have the most faith in the property.  Good luck whatever you decide!

Sandtree

TXC said:

Got a feeling a couple of online onlys could be in this bracket, house sale I've just had fall through had the bank valuation come in £10k below the "In excess of" marketing price. Don't think the vendor was best pleased when speaking to him! Not displeased enough to budge on the price mind you....

Just gone back on the market at the same price so who knows what the strategy is

Hope the next buyer needs a smaller mortgage and so LTV is still acceptable with the lower bank valuation or that the next bank's valuation is higher. Its not an exact science and can be fairly material difference in valuations from different experts (especially in these times)

Noneforit999

We have are about to instruct one which charges 1% plus VAT and only does offers over X then does an open house with as many qualified buyers as they can get in with the view they will bid against each other.

Our neighbour used the same guy, offers over £400k and highest offer was £422K from a FTB, even upped the offer to secure it.

whether the lender will value at that is another matter. Sure the EA only gets the money if it completes anyway?