"There is no point being Honest"

Quote: Estate Agent, London

Freephone an Independent Surveyor

Our highly qualified independent surveyors can carry out a building survey on your prospective purchase; whether it is residential or for business. We can prepare a schedule of condition and property report in relation to your lease. We carry out dilaps reports for landlords or tenants.

We pride ourselves on our professional standard and easy to read reports which we have been carrying out for many years on every age, type and style of property across the UK and are more than happy to send you examples for you to see for yourself.

Please free phone us on 0800 298 5424 for a friendly chat.

estate agents

How do estate agents value a property?

We had the most fascinating conversation with an estate agent today. We were talking about the values of property. I asked how the estate agent valued the property when someone wanted to look at selling their house or rental property. The estate agent's reply was interesting.

He advised that they didn't really value the property but went with whatever the owner thought, sometimes even adding a percentage of money to the figure quoted, upwards of course. The main aim, he said, was to get the properties onto their books, as without any houses on their books to sell they would not have an estate agency business.

He said it really didn't matter whether they were priced correctly or not because then once they had them on their books and signed up for a 12 week agreement they could start working on the clients, if they so wished. If they felt the clients were reasonable, able and willing to change the price, then they would put the property on at the price the person recommended initially (known as a vendor price), whilst explaining to them that the market conditions, etc, were good, not good or whatever, and unfortunately because of x, y or z their property was unlikely to get to this value, and they would generally re-educate them over the next 12 or so weeks to a price that they thought they could sell the properties at.

estate agents

So, one way or another, the property does actually come onto their books at the right price eventually. He said although they do lose some properties in this process generally it is a win - win situation for both the client and the estate agent. It is an interesting thought also that in a rising market not valuing the property properly would have an increase in value using this method and in a downward market it would have the opposite affect.

Staying on the estate agents books

Having said all of that, the estate agent advised that he always tells the story about how surprised he was to get an offer on one particular property, as this encourages the people to stay on their books (and not move to the books of another estate agent) and gave an example where a property was on at £690,000 and they had an offer of £640,000, which eventually did not go ahead. They went back to the owner advising that they thought it was a one-off offer. The owner wanted to stick at the original price, but gradually over the next year they brought the price until, eventually, it went under the £500,000 stamp duty level. They then recommended taking the house off the market and carrying out a few minor cosmetic things and putting the house back on the market via an open day and sealed bids. Low and behold, they had two offers above the original asking price. The moral being that it only takes one person to offer a higher price for a property and it being worth it.

estate agents

Do estate agents have morals?

Whilst we are talking about morals, the estate agents view was interesting, when I commented that, surely they are not valuing the property if they are just going at the price the owners say. He quite rightly corrected me and said that he doesn't have to value the property, the surveyors value the property and that all the estate agent has to do is, what is known as, a market appraisal (although many estate agents and the general public know it as valuing the property). This is the value around what he thinks a property will sell at. He then made the comment that there is no point being honest in relation to valuing, meaning that there is no point in telling the owner what he thought it was worth, because, as he said, one of the other big estate agents would come in to tell the owner that it was worth what he thought and they would lose the instruction, with it being taken on by a different estate agent. To be honest, we could actually see his point and understand the business rationale behind it.

However, it does pose the question, is the estate agent valuing or just telling you what he knows you want to hear?

estate agents

You may be interested in our other articles about Estate Agents:

Understanding the Estate Agent

Estate Agents tricks of the trade

Basic outline of what's involved when buying a home

Compare our website articles and compare our surveys

Have a look around our website 1stAssociated.co.uk to see the quality of our articles, for example this one and please call us on 0800 298 5424 if you would like us to email you examples of our surveys.

Meet your building surveyor

We are always happy to meet you at the property during the survey so that we understand exactly what you require from your survey report and so we can answer any questions you may have.

Our photos and unique sketches help you understand the survey and our

circles and ovals highlight certain areas

If the survey report, along with our photos, does not explain the problem or characteristics of a property enough then we also have a vast range of sketches that we have had commissioned exclusively for us that we can use in our reports.

estate agents

An example of one of our sketches

estate agents

An example of one of our photos

Commercial Property

If you have a commercial property, be it leasehold or freehold, then you may wish to look at our Dilaps Website at www.DilapsHelp.com and for Disputes go to our Disputes Help site www.DisputesHelp.com .

Our articles

We hope you found the article of use and if you have any experiences that you feel should be added to this article that would benefit others, or you feel that some of the information that we have put is wrong then please do not hesitate to contact us (we are only human).

The contents of the web site are for general information only and are not intended to be relied upon for specific or general decisions. Appropriate independent professional advice should be paid for before making such a decision.

Our rights

All rights are reserved the contents of the web site is not to be reproduced or transmitted in any form in whole or part without the express written permission of 1stAssociated.co.uk.