It can, says Tony Clarke, Managing Director of the Rawson Property Group, be very frustrating to see just how often certain members of the public simply will not take valuation advice from reputable estate agents, even when this is given with complete sincerity.
“For as long as I can remember, eight out of ten agents have been advising their selling clients to avoid overpricing – for the simple reason that it is a tactic which does not work. The two out of ten not giving this advice and consciously going along with too high a price are probably doing this so as to get a mandate. When a few months later the property has still not sold, they will blame the market conditions and such factors as over-supply.”
The problem, added Clarke, is often that the man-in-the-street relies on dinner talk for his property valuations and his perceptions are very often a year or two behind the true conditions.
“When, late in 2008, for example, we began telling our clients that they were now in a buyers’ market, that sales times had doubled to an average of 12 or 13 weeks and that upper bracket homes had lost some 20% of their value, there were some who just could not accept this.
“Of course, all of us realise just how upsetting and traumatic it can be for a seller to have to reduce his price on a home to which he has given a great deal care and on which he has probably spent considerable sums of money. However, market values have and always will prevail and buyers – especially today’s buyers – will not be misled. They have a range of online resources to consult as well as the day-to-day advertisements in the newspapers. They will learn fairly fast what homes in their target areas are worth.”
Those sellers who put their homes up for sale at high prices in the expectation that the market will eventually catch up with them, said Clarke, are also misguided because when a home is on a sales list for month after month it picks up a stigma and tends to be seen as being somehow flawed. In the end, in all probability, it will sell for below its true market value.
“The seller must always realise that the market determines the final price of a property and, although the market may seem harsh to the seller, it is always right.”