How do you actually value a property?
I ask that question because I genuinely don’t know the answer, though you may think I should having been involved in in the sale of property for over 40 years!
The reason I ask, is that I hear constant laments from estate agents and industry commentators that “other agents over value properties” to get the instructions and this may even be true. The idea as I understand it, is that an agent knowingly over values a house and then ties seller in for 12, 16, 20 or even 24 weeks to a sole agency.
The allegation is that the agent then spends the next few months reporting that there is minimal interest, a low volume of viewings compared to other homes and that the asking price needs to be reduced in order to increase viewings. Whether or not this cynical approach (knowingly over valuing a property as opposed to making a genuine mistake) is actually rife is clearly open to debate.
However, it appears to be a problem if one looks at the statistics provided by Chris Watkin (who regularly shares a whole range of housing market statistics in this publication) which he collects from the excellent TwentyEA.
I concede that these statistics relate to 2023 and that things may have improved since then but let’s assume that they are about the same in 2024. If they are accurate, it looks as though agents only actually complete on about 53% of all the properties they list on average. A sobering statistic if ever there was one!
Some regions, London for example, apparently complete on less than 40% of the instructions that come to market.
Is this the fault of the agent or the seller and what can we do, if anything, to improve the situation?
Well before you ask, my own track record is NOT a good one. Having been properly open as an agent for a little over 6 weeks I have listed 4 properties and sold just one so far. Not a sparking start but there we are and perhaps I have been guilty of over valuing (definitely not consciously) in order to secure instructions for a new business… we will see.
I would contend that the well known adage that the 3 most important factors for selling a property is actually not true anymore and possibly never was.
Perhaps LOCATION, LOCATION, LOCATION should be replaced with…
PRICE, PRICE, PRICE.
In simple terms, even a property in the worst location will sell at the right price and I would further suggest that the most fantastically located home will not sell if the asking price is massively above what the evidence shows.
And there’s the thing. What does the evidence show?
Well, this is my approach to “valuing” a home…
Frankly (and you may disagree with this) I genuinely believe that no agent can actually value a property and that’s the very first thing I say to a seller after I have looked around and just before I present my services and discuss the various charges and fees. I find that most sellers at least verbally agree with this premise, though they may change their mind if they are not presented with a figure that meets with their own expectations!
I emphasise to them that a house is worth what a buyer is prepared to pay (subject of course to a valuation from any lender), that it will be in competition with other homes and that they (the vendor) can choose the asking price after reviewing the evidence that I present to them. As I say, I always attempt to seek agreement from the vendor that neither they or I can value the property – only buyers can. It does not matter what they actually want, how much they paid for the property or even how much they may have spent on improvements, it ONLY matters what a buyer is prepared to finally offer, further f course to any negotiations via the agent. That offer may or may not be acceptable to enable the seller to achieve whatever their objective is but it IS the actual market value.

That evidence I present is taken from a variety of sources – comparable properties that are either sold or available, various AI generated “Instant Valuations” (I find that the Nationwide House Price Index to be generally reliable) and known square footage figures which I find to be particularly useful for standard house designs.
I them ask the potential client to comment on that evidence, advise on an initial asking price and invite them to instruct me as to the precise asking price with an agreement that we will review the situation after 4 to 6 weeks. I do of course educate them with examples of properties that have been reduced in price and ended up selling at considerably below what the evidence had originally demonstrated.
I have refused instructions for two properties where I thought that the vendors opinion on price was WAY above what the evidence showed. They have gone to market with competitor agents and remain unsold.
As I say, I have not intentionally over valued in order to get instructions and the market will ultimately decide what the actual value is. I have taken my vendor instructions after sharing with them all of the pertinent facts.
So in conclusion, who actually IS responsible for the apparent fact that only about half of all properties that come to market actually end up selling? Is it the agent, the seller or a combination of the two?
I would love to hear your thoughts as well as your approach to valuing, particularly if you think that as an agent you can actually value a home!
Simon Bradbury is a consultant specialising in securing new instructions and runs a (very) small estate agency powered by eXp
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