Do estate agents admit they’ve got it wrong?

[Give0fecks]

Interested in how this works…. How do estate agents tell their ‘clients’ that they’ve massively over valued their house and need to drop the price in the order of 6 figures?

in our rural village the local ‘small town’ estate agents didn’t realise the falling market until it was way way too late. They kept valuing houses up and up all through the summer but none of them are selling. Some of the bigger houses IMO are vastly over valued and just wondered how/ if / when the estate agents tell their clients that they valued it wrong.

for example (I’ve posted about this before) house listed in May for £700k. Last sold jan 2022 £525 and no work done/ no reason for vast price increase. Bigger and better properties now being listed for £600k.

They base their valuation on what they think people will pay, they don’t really have to ‘admit they’re wrong’ but people will typically drop the price if it’s not selling.

What do you hope to achieve by them admitting anything? Is it your house that was valued or a house you were buying?

O_O

Them's some hefty numbers.

Part of the problem is, a lot of EAs would have never seen anything but a rising market, and it's caught a lot of them unawares, and they're not really dealing with it very well because they've neither experienced it, nor been trained on how to deal with managing expectations in a falling market.

@Changingplace nothing at all, no agenda. I’m merely curious as I walk past these over priced houses every day and just wonder what sort of conversations are happening between the agents and vendors as the prices are so clearly clearly wrong. Everyone else in the village agrees, not just me.

We were looking to upsize (so buy and sell) so are keeping a close eye on the market but we don’t need to move so
will likely stay out for a few years.

im not looking for the EA to flagellate themselves nor is this a nasty post, I just feel the reality could be a big shock as it’s a massive amount of money

Estate agents will never admit they have it wrong - they will blame anything else, more recently inflation, competition in the area, the house, the buyers etc...!

People overestimate EA, PHD in macroeconomy are rarely going to work in house selling business. They price to get the business, with the hope markets catches up to their number. It doesn’t work as well in a falling market.

I've noticed this seems to apply to houses where the couple are divorcing, and one party doesn't want to sell the house.

I'm curious too. Nothing is selling in my village. My next door neighbour bought for £435k in 2018. His house went on the market in April for £820k. Reduced to £765k in September. Now taken off the market. They have literally done nothing to it.

Another house on our lane bought for £350k in 2021 ( absolute height of prices here,) now selling for £450k in a falling market. It's bonkers.

@Movinghouseatlast holy shit to your neighbours price!!!!!

I thought my village was bad! Yes a lot seem to be older people downsizing that don’t need to move so maybe they will just leave the price as is, or take off the market.

In my experience nothing gets said. They blame the market and focus on other houses on their books.

We must live in the same village 🤣

Bungalow in the village was bought to be flipped in April. A frenzy of work, primarily to the garden, ensued, back on the market in October for 25k over houses in the village that have an extra bedroom, extensions, big gardens.

The only thing I can think is they’re assuming a bungalow attracts a niche market who will pay a lot more for less. God knows. Personally I think they’ve fucked up the numbers but time will tell.

Are you sure it's the EA and not the vendors over-valuing? People hate to admit that their house value is less than the imagined figure in their minds and if an EA says it is worth £X and the vendor thinks it should be £50-100k more it can be very difficult to persuade them otherwise. Sellers need to read the market conditions and get out of the mindset that their house is always going to be an appreciating goldmine.

our local (very small town) estate agent consistently over prices. At one viewing I pointed out that the property had been on the market without an offer for 6 months in a falling market and I thought it was over priced and would be making a low offer.

Her response was a deeply sarcastic ' oh ho so you think you are an estate agent now do you? What would you know about valuations?'

I just replied that I know what I am willing to pay and [stock answer] a property is only worth what someone will pay for it.

Based on that exchange I will never buy or sell with that agent - despite them being the only ones in town!

This is very timely. I have just spent 10 mins on the phone listening to an EA rant at me as to why my offer is too low (6% under asking so not that bad) but the house is on a busy main road. They’ve already had to reduce is once and he will now have to go back to his client and tell them that after two months of marketing, that’s the only proceedable offer they have.

He said to me ‘I have no idea what things are worth’ I felt like telling him to F off quite frankly. But it’s all panic because he’s completely fucked up on the pricing and he has no idea what the house is worth, despite it being his job to know.

Our village prices are bonkers too range from £2.2m to £195k , many have been reduced and on the market for years, the lower end of the market up to about £300k is still slowly moving. Again I don't understand how they price these houses and many vastly over priced, no idea where they get there figures from.

I'm no pro, but I've been watching a specific street for the past year and the houses that aren't selling are still on the market because they are priced 50k-75k higher than they should be. We offered 11% below asking on one several weeks ago, but the vendors won't budge on price, not even a counteroffer. It's still on rightmove. 🤷🏼‍♀️

We're about to go on the market (soft marketing only till Feb) and are hoping to move 'home' to a different part of the UK so have been keeping an eye on prices both there and here.

Our nearish neighbours bought their - admittedly huge - Grade 2* period house for £1.5m in 2015, have done virtually nothing to it and put it on the market in May this year for £2.6m. We've heard rumours that they had quotes for around £1m of work needed. No price drops since listing. Spoke to seller recently and he's adamant he'll get asking price.

The EA we're using (different one to the big house) valued ours at £495k. We're wanting a relatively quick sale so are going on at £450k. They told us they're getting called in by lots of elderly downsizers who are very delusional. One said they wanted £250k for a bungalow that hasn't been touched since the 1960s. She informed the vendor they'd be lucky to get £200k in the current market for a property in that condition....so it's not just the EAs at fault imho.

The road I live on has some very large Edwardian houses, lots of houses built in the 1920’s and a smattering of modern houses that were built on what was an orchard till about 30 years ago. The road attracts a premium just because it is a nice road. However nothing is currently moving. One very nice detached 1920’s house has been for sale for 18 months, it was way overpriced at first. It’s been reduced but I think when houses are on the market for ages people are suspicious.

Not the same type of houses as they’re all 2-3 bed terraces but I live in what until recently has been a super hot area for property, lots of one day viewings, sealed bids, offers over etc and for the first time in years and years houses are sitting on the market for months and getting reduced so it looks like the agents here haven’t quite caught on yet either.

These are 2-3 bed terraces on the market for £420-450k which seems crazy so it can only be a good thing I suppose?

Estate Agents are probably the most thin skinned people with the easiest bruised egos you're ever likely to meet.

They hate having to ever admit they're wrong about something even to the point of it costing them financially.

When I was looking to buy I had numerous offers rejected, only for those houses to then remain sat unsold for many many months before either being withdrawn from the market or in several cases eventually selling for less than what I'd previously offered.

At no point did any agent ever get back to me to see if I was still interested and if my offer still stood, which must have been down to either pure incompetence on their part or they were too proud to come crawling back to me.

@Yants i agree I have had terrible experiences as a buyer with estate agents in terms of not getting back to me etc. we were in the process of buying one of the most expensive houses they had on their books and they would go a week or more to reply to an email! If I was the vendor I would have been furious!

Thing is, it's not an exact science pricing a house. Especially in these days of extensions, renovations, styling etc People need to realise a 'valuation' is a best guess and then the market will show whether it was accurate or not - ie whether anyone wants to buy it at that price.

In addition, as this thread shows, sellers are often completely unreasonable and if they insist a house goes on at a certain price, then there is nothing the EA can do about it. They base it on the price they want to receive which is often widely optimistic.

In the end, what does it matter? A seller can ask whatever they like and then make a decision based on market interest. And everyone who puts something up too cheap and it sells immediately in the first few days, is kicking themselves afterwards.

The vendor is not in a position to tell the EA what price to market at. The EA would have to accept that and if they do then more fool them as they carry the liability until the property is sold, if ever. In short, there is everything the EA can do about it.

Ultimately, if the buyer requires a mortgage, the lender decides the price. A vendor could ask for 1mil, the buyer accepts the price and can afford a mortgage to that price, but if the bank says its only worth 100k, that's how much it is worth.

Simply, the EAs that do realise they were wrong will survive the next 5 years or so, the ones who do not will go bust.

So not many will be left, in other words. Everyone is a genius in a bull market.

😅