Agent has reduced initial valuation

[LavenderLxx]

We had several estate agents value my late mother’s house. They ranged from £725,000 to £825,000 with the majority being around £750,000 - £785,000.

We decided to go with the estate agent who valued it at £825,000 - this was the highest valuation, they also had the lowest fees and we liked him the most.

I met with him today to confirm the paperwork and he has said that on reflection he thinks the house is worth £800,000 but we can still put it on the market for more if we like.

Not sure what to do? There is no onwards chain and we’re not under any time pressure to sell quickly; but obviously don’t want it to just sit there if it’s priced too high. Any thoughts?

When selling I got 4 agents to value. One agent said £250k, two said £275 and one said £285

The £250 came from a local agent who had been around for ages and had a website that looked old fashioned. The others were flashier. The one with the top quote was very smooth and had a whole load of spiel about how it would reach that.

We put in on for £275, figuring the ones in the middle were probably right. But, it stayed there for ages, and eventually sold only when we dropped the price - to the lowest estimate, £250k.

This was a decade ago, but lesson learnt!

It’s not going to sell for £825K. It’s not even going to sell for £800K. If most of the valuations are coming in at £750K, then it’ll probably sell for about £725K.

I wouldn’t sign the contract with someone who lied to get your business. Pick one that suggested £750-760K and accept anything over £725K. If it then sits on the market for 6 months, you’re going to have accept it’s going to go for £700K.

You’re in no hurry to sell but the longer it sits on the market, the less likely you are to get asking price. It’s also longer that you’re dealing with the administration of death, rather than being able to grieve.

not higher than 799k

Years ago I got 2 valuations on a house for £500-530K and one at £575K. It didn't move at £575K or at £550K and the agent was really expensive!

I swapped agents and put it on at offers over £500K, which was a bit of a lowball. I did worry about it but we needed to sell. Much to my surprise, there were then lots of viewings, a small bidding war between two buyers, and it went for £530K.

People really worry about undervaluing a house, but I actually think it's riskier to put it on at a price that gets no interest and means the house sits there for weeks going stale reducing your chance of getting any offers even if you reduce the price later.

I think you're always better off putting a house on low and getting lots of interest because that will get you to an offer that reflects what the house is actually worth in that market and that time. If you put it on too high you'll either get no offers or one buyer who you're desperate to keep and who then throws a demand for a reduction at you at the eleventh hour.

(Edited to add some paragraphs and clarify some bits)

Also (sorry to bombard the thread), you need to think about how search engines work on property sale sites. It's absolutely crucial to put it on in the right band. In your case, if the reality is that it's going to sell somewhere in the £700-750K band, you do not want to hide it in the £800K band where most of your market is just not going to be looking because they don't have the money, and where people who do have the money are going to want something bigger or smarter or whatever.

Agent’s valuation is irrelevant other than as the broadest of guidelines. I would certainly not price at the top of the range in this market, and would work on the basis that the true value is the bottom of the range or below that.

We had 5 valuations all between £1.4m-£1.5m. So we put it on at £1.45m. Quickly had to reduce price, got bad advice on by how much so went to £1.35m (should have gone straight to £1.25m to get into the lower Rightmove band). It took us a year to get offers, at £1.2m.

Where I live (Home Counties commuter town) everything coming on the market is reduced within a month. The market is not good and agents will suggest it’s better than it is because they want the new listings as sales are taking so long to go through.

You probably don't like the replies on this thread, as you seem swayed by the higher valuation, but the advice on here is all spot on IME. Advertising at a Rightmove price point is a really good suggestion too.

I would tell the EA to fob off.

It is called buying the commission. Giving an initial "valuation" is a sales pitch where the estate agent evaluates your motivation for sale.

A true valuation is a RICS Red Book one and they cost money. An estate agent only gives a figure that they think they could sell it at. The first part of them making the sale and not a competitor is getting the vendor to sign on the line.

Once the EA has you signed up they will usually ask for a price drop.

https://moneyweek.com/investments/property/rightmove-average-asking-prices-slump
I'm on Rightmove constantly as we're trying to buy but have been messed about by demanding sellers. It's not really the market for sellers to be demanding though. Houses are reducing all the time.
If you're in no hurry, maybe wait it out. Buyers can be quite picky though currently as there is just so much choice.

If its for inheritance tax aren't you supposed to get a proper RICS valuation.

I don't mean this rudely but your lack of experience is showing... its not worth £825 obviously and you NEVER go for the highest valuation (common scam to overvalue hoping the seller is greedy which he basically just admitted) and an utter waste of time to ask that.

You'll sit on the market for months at £825, reduce down to what it should have been but by then it will look bad and be far too late... you'll chase the market down and not sell.

Just of the numbers given if you want to go high I suggest you list at £750k and reduce to £725k at 5 week if no offers.

Also if your selling for probate you had to get a proper RICS valuation right? what was that?

Also you are aware if you sell for more than the price submitted to probate (if it goes up in price) you pay capital gains on the sale right?

So essentially you will be taxed twice, its a common scam for people to claim an estate is worth less for inheritance tax and then try and sell for more, the tax man doesn't allow it.

Thank you all for your replies - lots of interesting food for thought.

To clarify - it was valued at £750k for probate last November. It’s an expensive village with good train links to London, good schools etc. It’s a very sought after location and properties tend to sell quite quickly. Even if it sells for more than the probate valuation we’re still under the inheritance tax threshold.

It’s a 1970’s house - but had a very newly renovated kitchen, bathroom and decorated downstairs. Although it’s a probate sale it is quite a modern looking house that would suit a family.

We’re not yet tied in to the estate agent that we have chosen hence me asking for advice here. I’m tempted to go lower to £775k to get more interest but my brother wants to go more towards £825k as was initially suggested by the EA

It's likley to be worth quite a bit less than last November's probate valuation. Things have softened a lot since then.

If it were me and hard to value I might use OITRO but that may not be suitable, it depends on your particular details. Maybe Guide Price is a similar method.

Some buyers don't like OITRO but I think they are a bit silly. At the end of the day you offer what the house is worth to you, or don't offer at all if you think the chance of acceptance is low.

But if you do use this and market low then if it turns out there is a lot of interest it becomes a bidding process amongst interested parties rather than being put under pressure to sell to the first buyer that meets the advertised price.

All depends on how long you want it to take really.

@housethatbuiltme
My mum was given a range of valuations and went with the one that we all thought was outrageous.
It sold.
Different market to todays, but her location and land was the selling point.

Well, if you're selling with your brother and he's not going to be able to sleep for worrying that you could have got £825K then I'd probably put it on at that but have an agreement with him about how long you'll wait before reducing if no buyers come along. But it would annoy me because the estate agent blatantly overvalued it to reel you in and his tactic has well and truly succeeded!

Also, you won't get any of the money spent on recent renovations back unless the effect of the renovations is to add a room. However great the house looks, it will not sell if it's overpriced.

Inheritance tax doesn't matter, if you are at the point of selling probates already been granted and inheritance tax has been done.

Any growth on top is then a different tax, it becomes capital gains tax. Capital Gains is when you sell something for more profit than it was acquired for, in this case thats the valuation submitted during probate (a legal declaration of its value at that point in time).

If you managed to sell for £825 you would pay CGT on £75k (CGT on property is currently 24% so I think you would owe the tax man 18k).

Re current valuation, have you done a dispassionate look online at similar properties to see what they are currently on for? And how long they’ve been on and whether they have been reduced?

With the new kitchen and bathroom, are they the sort that you would see in a house that has been done up by a family? Are they the sort of kitchen and bathroom people in their 30s/40s would want? I think it’s quite common (not universal!) for older people’s taste and standards of new to be different and the result can be owners who think they are presenting a perfect house and viewers who are thinking they’d want to change it all. Eg (tiny example) a kitchen in an expensive house that has had laminate work surfaces put in because that used to be standard. Or a new bathroom with tiling that feels very old fashioned. What sort of kitchens and bathrooms do the houses that you’d be competing with have? Is the general decor, however freshly done, going to get viewers thinking that they’d want to redo it fairly soon, even on taste grounds?

@LavenderLxx I would show your DB this thread and see if it helps to focus his mind away from thoughts of the highest price possible (but in reality very unlikely).

Nobody can actually say whether the house is overvalued or not and nor can they comment on whether house prices have dropped as it is, IME, very area dependent.

However, if the EA is saying £800k then I wouldn’t bother trying to go above that. I’d also go with another agent as he’s obviously overvalued to get your business.

I’d also go with another agent as he’s obviously overvalued to get your business

Alternatively, the agent could be very well be saying, "look, the market has changed a bit since we originally discussed prices back in November, and I now recommend listing no higher than £800k."

I'm not sure it's an obvious overvaluation, sounds more like an agent who knows their market and is advising a prospective client that the outlook has changed.

I am not sure I would go in at the highest valuation in this market. In my village (Northern Home Counties) anything over £800K has been sitting on the market for best part of a year. Someone had a house up for £800K, which was eventually reduced to £725K and then sold. Once Probate is granted you only have six months to sell before paying council tax which doubles after a year.

What you should sell it for aside, it costs money to have a house standing empty.
Council tax, electric and water. Heating. Insurance - make sure they know it's unoccupied, abd be aware of maximum time it can stand empty. I know someone who's house was empty for 6 months. The waterside burst, insurance didn't cover it. They spent many thousands sorting the room a it was in the loft. New plastering, new floors, new pipes...

Hopefully yours will sell quickly, but dont let the costs mount up.