'Keep property values realistic'
Talking recently to a group of trainee estate agents, Tony Clarke, managing director of Rawson Properties, said they should avoid trying to please sellers - and possibly secure mandates - by valuing homes too optimistically.
"This invariably leads to a loss of reputation. Make it crystal clear to sellers that, if they appoint agents because they have valued their homes higher than their rivals, they will be making a mistake."
Clarke said on most sales two or three agents will usually give values fairly close to each other. If another agent then gives a higher valuation the chances are he/she doesn't know how to value or is trying to secure the mandate by telling clients what they would like to hear.
"The market and the banks dictate prices, and buyers are usually acutely aware of comparative value. If agents value out of line my advice to clients is not to listen to them."
He said the tendency to overvalue can be enhanced by the seller's suspicion that the realistic but low estimate may be suggested because agents wants quick sales. However, successful agents build their reputations on achieving good prices, not on quick, easy sales.
If the seller insisted on a too-high price, it was probably wiser to walk away from the deal, Clarke said. If not they could spend six months failing to obtain and meet the list price - and then have to persuade the seller to drop it.
"In eight cases out of 10," said Clarke, "when this happens the agent is accused of incompetence. Sellers may well find their home has picked up a stigma as a result of being on the market for too long."