Agents who over-price are contributing to the housing market slowdown, a former NAEA president has claimed.
Simon Gerrard, managing director of London agents Martyn Gerrard, says he is seeing agents overprice to get new instructions, rather than focusing on selling what they have and getting potential buyers through the door.
He attributes the lack of housing stock and activity to Brexit uncertainty and Stamp Duty costs, but warns that agents also share the blame by putting buyers off with high prices.
He said: “The price is the first thing a buyer sees. [At my own firm] we tell vendors we have full market coverage and explain that if an asking price is lower it will do better and get more views than if you got nobody round and had to lower the price.
“The difficulty is having the quality of person to explain that, and also getting the vendor to understand.”
Gerrard also said he was considering proposals he could make to the Government on how to reform Stamp Duty, which he said could get the housing market moving.
He said: “The only reason the market crashed ten years ago was a lack of funding and demand. That is not the case now.
“The Government should think about Stamp Duty and how important the property market is for the wider economy.”
During the crash of 2007/2008 many agents offloaded staff or didn’t replace leavers, but Gerrard says now is different.
He said: “Last time you could afford to do that. I focus on the total opposite. I’m looking for good-quality staff.
“The greatest assets you have are quality staff, training and aspirations. If you have staff that are good, they can work well and explain things and make the market move.”
Gerrard reported that his branches are up on last year and are still seeing strong demand.
Comments (9)
how many times do we have to say that overpricing comes from lack of supply, and not agent greed. Demand is through the roof which automatically increases prices… duh! You can’t blame an agent for following that path to a lucrative end.
Build more houses and then see what happens.
When was it that this subject was last in the ‘news’? No more than a year, I would suggest.
Is this some form of 5-Step Journalism technique? Groundhog Day for Estate Agency?
Step 1: Pick a commonly used theme for a headline
Step 2: Grab someone to endorse it.
Step 3: Pad it out – it’s not news anyway
Step 4: Add a mention to the next potential “news story” in the making
Step 5: Press ‘Publish’. Start cycle again.
Looking forward already to the next thrilling instalment of Stamp Duty bashing…
Oddly enough I use the RM stat “time on market” with the agent, us, (Number 1) and all the agents in the area showing that we sell faster than anyone else.
A couple of agents then said they sell higher price property which take longer.
So I now always take comps of property sold at the higher end of the spectrum to show we sell in all price ranges just as fast
Try running the time on the market stats on Rightmove. It soon shows up those that overprice as their properties are on the market a lot longer.
Oddly enough over pricing isn’t new but I have noticed recently a wind change by how much agents are over pricing.
I.E.
House priced at £420K (try £460K if you really must Mr Vendor, but so long as you don’t do it for too long as it probably will do you more harm than good)
It went on for £520K and obviously no viewings, no interest and NOT on my books !
One example? No !
20% Plus over valuing is rampant, 10% we can live with but 20% or 30% + ????
Do I phone him up every week to see if he wants to change agent? No he signed up for 20 weeks but I have diarised him for a chat at Xmas. What more can I do?
He will come back and say “How can my property have dropped a 100k” – Will go with the other agent that just advises a “Change in marketing”
We have been facing this for last 3 years with properties 100k overpriced.
£100k that’s nothing, I’ve been to see 1 that is over £1m out. The owner challenged me as to why I was giving my advice and how could he have lost so much value having had 2 buyers before! I asked him to define buyers. The first person was a high profile ‘sportsman’ who’s wife over ruled him so withdrew his offer; the second had an offer accepted, but after 6 months and not doing anything with the contract as he had a problem with his money that would take a while to sort out, had the contract pulled from him! The clients argument was that this proved his price and his agents agreed.
I told him that all of them were wrong. He rightly challenged me. I produced evidence from 12 other properties that had sold that I and others had been involved with…all under his figure. I then pointed out that there were another 121 for sale and remain unsold in the price range within a 15 mile radius. He felt he would need another opinion, so I agreed. That agent told him there was nothing wrong…just his existing agents were using the wrong offices. I said that I felt there was no point in continuing the discussion and wished him well. He asked what made me think I was right…my answer was along the lines of ’35 years experience and the fact you have been on the market with 4 different agents since 2014′!! 🙂 Wake up everyone..certainly at the top end and beware those of you battling for market share at the lower to middle end when the market faces headwinds. I do accept there are certain property types that have more easily accessed comparable evidence, but human greed leads to stupidity.
Ask him to get his Rightmove property performance chart through the existing agent ( he can say a friend of his used to get them all the time from their agent)….then go through it with him and compare it to charts of properties that you have sold.
If you want to know what I usually use and say… contact me direct in@agentv.co.uk
It can work a treat, if you say the right things to make people sit back , think and say ‘yes that’s what I do’.
This has been going on for years please don’t tell us you only just noticed!
No matter how good the staff are there will always be some oik who will undercut for the business and most of the public only care about service if it’s cheap .
As for the crash 10 years ago there was a blanket financial credit crunch across the whole financial market, country and most of the world!! It ‘s start had nothing to do with the property market but encompassed it as one of the major financial indicators of this country however in essence it slowed down and dropped prices in some areas thus enabling some first time buyers to get on the ladder so it wasn’t all bad.