A property sold for £5m more than its asking price after a bidding war – leading a buying agent to warn that selling agents’ pricing in parts of London “is all over the place” at the moment.
The unmodernised house in Holland Park went on the market with a well known national estate agent at around £13m – or around £2,500 per square foot. We have been asked not to name the selling agent.
A client of buying agent Black Brick was interested in the property, which is in an area where prices are down 15% from peak, and where agents and analysts are complaining of weak sentiment and low transaction volumes.
The client was outbid as a short bidding war and a round of sealed bids led to the property selling for over £18m – working out at £3,500 a square foot, which is thought to be a new record for the area.
Caspar Harvard-Walls, a partner at Black Brick, said: “For really high quality, best in class properties, there is serious competition out there, partly because there are so few of them on the market. As with the Holland Park property, we’re seeing them change hands at record prices.
“Lower quality properties, on the other hand, aren’t moving and, in fact, many aren’t coming to the market at all. If vendors don’t need to sell, they’re renting them out instead.”
This poses particular challenges for buyers, Harvard-Walls continued. “It is very hard to work out where value is.
“Getting a sense of when a property is going to go off like a rocket is extremely difficult in this market. Pricing is all over the place.
“It’s very important that, when buyers get into a competitive bidding situation, they act rationally and calmly. It’s very easy to get massively carried away, and overpay for a property.”
Comments (8)
I’m not sure this is news.
It seems like it is after all £5m over asking price! But Holland park is a very limited market so there is always the possibility of demand outstripping supply, particularly if this house has a bit more about it (views or garden etc).
I think the agent probably didn’t research the price before going to market but assumed.
The rule should always be.
Use past sales prices as a guide and present buyer database to determine a likely asking price, if you just go on the past sales price only then you would never have house price inflation.
No doubt this prompted a ML SAR to NCA. If you are an agent and don’t understand, you should!
Random rhetorical question; when a buyer’s agent’s client pays more than the asking price does the BA contribute towards to additional expense at the rate used calculate their fee on a saving?
Or a different take on the story
Estate agent does great job for client, prices property attractively, creates interest, selling house for a record figure. Buying agent doesnt understand the value of property gives client poor advice.
Sorry Arthur buying agents don’t last long in the world you just described. The selling agent got a result but not through their superior knowledge of the market.
Perhaps the agent got luckily, but the bidding war and record price was a direct result of the asking price which was more than likely set by the estate agent. With this probably being the case one would have to presume that the advice provide by the estate agent was the key element in the above result.
You are both right. Or wrong. Or neither.
The variables are that:
The (Selling) Agent ‘low-balled’ to intentionally start a bidding war.
The Agent undervalued – market forces took over and compensated for the Agent’s inability to price correctly.
The Agent priced correctly – but buyer need/want prevailed.
The Agent overvalued – all other ‘rules’ went out of the door at lightning speed.
and a million other permutations – most of which lead to the presumption that the Agent presumably has one majorly happy client.
And on the ‘buying’ side:
The (Buying) Agent lost their client a property in trying to increase their own cut from the deal.
The Agent ‘saved’ their customer from overpaying – and either got a retainer or nothing for the exercise,
The Agent has one happy customer.
The Agent now has one majorly wazzed-off customer.
It’s fun, this housing malarkey… innit!
Arthur, there is absolutely no evidence to suggest that you wouldn’t achieve the same price is listed at £15m. It possibly/probably would have done, given they were prepared to pay £18m. Therefore you could say it was undervalued but £2m, or 15% – and the property prices in that area aren’t actually down 15% as people are stating.