Over pricing is generally done to secure a sellers property onto the market with that Agent, they then have the seller tied into a long contract with a longer cancellation period.
It is a low skill and unethical way to secure properties onto the market.
When a house is over priced it can cause a whole host of issues, one of which is when it come to the Mortgage Valuation Survey, if there are no other comparable properties that has sold in that area, then the property is likely to be down valued meaning that the mortgage lender won't lend that amount of money to the Buyers. This then leads to renegotiation on the price and can potentially cause the sale to fall through. If the price is renegotiated it can be the difference between the Seller being able to proceed with their onward purchase or not.
Over pricing can mean that a house sits on the market for a long time, this makes people wonder what's wrong with the house or the area so is detrimental in that respect.
It also means that potentially the Agent is going to have to speak to the Seller about reducing the price leading to the Seller losing faith in that Agent.
There are questions to ask the Agent before someone comes to value your home;
Does the Valuer gat paid to put houses on the market or are they paid when the house is sold? If a Valuer is paid to list a house then there is no incentive for them to sell the house and they can price it at whatever they need to to generate the business and hit their targets.
Will the Valuer be your main point of contact during the whole sale process or will you be passed to someone else as soon as your house is listed and then onto someone else as soon as a sale is agreed?
Do you want your biggest asset to be looked after by one person that you have built a rapport with and trust, or do you want to be passed around to different people you don't know?
Would you rather use a large corporate Estate Agents who are generally just chasing figures and pound notes, or a smaller Independent Agents who care about you, your home and giving you the best advice and service possible?
Food for thought...
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