Estate agents deliberately overvaluing properties to rake in commission
Estate agents have been caught out, and it couldn't have happened to a nicer bunch.
Doing nothing to detract from the notion that they're money-grabbing liars who would sell their own grandma if it furthered their career, it has now emerged that those charging the highest commission fees are deliberately overvaluing homes by up to 20%.
This means that when the property inevitably sells at a lower price, the owners still pay larger fees.
An analysis of 200,000 houses listed online found the biggest agents — including Foxtons, Hamptons International and Chancellors — are the worst offenders.
In an investigation by The Times, it emerged that the 10 agents who overvalue the most are charging twice as much in commission, on average, than the 10 who undervalue the least.
So this works out as the equivalent of paying £5,500 commission on a £300,000 home as opposed to just £2,200.
The National Association of Estate Agents admitted some “unscrupulous agents” try to win business by quoting a higher asking price.
Buying agent Henry Pryor added: “The scale of overvaluations is shocking.”
The investigation showed that almost 60% of homes listed by Foxtons had to be reduced from the initial price, compared with the national average of 32%.
On top of this, Foxtons charges a commission of three per cent, more than twice the national average.
Foxtons said: “We always price properties competitively in partnership with homeowners.”
This follows news that house prices in the UK fell by 1.6% in March to an average of £233,181, correcting the rise recorded in February, the latest lender index shows.
Russell Galley, managing director of the Halifax, said that the focus should not be on monthly figures as these can be too volatile to give a true picture of what is happening in the property market.
‘Industry wide figures show that the number of mortgages being approved remains around 40% below pre-financial crisis levels, and we know that lower levels of activity can lead to bigger price movements.
‘The more stable measure of annual house price growth held steady at 2.6% and is still within our expectation for the year. The need to build up a deposit before getting a mortgage is still a challenge for many looking to buy a property,’ he pointed out.
‘However, the combined effect of fewer houses for sale and fewer people looking to buy continues to support prices in the long term. These conflicting challenges, when combined with the ongoing uncertainty around Brexit, have had an impact across the country but most notably in London, meaning that we continue to expect subdued price growth for the time being,’ he added.
If you're getting on the property ladder, make sure you get home insurance.
Go to A Spokesman Said and find the best deals for you.
Here at A Spokesman Said we love fighting for your rights and believe passionately in natural justice.
But these battles cost us money. You could help us fund these fights by using our price comparison site, A Spokesman Said for your energy, car insurance and household bills.
We’re just the same as Go Compare or any other price comparison site, so you won’t be losing out in any way - by helping us, you will be helping yourself.
Thank you for your support.
When did you last switch your home insurance provider?
We compare prices from the big brands, so you save money