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‘It’s time to stop estate agents over-valuing homes to gain instructions’

Claim is made by former eMoov boss and now PR man Russell Quirk, who says the practice is 'tantamount to fraud' and should be stopped.

Nigel Lewis

property valuations

Former eMoov boss and now PR man Russell Quirk has called for property valuations to be regulated to stop the practice of over pricing homes to win instructions.

In an incendiary blog published yesterday that will no doubt infuriate many agents, Quirk argues that too many are being lazy or revealing their lack of experience when deliberately or mistakenly over-valuing properties to gain an instruction.

When done knowingly, this tactic should be considered ‘tantamount to fraud’, he claims.

“The definition of fraud is the act of attempting to gain through deception and via deliberate trickery,” he says.

“Therefore, telling a prospective property seller that they should expect to achieve £450,000 when £400,000 is the real number, is as dodgy as a timeshare salesman on a beach in Tenerife.”

Russell Quirk, Emoov, imageQuirk (left) says that, because most vendors sign sole agency agreements of up to four months, agents feel they can over-value a property and then persuade the vendor to reduce their price to a more realistic figure as time goes by, safe in the knowledge they have only one option as the weeks tick by; to agree to a lower asking price.

Quirk is not alone in calling for property valuations to be regulated. As The Negotiator reported in September last year, leading Jersey agent Broadlands Estates said the practice should be banned after becoming frustrated by competitors ‘wildly inflating’ property values when bidding for instructions.

But over-valuing may soon be consigned to history by tech. Proptech firm Swirb recently revealed its platform will soon be able to tell vendors when agents were over-pricing their home.

Read the blog in full.

January 6, 2020

4 comments

  1. Having dealt with a substantial amount of agents, many as clients, the consensus out there is that the vendor or prospective vendor 90% of the time already has a pretty good idea of relative property value, prior to any agent knocking on the door and giving their opinion.

    In 1985, we were the high priest of property, it was us, the local agent who had all the information on what sold for what, yes property was advertised in the newspaper, but only the agents ‘knew’ the true selling prices.

    In 2019, there are. and I just checked them 19 free indexes that a property owner can use, prior to an agent coming to see them, all digitally available, from googling their address and asking google, to some pretty advanced analytical databases.

    So, I think the debate about agents ‘over valuing to gain instructions’ is a bit of a myth. Vendors instruct credible, knowledgeable and professional agents, and to sky a value, given the owner has a pretty good idea of their property value – does nothing but damage an agents chances of getting an instruction.

    Regarding over-valuing and then reducing price, in 2019, the top listing 10 agents in the UK reduced 50% of their stock before selling it, sometimes the same property was reduced in price multiple times.

    Was this a cynical ploy to inflate marketing price to gain instruction? No, probably and I know it is a scary concept agents were starting the selling process at an optimum figure, maybe the vendor wanted to try a high figure, maybe the agent had a buyer who would pay a premium due to some factor.

    In 32-years of selling property, and there are many much more experienced than me, I have sold similar properties in the same year, for very different prices, the variables, time of year, war, recession, interest rates, stamp duty changes, the list of variables goes on.

    Pricing is not an exact science, but all agents need to sell stock, to take overvalued stock to market does not help cash flow, it weakens market penetration and the ‘mums at the school gate’ and the ‘men on the allotment’ mutter – that agent does not sell much – the kiss of death to businesses who rely upon local marketplaces where people talk.

  2. This has been going on for as long as I can remember. I will be interested to see how some online platform will be able to tell if a house if over-valued or not…
    The truth is, a good estate agent will be able to explain how a vendors’ home is valued, I just valued a house at £295,000 to achieve £285,000 and the vendor said the previous agent told them £335,000…(he even showed me the letter)i’m pleased to say it’s coming on to the market with us. The vendor said “I could buy a nice Porsche with the difference in value, but I know they’ve over valued it”.
    I thought BPR was in place to stop this type of practice…?!

  3. Where does overly ambitious end and fraud begin? Does Russell have a percentage figure in mind?

    I see quite a few KW properties reduced in price? Were these examples of ambitious marketing, or unrealistic expectations?

    Yet more sensationalism from one who loves the sound of his own voice, but lacks the logic to back up his claim.

  4. Online agents are the worst culprits when it comes to overvaluing, partly as their local experts (a contradiction in terms in itself) get paid on instructions and partly to boost their portfolio. The local experts are usually negotiators who don’t have the ability or knowledge to compete by themselves. Two of the many reasons Emoov failed was poor inception and poor management.

    Quirk should get his own house in order before throwing flippant comments.

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