Evidence of sales agents aggressively over-valuing properties to gain instructions has emerged following research by proptech firm Agent Software, which has blamed the trend on “tricky market conditions”.
Some 1,000 or more agents use its Spectre tool to generate instructions and the company says it has received increasing number of them reporting aggressive over-valuations by competitors.
“The vast majority of agents value properties correctly and offer fantastic customer service, but it’s those who don’t that cause problems for the industry as a whole,” says Heather Staff (left) from Agent Software and one of the co-creators of Spectre.
“We work with thousands of agents across the country and the feedback we’re consistently getting is that in a competitive and challenging market, some agents are overvaluing in order to get the instruction from the vendor.”
The company says it is picking up the increased over-valuation because its Spectre tool is designed to help agents spot properties that have been over-valued and then target their vendors for the ‘second instruction’ when the first agent fails and they come out of contract.
Agent Software claims that over valuations mean some properties languish on the market for longer and leave vendors in a weaker position when price negotiations begin.
“These factors combined mean that property sellers whose homes are overvalued could end up selling for significantly less than if the property was marketed at the right asking price from the beginning,” says Staff.
“This scenario represents a financial cost and loss of time for consumers as well as a negative impact on the agent’s final commission fee.”