A PropTech firm has claimed estate agents are deliberately overvaluing properties to gain listings, risking further damage to the sector’s reputation.
Spectre, an instruction generation tool launched by Agent Software, suggested agents are reacting to challenging market conditions, lower transaction volumes and increased competition.
But it warned the continued overvaluing of properties could have financial implications for consumers and may negatively affect the public’s perception of estate agents.
A lack of buyer interest due to a high price could mean a property is left on the market for much longer than is necessary, while the subsequent need to reduce the price could put vendors on the back foot when it comes to negotiating.
“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,” said Heather Staff, co-director of Agent Software.
“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.”
If an increasing number of consumers have the negative experience of an agent overvaluing their property and this impacts on their eventual sale, it could damage estate agents’ public reputation, Staff warned.
“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,” she argued.
Staff said vendors are increasingly aware of their ability to switch, particularly if they feel misled by their existing agent.