14 Aug Valuation – what’s the difference? Online-only vs the high street
The popularity of online-only estate agents and their promise of cheap fees has prompted speculation over recent years about the future of the high street estate agent.
However, it seems the cheap service has been tried and tested by enough home-movers over the last few years and, although there is a place for the online-only firms, the tables are firmly turning back in favour of the high street.
In this series of articles, we’ll explore the evidence which leans towards a winning high street agent.
So, we’ve looked at trust, and the difference in business models. Now, let’s break the service down into bite-sized chunks…
First things first – valuation
We all want absolute top dollar for our homes, right? Well, maybe that’s unrealistic but we do want as much as possible; a fair price, and that starts with the valuation. There is no scientific calculation to reach a market valuation figure, but there is an art to it, based on the precise location, size, condition and features of a property, and of course the local market conditions.
Pricing a property too high will generate very little interest, especially if there are other directly comparable homes for sale at lower prices. It has been said that some agents over-value properties just to get the instruction, but what’s the point in that if they’re going to hang around on the market, just to be reduced in price at a later date? On the flip side, an estate agents’ job is to sell homes to the best buyers at the best price and they would be doing their clients an injustice if they were to achieve anything less. After all, if they undervalued, they would never get any business!
So, how do the different agencies reach their valuation figures?
Operating from national call centres without people ‘on the ground’ so to speak, online-only agents will most often arrive at a valuation using algorithms, which look at a combination of online data including Land Registry sold prices and current asking prices of property within the location to produce an estimate. These estimates do not, of course, take into account variables such as improvements made since a specific property was last sold, and the valuations generated fall within a very broad price range. They give a rough idea but shouldn’t be relied upon for actual marketing purposes.
Hybrid agents have people who visit properties. The major point of difference here is seen at either ends of the hybrid scale – those with a local office will employ experienced local people, who will draw on their expertise, and those with a business model closer to the online-only end of the scale will send a ‘local property expert’ (LPE) to your home, which fulfils that personal inspection element of need. However, that expert may not actually live locally – indeed, we recently heard that an LPE in the Westcountry was travelling up to 60 miles from his home to value properties, so we would question their level of expertise in the local, and indeed sub- and micro-markets that can be found across our region.
The market and indeed the market value of any property is in a constant state of flux, so the only way to get a valuation that takes into account all variables, is to ask a local estate agent. In fact, we would advise inviting three agents to provide valuations, which also provides the perfect opportunity for you to gauge your level of trust in them. Being constantly in the midst of the market, a traditional high street estate agent, and indeed hybrids with local offices, will take a look around the property and draw on their local expertise, considering all factors including the size, position, surroundings and condition of any specific property, along with the sale price of comparable ‘under offer’ properties, and the current state of the local property market including buyer demand and stock levels, and will advise a figure accordingly – the best price they consider achievable in a reasonable timescale.
By Steve Moir, chairman of the Experts in Property