The asking price mis-match simply need not have happened.
The best attitude to borrowing is one that is fiscally conservative, i.e. one that is reactively prudent, in terms of how much you need to borrow; whilst being fully aware of the line of repayment and the level of interest involved in that repayment.
People, advised by agents, are doing themselves irreparable harm by not getting shrewd advice on how much to ask for their properties. Rightmove are correct to highlight this – in the interests of all selling clients.
With the continuing mortgage drought, which by the way is determined by the current wealth of the community, (or rather the lack of it), agents should be properly advising sellers on correct asking prices.
Lets have a valuation hallmark or “Charter mark” for all asking prices. Even rather upmarket estate agents would benefit from being able to show such a ‘Charter mark’ against their prices, certifying them as being carried out to an agreed standard.
It would certainly be a positive point for house adverts, drawing significant extra interest from buyers.
If estate agents were unable to do accurate valuations, companies like Barrett Homes, could not offer a part-exchange service for people buying their new houses.
Since they can do that, this proves that estate agents CAN do accurate house valuations, when entreated to actually do so!
We believe that official government guidelines should be drawn up, for legitimate market appraisals for all estate agents to have to comply with.
We are among those who think this would help, by forcing agents to supply more accurately compiled market appraisals bearing a “Charter mark” which could only be added if the calculation was done in accordance with approved valuation principles.
This way, agents could stimulate the market into reasonable and sustainable activity, so benefiting their clients and the market itself.
If estate agents used this new tool to pitch their asking prices rather closer to the actual price that the market would support, things would instantly improve, the market would cease to be stagnated. To get to do this would require changing the way in which agents do market appraisals.
There should be a “Charter mark” against all properties where the agent thinks they have achieved the approved valuation principles. (No mark against the house price would suggest it has been set entirely, or partly, by the vendor!)
The beauty of the “Charter mark” idea is that the agent gets back into control, by applying the mark if they are happy with the price.
If they are not so happy with the asking price being quoted, and have not given a mark, buyers will know there should be scope to negotiate.
So, with a “Charter mark”, people will know the price should be accurate and without it showing, people will be warned that they should proceed with caution over the price quoted.
Most vendors will therefore want to have the mark displayed against their house and thus will be less likely to interfere with, or try and tweak, the price advised by the agent.
This will help the market, by making the price information thats available, more transparent than it is at present. Right now, bald asking prices give absolutely no clue as to whether they were properly ‘valued’; or not. Such a position is intolerable for buyers and needs urgent government attention.
The ultimate beauty of the “Charter mark” is its versatility. If, for example estate agents, as a group, decided not to take up this versatile tool, to help the house-buying public be better informed about current house prices, other agencies, like those that formerly provided HIPs surveys could.
Definition of the term – Valuation (for residential property):
A calculation, based on recent sales information – and adjusted for material differences between the sold property and the subject property (the house still to be sold) – which deduces the true current market value of the subject property at that particular time by using three or more recently sold comparables, none of which involved an excessive amount of credit finance (over 75% of the price required) to effect the sale.
Another possibility is the RICS could offer this service, so that those agents who trade as Chartered Surveyors could have this option available for their clients and customers.
It seems that the new coalition government may have lost a golden opportunity to provide useful work for those loosing their jobs, as a result of the suspension of mandatory HIPs.
We hope this suggestion gets picked up by the new coalition think tank.
Posted by: Property Match (UK): The modern way to market houses
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