Better sales contracts might stop overvaluing and silly asking prices

Friday, February 18, 2011 by Ed Mead

We’ve got as many buyers registering as we’ve had since the credit crunch (remember that, seems like so long ago now) but there are distinctly Egyptian rumblings amongst many buyers that wild asking prices are getting out of hand. The problem stems in London from the fact that just because one or two properties sell for relatively high prices everyone with anything even vaguely similar immediately thinks theirs is worth the same. Their over confidence is bolstered by [desperate] agents trying to keep their registers more than one page long. As an agent it’s equally tempting to talk about silly fees and in 30 years of agency I’ve never known fees so low. If you combine that with catastrophic volumes you have a recipe for commercial disaster.

This issue is compounding an already thin market as buyers are stalling when faced with patently silly asking prices. I’ve lost several potential sellers recently as they’ve had their heads turned by very attractive asking prices, and given that I take such losses hard I keep closely in touch with them to see how things go. I have been suggesting that if they want to go with a much higher price they do not sign silly 12 week contracts [no one ever should in my opinion] and at the first hint of the agent realising they’ve ballsed up and trying a price reduction the contract should state they should be able to get out and instruct another agent.

This week I’m feeling better as many of those instructions I lost within the last month have started coming back at the right price and at a fee that will ensure survival and success for both seller and agent