BAD ESTATE AGENT PRESS - WE'RE CALLING IT OUT
So first it was The Sun late last month, then The Times and over the weekend the Daily Mail got in on the estate agent bashing act. All three publications have run a similar story (we're not sure who's behind it) claiming estate agents are "duping homeowners into paying higher commissions by overvaluing". We think this is nonsense because:
1. Estate agents typically earn a commission on the sale price rather than the asking price or valuation.
2. We accept estate agents do sometimes over-value to win an instruction. But this only leads properties to sit on the market longer than necessary, which actually increases estate agents' costs.
3. The (flawed) logic in these articles seems to be that some agents are having to down-value more than others. Yet most of the agents mentioned e.g. Foxtons, Hamptons are focused on the London market where prices have been falling for seven straight quarters.
4. The asking price is actually set by the homeowner in the majority of cases (it's not necessarily the same as the valuation). So the articles could just have easily have been titled "Foxtons has the most greedy/optimistic clients".
Curiously the articles do mention that some agents earn a fee regardless of whether they sell the property or not, however they all fail to expand on whether the agents mentioned fall into this camp (most certainly do not).