10 signs your house is overvalued

If you wish to sell your property, it is crucial that the property is at market price from the outset. This is in fact the most common reason why a house does not sell!

Overestimating a house can have negative effects on the sales process: an initial valuation that is too high will ultimately cause you to sell at a lower price than with an adequate assessment.

It is important to identify quickly whether a mistake was made during the valuation of your property so that it can be corrected as soon as possible.

How then do you know if your house is not at market price? In reality, there are signs to look out for to ensure that your asking price is in line with market expectations.

Your house is on the market at a price considerably higher than your neighbours’

Generally speaking, prices tend to be fairly close within the same neighbourhood. If your house is put on the market for a price much higher than all the properties in the area, it is important to question the valuation.

While it is not impossible for a house to be worth up to £85,000 more than the neighbour’s house, this remains rare in practice. This is in fact one of the methods used by estate agents to carry out a valuation. The comparative market study involves a detailed analysis of houses sold in the previous six months in a given neighbourhood.

It is therefore important to ensure that your estate agent has carried out such a study to value your property as accurately as possible.

You have had no or few viewings

All sellers have experienced the initial weeks of excitement following the putting up of their property for sale, generally with considerable impatience once the photographs are published on the internet. But weeks pass and few viewings are arranged, if not worse, no visitors.

Excitement is quickly followed by frustration and worry. If this sounds familiar, it is highly likely that your property is not at the right price – it is crucial to adjust the asking price to generate interest and new viewings.

You have not received an offer

When the property market is active, a seller should receive at least a first offer within the first two months of putting their property on the market. If several months have passed and you have still received nothing, this is generally a sign that the price should be reviewed downwards.

It is of course important to take into account the local market (is it a buyer’s market?) but also the type of property. A luxury villa or a very atypical property may take longer to sell than a house in a town centre.

You have chosen the estate agent who gave the highest valuation

On any property market, you will find hundreds of estate agents. Before choosing the one or ones to whom you will give a selling mandate, you need to know the right questions to ask.

The most important element to discuss is the asking price; it is essential to understand how the agent valued your property. If you obtain several valuations and one proposes a price £25,000 higher than the others, you need to understand how and why that figure was proposed.

Many estate agents will want to “secure a mandate” by holding out the prospect of a potentially higher selling price than their competitors. This is a common mistake and can not only delay the sale but will not subsequently prevent a significant price reduction.

Houses in the neighbourhood are selling… but not yours

It is essential to keep an eye on the neighbourhood when your house is on the market, as you are certainly not the only one in the street. If surrounding houses are sold, it is important to find out about the conditions of their sale (time on the market, price, etc.) to check that it is not your house that is overvalued.

It is common to hear owners think that if the neighbours’ house was sold for £170,000, then it is not normal that their considerably nicer house has not sold.

In fact, one must not overlook the fact that many elements influence the sale of a house, so it is fundamental to ask the right questions:

• Is your neighbours’ house different from yours? Townhouse or architect-designed house, etc.
• Is your neighbours’ house larger?
• Does your neighbours’ house require less work than yours?
• Does the sold house have more land or a better location than yours?

The group viewing or open day yielded nothing

In some major cities, estate agents sometimes organise group viewings or open days. While there are pros and cons to this kind of viewing, some buyers may prefer this method as they feel less under pressure from an estate agent.

If this is not a recommended method in all cases, in the Paris market it can help to “take the temperature”. If no one attends a viewing day when the market is dense and active, there is no longer any doubt about your property’s price.

Few clicks on your adverts

The property market is now primarily played out on the internet, where the majority of buyers begin their searches. If you have little traffic on your advert posted online it is time to sound the alarm – either regarding the advert posted (lack of photographs, poorly written advert) or the asking price. Any reputable estate agent should be able to provide you with statistics for your advert.

Knowing how to listen to feedback from people viewing your property

A good estate agent should be able to provide you with the comments – positive or negative – from people who have viewed your property. You must know how to listen to them, as this is the best way to understand what is holding up the sale of your property and thus make some improvements where possible.

If several people complain about the too-vivid colours in your living room, perhaps it is time to think about giving it a coat of white paint. Similarly, if several people find the price too high, perhaps it is necessary to adjust it.

You receive offers that are far too low

When a property is overvalued, it will generally not receive any offers, or perhaps one or two, much lower than the asking price. It should be understood that receiving a much lower offer is already a chance because a price that is too high will already put people off at the viewing stage.

Without having to accept a far too low offer, it is a sign that a price reduction should be considered.

The property has not sold and the sales mandate has expired

If months pass without anything happening, you may reach the validity date of the sales mandate you gave to your estate agent. It is easy to think that this is because the market is not favourable to you, that there are not enough buyers in the area. This is sometimes the case but it is often not the main reason why the property has not sold.

Every house can potentially sell but at market price and not above, taking into account the market dynamics at the time of putting it on the market. It is essential to do some serious soul-searching at this stage and accept a price reduction to relaunch the sales process.

The importance of valuation

The number 1 reason for selling a house is the right price. This is the most crucial element of putting a property on the market and is what characterises most sales that happen quickly.

By setting the price too high at the outset, you risk seeing your property stagnate on the market without viewings. Once potential buyers have spotted a house for sale for months, they then know that should the price be reduced later, time has worked against the sellers and that negotiation will be possible.