OMBUDSMAN
Great expectations Suggesting a value to put on a property can be minefield, says Chris Hamer, The Property Ombudsmsan.
W
hat should you do if a seller insists their property is worth more than you think stands any chance of
success, or who needs to sell quickly but is reluctant to adjust their price expectations? A frequent source of complaint is the
suggested asking price given in a market appraisal, usually by sellers disappointed with the price they ultimately achieve. They complain of over-valuation at the point of instruction, or of selling below market value. Sometimes both, which may seem a contradiction in terms to an agent trying to answer their complaint.
THE PALATABLE PRICE
An unusual valuation complaint, however, was recently made to my office. A would- be seller complained that the estate agent had so undervalued her property that she was prevented from instructing them. Closer consideration revealed that the
complainant had been trying to sell her property for three years, using a number of local estate agents, but had attracted no interest at all at the asking price she had set for her property. The estate agent about whom she
complained had put forward a well- reasoned explanation as to why they felt the property was worth 20 per cent less than she was seeking, and supported their advice with prices achieved locally for comparable properties. In particular they had taken into account that, since she bought the property, lenders had tightened their lending criteria such that the property had become unmortgageable. She needed to attract a cash buyer. Though their advice was not what she wanted to hear, it was demonstrably frank and fair, and I commended the agents for declining to market the property at a price they felt stood no realistic chance of success. The irony of the complaint, which was
30 MARCH 2012 PROPERTYdrum
by no means lost on the complainant, was that she had bought the property years earlier through the same estate agent, and had paid more than they were subsequently recommending as an asking price. I understood why she felt she had overpaid, but made the point that when she bought, the estate agents in question were working for the seller and had no duty to her as a buyer to advise on what she ought to pay. It seems that the complainant found
another agent who was willing to market the property at a price which was more palatable to her. I have not yet learned whether she has finally managed to sell the property, and if so, at what price. It is a commercial decision for any
estate agent as to whether they are prepared to market a property at a price on which their seller client insists but which they consider unachievable. However there is a significant risk of later complaint in such situations, either because the seller blames the agent because they have not sold or because they are disappointed with the offers received. It then becomes essential that the agent can demonstrate to me that they advised the seller client frankly and realistically, both as to a suitable asking price and likely selling price, and that in doing so, they acted in accordance with Paragraphs 2a and 2b of the TPO Code of Practice. Fundamentally, Paragraphs 2a and 2b of the Code of Practice expect estate agents to
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