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What is your really property worth?

by Sarah Modlock

Ever wondered about the true value of your property? Ask an estate agent and you could get a whole range of answers according to new research. Estate agents came under some long-awaited scrutiny this month when researchers from consumer watchdog Which? posed as sellers and invited 56 estate agents to value 14 different homes throughout England. What they found was that estate agents' valuations can vary wildly, sometimes by up to £125,000, which amounts to a lottery for property sellers and buyers.

In six cases, the highest valuation was over a quarter higher than the lowest.

Halifax valued one home in Tyne & Wear at £200,000, while Moody and Co suggested £325,000; 63% more. Bradford & Bingley thought a house in Liverpool worth £125,000, while Halifax came in at £180,000; 44% higher. The full list of Which? findings appears below.

But Which? believes that such disparities are not down to chance. 'Touting' for business - deliberately overvaluing - is a common problem according to a property expert questioned by Which? Some agents give high valuations to get a customer's business, then suggest a more realistic price once they've locked sellers into a contract.

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Undervaluing is also a problem. A contributor to Which?'s Move It website recently sold his house in Exmouth and was glad he'd had three valuations, as otherwise he'd have lost £70,000. Two estate agents valued his home at under £250,000, but a third, Bradleys, recommended a price of £325,000. Bradleys eventually sold the home for £320,000.

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Last year, Which? launched its Move It campaign calling for estate agents to be regulated and a proper redress system set up. This latest research is more damning evidence of the way estate agents conduct their business.

'The Ombudsman for Estate Agents (OEA) should be monitoring its members more effectively and punishing those who tout for business or deliberately undervalue,' says Malcolm Coles, Editor of Which?. 'We believe the ombudsman must take a far more robust view of breaches of its code. The current consumer protection system is hopelessly ineffective and allows rogue estate agents to get away with daylight robbery. For two years Which? has been demanding that all estate agents are members of an independent redress scheme. This new government must put legislation in place to protect consumers when making what is often the biggest purchase of their lives,' adds Coles.

However, Bill McClintock, Chairman of the OEA Board believes that Which? is misdirected in their savage attack on the OEA Scheme. He says that Which? may be right to call for tighter regulation of estate agents but that should not be confused with the role of the OEA which was set up so that unresolved disputes can be referred to an independent third party for settlement.

'We support many of the Which? aims, but I believe that they have seriously weakened their case by aiming at the wrong target,' says McClintock. 'I look forward to discussing with them many of the important issues that affect consumers and the residential property industry in a more positive way than their latest approach,' he adds.

If you are using an estate agent to buy or sell property, consider these tips from the Office of Fair Trading:

•  Find an agent which belongs to an Ombudsman's scheme

•  Be aware of the agents' legal obligations

•  Remember the agent is working for the seller not the buyer

•  Complaints about agents should be made to your local authority's trading standards office

•  If the agent cannot sort out a problem and he is signed up to the OEA code of practice, you can take your complaint to the Ombudsman

•  Do not use the same legal adviser as the seller

Range of Valuations found by Which? research

Four estate agents valued each home.
*These properties only had three valuations

Where agents gave a range, Which? used the higher figure. This research was carried out in December 2004.