Anything but the truth: get wise to the go-betweens

Overvaluations to win your custom, undervaluations for a quick sale.... Emma Lunn sees how sellers can take the initiative and arrive at the right price for their house

Think of a realistic figure for what your house might be worth, and then add £15,000. The estate agent who markets your home at that price and pulls off the deal is a hero. Deduct £15,000 for the sale instead and your agent is a know-nothing charlatan.

No seller would deny they're after as much money as possible - especially in today's sluggish and uncertain property climate. Yet distorted agency valuations can make it difficult for vendors to know where to start, and can hold up the market.

The practice of touting - deliberately overvaluing your home to win your business - is often the subject of complaints from homeowners. As is undervaluing for a quick sale.

The lottery that home valuations have become was revealed in a recent report from the consumer group Which?. Posing as sellers, researchers invited agents to 14 homes across England: in six cases, the top valuation was 25 per cent or more above the lowest estimate. One house in Tyne & Wear was valued at £200,000 by Halifax estate agents and £325,000 by rivals Moody & Co.

Meanwhile, at the rapid-sale end of the range, one seller interviewed by Which? reported that he had received two valuations under £250,000; he eventually sold for £320,000.

That's not all. Which? found that some agents wouldn't pass on all offers received on a property, concentrating instead on those buyers prepared to use their firm's financial services to earn more commission.

Sorting out such problems is difficult as estate agents are unregulated and anyone, regardless of lack of qualifications or experience, can set up shop. The National Association of Estate Agents (NAEA) and Which? are trying to change this.

"It's a crazy situation," says the NAEA's chief executive, Peter Bolton King. "In other countries you need a degree or a certain amount of experience to practise as an agent, but not here. The industry should be regulated."

Estate agents - who are estimated by Which? to earn £4bn a year in fees - can be members of the NAEA and should comply with its rules and code of conduct. Similarly, agents who are members of the separate Ombudsman for Estate Agents must meet criteria laid down by the OEA. Both bodies can fine errant members but only the OEA will award compensation to consumers in cases of serious breaches of its code.

Only around one-third of agents are members of either the NAEA or OEA. Despite calls for regulation from these two industry bodies, the Government has so far been reluctant to act, preferring to rely on a mix of industry competition and consumer awareness.

If you're thinking of selling, there are steps you can take to protect yourself. Tina Jesson, founder of Homestagers, which advises people on getting their property ready for sale, says you should start with three different valuations - and ask each agent how they got there. "They [must] be able to prove they have sold a similar house recently at that kind of price, and not just have one on the market at that price."

Go with the middle valuation - not the highest - and never tell one agent what you have been told by another, she adds.

Alternatively, go for an "asking price spread" in the estate agent's window - where you advertise the property within a certain price range, says Melanie Bien of mortgage broker Savills Private Finance. "This gives the impression that the highest price is what the vendor really wants, when actually it's the lower one - so anything less than the top figure, the buyer is happy with."

Estate agents are supposed to know your local area and what prices are appropriate, but you can do your own homework.

Type your postcode or street name into nethouseprices.com and see the prices of any home sold in that area since April 2000. The website is free.

Once you have decided on the price at which you want to sell your property, negotiate a good contract with the agent (see the box above).

Some people, though, prefer to bypass estate agents and sell their house themselves. The internet has made this easier to do than in the past. Sites such as propertybroker.co.uk and www.thelittlehousecompany.co.uk let you advertise online.

Propertybroker charges a flat rate of £137 and takes digital photographs of your home. Littlehousecompany offers a basic service for £89. These sites save sellers from having to pay estate agent commission, typically 1.5 per cent, or £2,400 on a house sold for £160,000.

Sell your house this way and you must take charge: draw up the description, show prospective buyers round, deal with offers and arrange the hand-over of keys on completion.

The vagaries of valuation meant Hazel and Tony Satloka missed out on their dream home.

When they first discussed the idea of moving six weeks ago, they got two estimates for their four-bed detached house in Bradford. "The Halifax valued it at £200,000 but local estate agent Bennett Kaye put it at £210,000," says Hazel.

Unsure of what to do, the couple then saw a property they really wanted. To get a clearer idea of what they could afford, they decided to arrange further valuations of their own home before putting it on the market.

However, delayed visits from two other local estate agents slowed them down - and their target property was snapped up by others.

SET IN STONE: WHAT SORT OF CONTRACT SHOULD YOU SIGN?

Insist on a short tie-in period of eight to 10 weeks - or none at all - in case the agent markets your house poorly or fails to attract potential buyers.

"Sole agency" is the most common contract and, as its name implies, engages you to a single firm. If the agent sells your house, you pay commission of 1 or 2 per cent of the price, but try to negotiate as some agents will agree to a lower fee. Agree the commission in writing before you instruct the firm to market your home.

Avoid "sole selling rights". Here, the agent is entitled to a fee if the home is sold within the contract period. So find a buyer yourself - a friend or chance househunter - and you'll still have to pay commission.

Under a "multi-agency" contract, while you have several different firms trying to sell your house, you pay only the one that actually sells it. However, because the competition means each agency has less chance of securing a sale, the commission is higher at 3.5 per cent.

There shouldn't be a fee when you instruct an agent, and contracts that include a clause saying the fee is payable on exchange should be avoided.

Sign a contract only where the fee is agreed in advance and payable on completion, as this is when you will have the money from the buyer.