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Estate agency - how it really works

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Estate agency - how it really works

Post by JR8 » Sun, 10 Nov 2013 9:12 pm

This from an acquaintance of mine. Maybe some 'no bull' points worth considering for when you go through your next property transaction ...

'Dirty tricks of the estate agent'
Always remember who is paying the estate agent.

Even more importantly, always remember that the prime focus of everything the estate agent does and says is their own pocket. This applies also to letting agents and most other intermediaries I've encountered.

Buyers count for little and vendors for even less. A vendor rarely moans about an agent through whom a sale was agreed and, in any case, is often moving out of area so their goodwill counts for little - even those staying local aren't likely to be back on the market any time soon. A buyer is slightly more important as, if the time ever comes to move on, they are likely to come back to the same agent - even those who hated the agent when a buyer seem to want that same treatment meted out to others when they are selling (they make the mistake of thinking the agent acts symmetrically and that what's bad for a buyer must be balanced by being good for a vendor). However, even upsetting a prospective purchaser doesn't do any great harm if the property concerned is the one they really want to buy as they won't walk away just 'cos of the agent.

Even upsetting a vendor isn't too big a deal. An aggrieved vendor will take their property elsewhere (after the fixed term of agency plus due notice) but at least the property has been introduced to a good number of people (evidenced by the monthly 'marketing report') so if any of them ends up buying it then the agent still claims a fee.

Converting the agreed fee percentage to cash in pocket is the goal. They don't want stock on the shelves - they want 'Sold' signs (i.e. adverts) on properties. Any offer is attractive to the agent who will, one way or another, pressure the vendor to accept whatever the agent thinks they can get away with. Each 10k less than the original asking price only means the agent losing the cost of a meal out but may make the difference between locking-in that marginally lower fee and having the place stuck on the shelf. They will try to get a higher price if they reckon they can play the punter that way (that's the fun of the game) but will also be prepared to recommend to a vendor whatever offer they can get.

Once an offer is on the table then it's in the agent's personal interest to move things along as swiftly as possible with frequent (but often trivial or irrelevant) update of 'progress' so parties don't have time for a loss of heart or change of mind. It's true that a lack of progress can cause a cooling-off and increases the 'time risk' (especially with a chain) but things are said to buyers that don't originate with the vendors such as a ludicrously short target exchange date or purported interest from 3rd parties or whatever they want to hear about completion date. This sense of urgency and of everything being 'just about to happen' is mostly about securing the fee and then banking it asap as well as keeping everyone tied-in to the deal.

Hang around an EA's open office for a little while. Overhear an agent telling a disappointed vendor that, despite the media reports, things actually remain sticky 'on the ground' locally and the offer they've worked so hard to generate is as good as can be expected and better than most other properties are achieving in that it's only X% below asking whereas any places managing to find buyers are only doing so with much greater reductions (what do they think this says about their initial 'marketing plan'?). The next call may well involve telling a house-owner that the local market is becoming much busier than it has been for years with new records being set and that now is exactly the right time to put their property on the market ("spring will be too late as everyone realises this and floods the market"). The next call may well involve talking to a prospective purchaser - and you'll doubt that the content would ever be put in writing by the agent. Some calls will be to/from other agents as they all push each other to ensure that exchange is reached while chains still remain connected and some calls intended to be for the same purpose will just be counter-productively wasting the time of conveyancing solicitors.

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