Selling Your property? Watch Out For These Estate Agents' Tricks

Selling Your Home?

It is the first of three posts warning home sellers and buyers concerning the tricks estate agents utilize to get your hard earned money and to help you avoid being fleeced by your estate agent.

1. The sucker sign-up

The foundation for just about any estate agency's success is clearly to encourage the utmost number of sellers to sign with that service rather than with their adversaries that are many usually lookalike. Research has repeatedly demonstrated that many folks believe our houses to be worth more than they actually are. Because we've lived in them and decorated them in a way that suits us, we are often emotionally attached to them. We likely believe our bold colour scheme, modern open-plan living space, 'first feature' fireplace 'designer' lavatory will be the height of practicality and good taste and would entrance any potential purchaser. But on viewing our beloved houses, many buyers' first idea may be they could gut the place and replace our decorations that are execrable with something better suited to their preferences and lifestyle.

This may pose a problem for estate agents. When they are brutally honest with us about our home's (frequently lack of) attractiveness and give us a realistic selling price, then we're prone to get rather grumpy and grant our company to another broker who is more complimentary about our tastes and more confident about how much we can sell for. So, when pitching for our company as sellers, most brokers will flatter us by praising our house, try and sound out us we believe our property may be worth and then assert they can easily meet or exceed our price expectations. This often results in them overvaluing our houses.

Along with the overvalue, another common approach agents utilize to get us to hire them is the buyer that is phantom. They will likely tell us that they have recently been contacted by one or several buyers who are looking to get a property simply like ours, as we are showing our house rounds. The agent may telephone his office in our presence, allegedly to check that these buyers continue to be in the market, to demand ours even more. Invariably his office will confirm there are bus-loads of eager buyers pantingly eager to find our property. The agent's message is going to be clear - then we'll miss the opportunity of a sale that is fast at a good cost if we do not sign up with them immediately.

2. The cost-slash

It's not fairly unlikely that your agent will have overvalued your property to be able to get one to sign with them. So, unless the market is unusually buoyant or unless they're fortunate enough to find a buyer with more money than sense, as soon as they start actively marketing your property, they will most likely have to soften you up to the prospect of accepting a lower cost than they had originally suggested.

Many sellers suppose that it is in the estate agents in Brookmans Park broker's interest to get the best price possible. But this simply isn't the case. Let us we assume you have a Sole Agency agreement using a selling fee of 1.5%. If you are looking for say GBP285,000, the estate service will get GBP4,275 and the individual agent maybe - GBP427. The bureau will pocket GBP3,975 and the representative GBP397 in the event the broker manages to convince one to accept an offer of GBP265,000. So while you drop GBP20,000, the agency only loses GBP300 and the broker GBP30.

Getting you to drop your cost is generally relatively easy. They tell you they have had several buyers see the property and not all the feedback continues to be as positive as they had expected even though the broker could have initially been highly complimentary about your home. The broker may even tell you that after you had signed up, they unexpectedly got several other similar properties on the agency's novels and that they all sold amazingly quickly as they were more 'competitively priced'. Or the agent might claim that there have been a few offers for the house which were considerably lower than your asking price. But whatever tactics are employed, most sellers can quickly be persuaded to drop their price right down to the amount the broker had always known they would get.

The ideal situation for the broker is when a customer signs a Sole Agency agreement giving exclusive rights to that agent to sell the property for an agreed interval. This puts the agent under less pressure to offer the property because, as long as it is shifted by them during the contract period, they will get their commission. Less beneficial for the agent is a Multiple Agency agreement where the seller places their property with several agents. This sets up a race between agencies as to who gets the commission along with the sale, meaning several services may do quite a great deal of work but miss out on earning any cash - not something likely to be appreciated by the service supervisor. With a Multiple Bureau situation, there are two common scenarios which can develop. You might find that each broker will do less work as the know it's likely another agent will get the commission and the sale, to sell your home. They thus concentrate their efforts on properties where they attempt to push buyers and have Sole Service. Or else there could possibly be a frenetic race as each broker attempts to get one to take any offers they receive. In this instance, they may feel an even greater demand to convince you to accept a cost-slash and you will get bombarded with broker calls all telling you what amazing buyers they have prepared to take your property if just you will reveal some flexibility on cost. It is only afterwards, as soon as you have accepted an offer and withdrawn your property from other agents, which you learn the buyer was not quite as solid as was proposed - they might be in a chain selling their property, or might not possess the finance totally organised or might be unable to complete as rapidly as you'd considered. But by then it's usually too late to improve your mind and go back to other agents.

3. The slash-and-grab

The most fiscally damaging situation for a seller is when an agent decides they can earn lots of cash for themselves by inducing you to sell your property at an attractively low price to a person who is actually among the agent's company contacts, friends or family. This slashing your cost and grabbing your home may be quite clear-cut as when the agent manages to convince you to accept a low offer from one of their associates and they subsequently resell your property for a healthy gain netting the agent perhaps GBP10,000 to GBP20,000 or more for just a few hours work.

A more sophisticated version of the scam is when you have a house that may be split up into flats or house which needs to be modernised or a flat. Here the broker may possess a connection with a programmer. The bargain will usually be that the broker alerts the developer to the chance, motivates the programmer's offer to be accepted by you (while maintaining your home is going into a private buyer) and then gets a bung in the programmer. This bung is known in the trade as a 'drink' and will generally range from GBP5,000 to GBP10,000 per bargain according to the gain made by the developer. In order to encourage one to sell at below market value, the broker may withhold offers from buyers that are genuine or get friends to put in low offers to drive you towards a cost-slash.

The net has made the slashandgrab similar properties that were somewhat harder by providing sellers with easy access to information about the prices have attained. However, the slash-and-grab works an absolute treat with older, possibly more vulnerable sellers who may be downsizing- selling off a larger family house and moving to some bungalow or level after their children left home and have grown up. These sellers make easy targets because, when they have lived in a house for quite some time, they could have bought it to get a five-figure amount - GBP50,000 or maybe GBP40,000. So when the seller are given a six-figure offer they'll believe they're making a gain that is substantial and may feel uneasy about pushing for more. Moreover, often such sellers will usually not have thought concerning the worthiness of these properties if converted into flats and so could be duped by the agent into just comparing the price offered to that paid for other similar family homes, that will generally be considerably less compared to the worth when converted into flats. However, it happens on my street - to average folks all the time a retired couple sold their 3-floor end-of-terrace house for around GBP385,000.

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