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Estate Agent Advise From Housing Expert, Henry Pryor

16 January 2012

 

Ask your agent to make you an offer you can’t refuse.

by Henry Pryor. The BBC's personal property expert.



There are roughly half the number of homes for sale than there were four years ago when prices peaked in January 2008. Although there is still no official register of estate agents there were thought to be about 14,000 firms. Since then many have diversified into lettings but there hasn’t been the body count that some predicted and most High Streets still have an alarming number of agency offices.

40% of all the homes currently for sale have had their original guide price reduced. Some will have been genuine mistakes – agents mis-read the market, greedy sellers who wouldn’t listen to advice or the odd vendor who is genuinely only interested in selling if they can get their price. Many simply fell for the sales patter and the flattering idea that they had a home that the agent liked too!

Estate agents only earn a fee when they sell (or let) a property. As a consequence they must have instructions to stand a chance of earning a fee and some will go to extraordinary lengths to get them. As I learned as a very ‘green’ negotiator when I started out there were no prizes and certainly no fees for being right. Giving professional advice was all very well but the potential client wants to know just two things when he invites an estate agent into his house. “How much and how little”?

How much does the agent think he can get for the house and how little will he charge to do the job? Despite being one of the last truly open and transparent markets with some agents happy to compete for work by charging next to nothing the fee is just as important as how much the agent thinks he can sell the property for. Some agents will ‘value for instruction’ and give an optimistic price that understandably the seller or landlord really wants to believe. Having secured the instruction the agent then has a period of time to appologise for getting it wrong but make up for it by getting a half decent offer that almost certainly mirrors the advice given by another (unrewarded) agent who was more objective at the outset.

By and large agents are spivs. Some are better spivs than others but at the end of the day they want your business and many will do whatever they can to get the business. One question you could ask them is to make you an offer for your house. Respecting that they will have costs, that they are brokers and not re-sellers ask them what they would pay for your house? Don’t be surprised if some still try it on but you may well find that one will actually be able to explain why they have come up with the figure they have by producing some comparable evidence perhaps?

It’s unlikely that you will find that the buyer for your home is an estate agent but its worth remembering that when it comes to giving marketing advice (it’s no longer called a ‘valuation’) it costs them very little to over-club the price and it’s you who suffers if you are foolish enough to accept it.

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