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Ea View Of Rics Report

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Maybe it is now that the estate agents will realise the banks won't overlend on overpirced property any more, so the only way they can hope to do business is to talk sellers into bringing down their asking prices to a sensible level.

Interesting reply here, which suggests that some EAs feel powerless to reduce prices for fear of losing clients:

...If all agents were able to reduce their stock prices down hugely it would regenerate sales market volumes, be fairer to the next generation, create a higher office turnover and become, frankly, very lucrative. So far, so good.

One problem.

Try telling 75% of sellers that their home is losing/has lost value. They simply refuse to accept it. This applies especially when you initially value them. Madness! I had one guy completely refusing to accept that prices have fallen since 2007. He won't be using us in a hurry. Or selling, for that matter! Recently some rag ran an article about price growth and a client called in to up his price accordingly. Strangely, he'd never read any articles in 2008/9 when he couldn't sell. We wouldn't do it & he went elsewhere.

Houses are many peoples 'Get out of jail free' cards in life. Their Joker. There to bail them out of life's little problems. Or so they think. The minute you start to introduce reality into their lives is the minute they go to another, less capable agent.

It's right to encourage price reductions. Realistic too. In my experience though, sellers only accept the market has collapsed when they offer on a purchase elsewhere.

Wow. An EA with brains.

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Had a long conversation today with an agent requesting feedback on some houses we'd seen at the weekend.

On one of the properties I'd said it was overvalued by about £50K.

She replied that she was fed up with vendors who were convinced that their properties were worth far more than the current market price. They would wine to her that they had no one viewing but were unreceptive to suggestion that they should drop the price.She said that the only houses shifting were the ones were the vendor was being realistic in their pricing.

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Exactly. Estate Agency is volume driven - I don't understand why they don't refuse to take properties on. Maybe they do?

Round here a lot of the EAs charge you an 'admin' fee if you want to take it off the market. Yes, they have overheads for a non-sale but printing a few brochures and some phone calls isn't a lot. Mostly computer based nowadays.

So, they'll agree to market your house for a daft amount to watch the particulars fade in the window of the EA. If you don't want to drop the price or you want to use another agent, "that will cost you £200 + VAT sir."

I reckon it's the reason why you see houses for sale for 2 years or more with the same agent. Some are just stubborn, but some sellers are so brassic they can't afford to take it off the market. I think many EAs would rather you use their lettings service for constant income if you can't sell it so they subtley mention this when you "can't find a buyer." :angry:

With rising stocks though, I expect agents to start dropping vendors for free.

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Basically there's not much incentive for EAs to drop houses.

They'll obviously focus marketing budgets on stuff that's going to sell.

Even when houses are no longer listed with an agent, they're not above ringing the seller if a potential client comes along. I had this once where I did a viewing on what was supposedly a new house. Turned up and found it full of chavs who'd wrecked the appliances and filled the garden with 2nd hand motors!

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Why is it not in his best interests to admit it? Lower prices = more sales = more monies in his pocket.

That's always been the case historically... I was very interested by the empirical evidence in the original 'freakonomics' that showed agents taking significantly more time, and achieving significantly higher prices, when they sold their own pwoperdee as opposed to that of clients, proving that agents cared more about achieving a good turnover of houses than achieving the best possible price.

And I think it, more or less, still holds.

But the one slight caveat I would apply is anecdotally that British estate agents filled their boots with 'investment property' on an astonishing scale in the early part of the 21st century... it just might be the case these days that some of them are more worried abuot hurting their 'portfolio' than earning commission...

I like reading this bloke's stuff but I find it bizarre frankly that someone seemingly so literate is working as an EA. It almost makes me doubt the integrity of the blog. I guess maybe he was a reasonably intelligent arts graduate back in the day who also happened to be good at selling & who decided there was more money in the latter...

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Yes, several of the firms in Swansea charge what they call a 'marketing fee' - I have heard figures of £300 plus VAT to stick the ad in the paper and online. Then, of course, they want their 1.5% to 2% commission from any sale.... so maybe that partially explains why some EA are, IMPO, hugely over-valuing properties.

I did a trawl of Swansea EAs yesterday - a couple of the more realistic EAs were in hysterics when I mentioned the ones who are considered price rampers... although they said it makes it difficult for them when they put in realistic values against the ludicrous ones of their competitors.... but they said they could not afford to keep houses on their books for months that stood no chance of selling... so I do wonder how certain EAs are managing to survive with few sales... assume it is the 'marketing fee' that is keeping them going... perhaps the odd ludicrously priced sales' commission also is enough.

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But the one slight caveat I would apply is anecdotally that British estate agents filled their boots with 'investment property' on an astonishing scale in the early part of the 21st century... it just might be the case these days that some of them are more worried abuot hurting their 'portfolio' than earning commission...

I have heard that this is the case with a few of the EAs in my part of the World.

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At last a motivated seller.


13 August 2010

* Price changed: from '£289,000' to '£259,950'

20 July 2009

* Initial entry found. [Found by n/a]

I still think, IMPO, that it is 50K over-valued in asking price. Odd, I personally rarely see price drops from this EA.

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