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Delusional Estate Agents

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I spoke to a friend back home in West Sussex today (I'm in USA). She has had her flat on the market for 7 months and only attracted 4 viewings. The estate agent has advised her NOT to reduce the price yet. It seems very odd behaviour to me, especially after I looked on Wrongmove.co.uk. There are hundreds of nice looking unsold flats on the market. I would have reduced the price after the first 3 months or taken the place off the market.

My friend's flat is ground floor, 2 bedroom place. There is nothing obviously wrong with it. This type of property would have been sold in 6 weeks a few years back.

This reminds me of the early 90s. You couldn't give flats away. I know someone that held a party in the office when he sold his Hove flat, with negative equity, for 50K. That was how desperate things got. My, how people forget.

I think history is trying to tell us something. :huh:

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I wouldn't worry he'll be out of business soon. He'll never sell anything if he can't adjust to changing Market conditions. And the new agent who takes over the properties will most likely price more realistically.

As agents go bust and the available stock is spread among fewer agents they will less incentive to price high to obtain listings and will be able to price to sell.

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I don't understand, on what grounds did he recommend NOT dropping the price? Did he think he could get more in the spring or something?

Whatever you do or don't believe on HPC, the notion that estate agents don't make any commission on something they don't sell, is a pretty believable one.

I'd of thought the agent would have been rather grateful they'd drop the price and he'd make a sale. We keep hearing stories about estate agents saying 'don't drop the price', are we sure it's not vendors who only hear the part they want to?

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The CountofNowhere posted these two yesterday, sale fell through, so they've upped their price. Madness.

http://www.rightmove.co.uk/property-for-sale/property-31199447.html

17 December 2010

* Price changed: from '£309,950' to '£314,950'

* Status changed: from 'Under offer' to 'Available'

22 October 2010

* Status changed: from 'Available' to 'Under offer' [Found by n/a]

http://www.rightmove.co.uk/property-for-sale/property-31272605.html

16 December 2010

* Price changed: from 'Guide Price £250,000' to 'Guide Price £275,000' [Found by n/a]

* Status changed: from 'Sold STC' to 'Available' [Found by n/a]

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This reminds me of the early 90s. You couldn't give flats away. I know someone that held a party in the office when he sold his Hove flat, with negative equity, for 50K. That was how desperate things got. My, how people forget.

I think history is trying to tell us something. :huh:

Yes I remember the early 90s in Sussex! I lived in Hove! :huh:

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Does anyone know why EA's (well the ones I have spoke to) get so offended when you put an offer in at 10-20% below asking?

I follow this up with the fact I am chain free, FTB, and suggest that previous recent sales have been in the same region and why is said property at peak 2007 prices? I know they work for the vendor and at the same time as talking up the market to me, they would talk the market down to the vendor.

They usually stutter in their answer, but I get a sense that they are offended? Is it due to the fact they have spent so much time invented this arbitrary asking price and a realistic offer makes them look stupid ? (sorry confirms they are stupid :)) IMO they promise the vendor we can get you £X to secure business, but surely dropping the asking price 6 months later would be a good idea... or perhaps they are scared of sentiment change in the local market?

Ultimately what does the actual EA himself (the EA's from high street chains) get % wise? when securing a sale? In my example I put an offer in for a house that was set at 370k and the last place sold for 295k in 2010 and in 2007 was around £315. Property was for sale for 6 months and needed work. Put offer in for £315k, they almost put the phone down! I thought what a pretentious prat as he had the cheek to say, I am going to change your buyer inquiry range now down by 60k!

Said property is now with another agent and is STCC, what has that agent missed out on bonus wise? I would figure it’s now in EA's interest to get volume through, as a few 50k here or there on a 300k house would be very small in terms of their personal bonus?

Maybe they get emotionally involved and are so egotistical that dropping the price is out of the question and forget the bottom line.. sales!

Edited by Daz

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I spoke to a friend back home in West Sussex today (I'm in USA). She has had her flat on the market for 7 months and only attracted 4 viewings. The estate agent has advised her NOT to reduce the price yet. It seems very odd behaviour to me, especially after I looked on Wrongmove.co.uk. There are hundreds of nice looking unsold flats on the market. I would have reduced the price after the first 3 months or taken the place off the market.

My friend's flat is ground floor, 2 bedroom place. There is nothing obviously wrong with it. This type of property would have been sold in 6 weeks a few years back.

This reminds me of the early 90s. You couldn't give flats away. I know someone that held a party in the office when he sold his Hove flat, with negative equity, for 50K. That was how desperate things got. My, how people forget.

I think history is trying to tell us something. :huh:

( I live in West Sussex. )

Could it be possible that in small towns, with very few estate agents, they try to "co-ordinate" the market, to avoid falling prices?

I agree that on an individual basis, the interest of an estate agent is to sell, and get a commission, even if it is 10% lower. But when prices are going down in general, then buyers will wait, and stop buying, possibly for a long period even. That possibility may scare the agents, as they may not have the funds to survive the draught?

But wouldn't this "co-ordination" be akin to a cartel, and hence illegal?

Perhaps not technically, since they don't own the properties?

? ?

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( I live in West Sussex. )

Could it be possible that in small towns, with very few estate agents, they try to "co-ordinate" the market, to avoid falling prices?

I agree that on an individual basis, the interest of an estate agent is to sell, and get a commission, even if it is 10% lower. But when prices are going down in general, then buyers will wait, and stop buying, possibly for a long period even. That possibility may scare the agents, as they may not have the funds to survive the draught?

But wouldn't this "co-ordination" be akin to a cartel, and hence illegal?

Perhaps not technically, since they don't own the properties?

? ?

Price fixing you mean? Like the private schools got done for recently?

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Price fixing you mean? Like the private schools got done for recently?

Yes

I don't think that would be possible in a large city such as London. And even in small towns, I don't think it would be possible to hold it for the long term. But these people may not know that (they are not that "macro-economically" informed... :rolleyes: ), and could be trying it.

I don't know. But if not this, why else??

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I think the fact that the EA are paid by the seller, not the buyer, is part of the problem we have with the house prices in the UK. I can give you an example of Germany, where I have been trying for the last year to sell a 2.5 bedroom house.

Over there, the EA is paid by the buyer so the buyers have a very different attitude. In my experience they deduct the EA fee from what they can/want to pay so that the seller ends up indirectly paying for the EA anyway. But the EA doesn't work in the way of talking prices up in favour of the seller.

Now, why has my house been on the market for so long? Because of the high price? The asking price is 79K Euros, about 67K GBP and still potential buyers want to pay less. The house is in a rural small town, lots of amenities around, detached, with a large garden and needs some renovating - and unfortunately has tenants living there which by law can't be evicted because of a house sale. So this makes it harder to sell a place and reduces its worth further, as also the buyer won't be able to get the tenants out immediately, they usually have to wait at least a year until they can give the tenants notice. In the current situation, I will have to take still less, something like 65K Euros, if I want to sell. Now I wonder what I could get for 55K GBP over here?

It's very frustrating to witness this crass contrast between the two countries. Why are people over here so happy to pay houndreds of thousands of pounds for sometimes really substandard houses? Why are EA continuing to talk prices up? Why does the media never report in the interest of FTBs? It's a miracle and not like this in other countries. Like so many others here, I can't wait for house prices to come down. And I hope that people will start to get some sense and realise how much money it is they pay for a house.

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I think the fact that the EA are paid by the seller, not the buyer, is part of the problem we have with the house prices in the UK. I can give you an example of Germany, where I have been trying for the last year to sell a 2.5 bedroom house.

Over there, the EA is paid by the buyer so the buyers have a very different attitude. In my experience they deduct the EA fee from what they can/want to pay so that the seller ends up indirectly paying for the EA anyway. But the EA doesn't work in the way of talking prices up in favour of the seller.

Now, why has my house been on the market for so long? Because of the high price? The asking price is 79K Euros, about 67K GBP and still potential buyers want to pay less. The house is in a rural small town, lots of amenities around, detached, with a large garden and needs some renovating - and unfortunately has tenants living there which by law can't be evicted because of a house sale. So this makes it harder to sell a place and reduces its worth further, as also the buyer won't be able to get the tenants out immediately, they usually have to wait at least a year until they can give the tenants notice. In the current situation, I will have to take still less, something like 65K Euros, if I want to sell. Now I wonder what I could get for 55K GBP over here?

It's very frustrating to witness this crass contrast between the two countries. Why are people over here so happy to pay houndreds of thousands of pounds for sometimes really substandard houses? Why are EA continuing to talk prices up? Why does the media never report in the interest of FTBs? It's a miracle and not like this in other countries. Like so many others here, I can't wait for house prices to come down. And I hope that people will start to get some sense and realise how much money it is they pay for a house.

Great post Ananda. Thanks for that.

And welcome to the forum.

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Does anyone know why EA's (well the ones I have spoke to) get so offended when you put an offer in at 10-20% below asking?

I follow this up with the fact I am chain free, FTB, and suggest that previous recent sales have been in the same region and why is said property at peak 2007 prices? I know they work for the vendor and at the same time as talking up the market to me, they would talk the market down to the vendor.

They usually stutter in their answer, but I get a sense that they are offended? Is it due to the fact they have spent so much time invented this arbitrary asking price and a realistic offer makes them look stupid ? (sorry confirms they are stupid :)) IMO they promise the vendor we can get you £X to secure business, but surely dropping the asking price 6 months later would be a good idea... or perhaps they are scared of sentiment change in the local market?

Ultimately what does the actual EA himself (the EA's from high street chains) get % wise? when securing a sale? In my example I put an offer in for a house that was set at 370k and the last place sold for 295k in 2010 and in 2007 was around £315. Property was for sale for 6 months and needed work. Put offer in for £315k, they almost put the phone down! I thought what a pretentious prat as he had the cheek to say, I am going to change your buyer inquiry range now down by 60k!

Said property is now with another agent and is STCC, what has that agent missed out on bonus wise? I would figure it's now in EA's interest to get volume through, as a few 50k here or there on a 300k house would be very small in terms of their personal bonus?

Maybe they get emotionally involved and are so egotistical that dropping the price is out of the question and forget the bottom line.. sales!

I live in Mid-Suusex and the EAs around here are by and large a truly sanctimonious bunch. Asking pricess are well above 2007 and they couldn't care less whether you have sold your property or not...and I have. As for putting in an offer at 2007 levels which locally means 15-20% below asking prices the reaction is one of complete contempt.

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When I worked in an international office in Germany, all the Brits there rushed out to buy houses as soon as they arrived (especially since they thought the prices were at bargain level and certain to rocket up). Those that moved on or back to the UK had real headaches trying to sell them later... Imagine being an accidental landlord while living in a different time zone!

The market is so different over there. Your average Joe (or Joachim) really does want to build and not just buy their own place. Until very recently, the government gave generous sums of money to people to do just that. Renting is not a sign of being a failure (in the same way that a being a tradesman isn't either). People only buy when they are sure they are going to settle somewhere and speculation is far less common. The result, much lower high prices and an economy that brushed off the Credit Crunch...

I really do prefer the German system when it comes to housing. When it comes to things like being flexible and sleeping in, they suck though... (in case anyone hits reply and tells me to bog off back there then!).

Edited by rantnrave

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I also wonder whether agents that have a sale about to go through will not drop prices on similar places in case the other buyers start thinking 'hang on, we want money off too'.....

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When I worked in an international office in Germany, all the Brits there rushed out to buy houses as soon as they arrived (especially since they thought the prices were at bargain level and certain to rocket up). Those that moved on or back to the UK had real headaches trying to sell them later... Imagine being an accidental landlord while living in a different time zone!

The market is so different over there. Your average Joe (or Joachim) really does want to build and not just buy their own place. Until very recently, the government gave generous sums of money to people to do just that. Renting is not a sign of being a failure (in the same way that a being a tradesman isn't either). People only buy when they are sure they are going to settle somewhere and speculation is far less common. The result, much lower high prices and an economy that brushed off the Credit Crunch...

I really do prefer the German system when it comes to housing. When it comes to things like being flexible and sleeping in, they suck though... (in case anyone hits reply and tells me to bog off back there then!).

I was born in Germany and can confirm everything you said, the market couldn't be more different. Renting is the norm and buying a house is not a hobby, it is done once, maybe twice in a lifetime. It is kind of funny that the Brits in Germany rushed to buy houses at "bargain prices" with the intention to make a profit... The lack of EAs in Germany and non-existence of property porn programmes on tv should have made them suspicious though. :rolleyes:

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you mustn't forget how infantilised the nation has become under Gordon Brown

this broad mindset - a sort of illogical sunny positive thinking - will take years and years to shift

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I spoke to a friend back home in West Sussex today (I'm in USA). She has had her flat on the market for 7 months and only attracted 4 viewings. The estate agent has advised her NOT to reduce the price yet. It seems very odd behaviour to me, especially after I looked on Wrongmove.co.uk. There are hundreds of nice looking unsold flats on the market. I would have reduced the price after the first 3 months or taken the place off the market.

My friend's flat is ground floor, 2 bedroom place. There is nothing obviously wrong with it. This type of property would have been sold in 6 weeks a few years back.

This reminds me of the early 90s. You couldn't give flats away. I know someone that held a party in the office when he sold his Hove flat, with negative equity, for 50K. That was how desperate things got. My, how people forget.

I think history is trying to tell us something. :huh:

I was in an EA recently and while there a vendor was talking to the agent. The vendor suggested she should chip the asking price of her house a few thousand as there had been no interest for a while.

The EA's response was to tell her that offers were coming in at around 15% below asking price so there was no point.

This was a couple of weeks ago and things have deteriorated since so wonder what her plan of action will be now. These vendors will (if they don't withdraw the property) end up chasing the market down.

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I was in an EA recently and while there a vendor was talking to the agent. The vendor suggested she should chip the asking price of her house a few thousand as there had been no interest for a while.

The EA's response was to tell her that offers were coming in at around 15% below asking price so there was no point.

that's some of the weirdest anti-logic I have heard of - don't reduce the price as frankly it's worth far less so why bother...

This was a couple of weeks ago and things have deteriorated since so wonder what her plan of action will be now. These vendors will (if they don't withdraw the property) end up chasing the market down.

it's so effing predictable

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that's some of the weirdest anti-logic I have heard of - don't reduce the price as frankly it's worth far less so why bother...

it's so effing predictable

Well I'd like them to drop the price, so I know what I can get it for, but there are people out there who beat someone down 15 percent and a really happy.

Being in London, it's a pain in the bum. Never sure what you could get places for, and as I'm not buying yet, aren't going out to haggle for the fun of it!

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( I live in West Sussex. )

Could it be possible that in small towns, with very few estate agents, they try to "co-ordinate" the market, to avoid falling prices?

I think you might be on to something, especially in the villages. I will never trust agents. I owned a very desirable 4-bed-detached bungalow in a Sussex village. I had 2 valuations and put the house on the market. I didn't get any viewings and knew something underhand was going on. I asked my Dad and friends to phone in and make enquires. The agent told them all the same story: we have a buyer for that house!!!! The buyer, who wanted my house, had originally lost the house to me 4 years earlier. The agent told the buyer he would get him my house so long as he got their house to sell. Needless to say I told the agent his fortune. I found out who the buyer was and told him he would never own my home. He was really upset because it was the best located big bungalow on level ground. His wife made several emotional appeals to me on the phone. Agents are scum; they managed to upset 3 innocent people. I hope this recession puts them all out of business.

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I don't understand, on what grounds did he recommend NOT dropping the price? Did he think he could get more in the spring or something?

Whatever you do or don't believe on HPC, the notion that estate agents don't make any commission on something they don't sell, is a pretty believable one.

I'd of thought the agent would have been rather grateful they'd drop the price and he'd make a sale. We keep hearing stories about estate agents saying 'don't drop the price', are we sure it's not vendors who only hear the part they want to?

I think that might be part of the rationale. It probably isn't a good idea to drop the price before Christmas. The agent told her it's a very slow market!!!!

I would take the contrarian approach and shave off a couple of grand before Christmas and get some new photos done. I'd then shave off another couple of grand in the Spring. If I have a 'professional' working for me I want results. They are being paid an enormous sum of money for a single transaction. Let's face it, estate agents have enough time on their hands to market each house beautifully. All to often you see poorly taken pictures of unmade beds or out of focus pictures. Why? They are not professionals and never will be. Nobody takes them seriously, because will all expect waffle and BS.

Edited by Xurbia

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Does anyone know why EA's (well the ones I have spoke to) get so offended when you put an offer in at 10-20% below asking?

I follow this up with the fact I am chain free, FTB, and suggest that previous recent sales have been in the same region and why is said property at peak 2007 prices?

I'm a STR, cash buyer. I've made a few 20-40% below asking price offers over the past couple of years (unfortunately all rejected). I don't think any EA would be offended with a -10% offer, but go much beyond that and the EA starts to worry about the vendor's outraged reaction! A few EA's have come out and told me so, "I can't seriously tell that to the homeowner" they've said. I guess they position it along the lines of "you've received a ridiculously low offer which I'm not suggesting you take seriously, but I'm legally obliged to pass all offers on so here it is..."

Even as a cash buyer I no longer expect to have my offers accepted, but I leave my offers open and I'm hopeful that as these properties inch down in price at some point the vendor may become reconciled to the new market conditions and at least strike up a negotiation.

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I think you might be on to something, especially in the villages. I will never trust agents. I owned a very desirable 4-bed-detached bungalow in a Sussex village. I had 2 valuations and put the house on the market. I didn't get any viewings and knew something underhand was going on. I asked my Dad and friends to phone in and make enquires. The agent told them all the same story: we have a buyer for that house!!!! The buyer, who wanted my house, had originally lost the house to me 4 years earlier. The agent told the buyer he would get him my house so long as he got their house to sell. Needless to say I told the agent his fortune. I found out who the buyer was and told him he would never own my home. He was really upset because it was the best located big bungalow on level ground. His wife made several emotional appeals to me on the phone. Agents are scum; they managed to upset 3 innocent people. I hope this recession puts them all out of business.

Interesting I have had a big run in with M McT whose practices I considered referring to to various commissions

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  • 311 Brexit, House prices and Summer 2020

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      • down 5% +
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