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geranium

Certain Estate Agents And The Buyer-seller Stand-off

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I am 34 and have bought (1998) and sold (2004) a flat, but I have only just begun to understand why estate agents are so disliked. OK, I've been a bit slow, but I'm a "nice", forgiving type of person.

Thankfully, some of them still seem fairly sensible - they will market a property at price slightly above the best price they think it can achieve, then reduce the price as necessary until it finds a level at which there are buyers. That way they keep the number of transactions flowing through, which in any case matters more to them than the exact price achieved.

There is one firm that is a little bit different. Maybe you can guess which it is. It charges the Seller a higher rate of commission on the sale (2% compared to 1.5% or less at other agents) but claims the website, marketing and "educating buyers to pay the asking price" can help sellers achieve a higher price than they would otherwise. The extra achieved then covers the additional 0.5% of commission. I know this because this agent came round to value my flat, but in the end I chose a more realistic agent, whom I thought stood a better chance of selling it in a reasonable period of time at a reasonable price.

This agent's business model works nicely in a rising market - the market eventually catches up with overpriced properties and they sell. Seller and estate agent are happy. However, it doesn't work in the current market. Properties are being left high & dry but the Sellers cannot accept an offer at a sensible level below the asking price because:

1. They are being "educated" by the agent to expect/hold out for more.

2. They may not even get to hear about the potential offers they could have. This agent does not take buyers seriously if they want to offer significantly less than the asking price. Your calls are not returned and they won't show you around properties if they think you will not offer the price they want to achieve for the Seller. Instead they get their financial services arm to call you, to help you borrow more in order to offer more.

This agent makes me particularly cross because if you say your budget is X, they show you properties for X plus a a fair bit more, thinking they will persaude you to borrow more and offer more. Yet they won't let you make offers significantly (eg 7-10%) below the asking price, even though you are offering at the top of your stated budget on properties they have shown you.

I almost feel sorry for the Sellers, who are essentially being mislead by the agent to expect too high a price, as well as for Buyers like us, who probably get bullied into paying too much.

Does this ring true with anyone else out there?

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Hi geranium,

Welcome to HPC!

Nice anecdote too.

When I sold my flat (nearly 2 years ago) I had also experienced this type of agent. I invited 4 to value the place. Two were OK, realistic about price and helpful advise. But the other two were idiots (sorry can't think of a better word), one told me I could 'ask what I want' for the place and the other tried to get me to sign the contract there and then, telling me he had already arranged 2 viewings for the place. The first fool came from a small firm, but the second fool came from Connells, they are well known around the St Albans area and there reputaion proceeds them (if you know what I mean). Could it be them?

No, it's probably Foxtons!

Anyway, look forward to reading more of your posts.

LG

Edited by laughing_goat

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I am 34 and have bought (1998) and sold (2004) a flat, but I have only just begun to understand why estate agents are so disliked. OK, I've been a bit slow, but I'm a "nice", forgiving type of person.

Does this ring true with anyone else out there?

Classic example showing the influence of Estate agent chains which are owned and just a 'front' for various Banks/Building societies.

Perhaps it will also explain why House prices are not behaving in a "classically predictable" fashion (due to massive interference/manipulation to keep prices as high as possible by unseen forces behind the Media/Press/Govt brainwashing propaganda)

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Guest rigsby II

Estate agents are amazing.

When I phone them up asking about how the sale of my house is going after a viewing, its all doom and gloom and no-ones buying (except sub £80k to BTL - still hoovering those up) what about dropping or giving 5% deposit and all the rest of the spiel.

Yet when I phone up to view a house, its all boom-time, they've had loads of viewing, loads of offers and all that cr*ap, wont take anything except a gnats left nodger under asking.

I asked our EA if she was seeing the same with other sellers and she said yes, nowt much over £120K is shifting.

So if HPC afficionados think they are so clever that its only them thats seeing the problems, oh no, its widespread - except the bit about actually dropping the price of the house - its a Mexican Standoff at the mo.

At least my neck of the woods, I'm sure elsewhere it's not a problem <_<

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Guest The_Oldie

Forgive my ignorance but are not estate agents legalled obligated to pass on the details of an offer to the seller?

I didn't think they could just laugh and refuse.

Yes, they are legally obliged to pass on the offer. But when faced with a proceedable cash offer of say 20% below asking price, they panic and try to laugh it off as derisory, insulting etc. I've had a few cases like that, you have to get tough and insist that they pass on the offer and confirm it to you in writing. They are trying their hardest to keep prices artificially high and the last thing they want is a vendor accepting a low cash offer as it messes up their dubiously proceedable asking price chains where they stand to make three or four commissions.

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Hi,

Not in my experience.

I found that the bigger, well established EAs just appeared to be looking for volume and IMO undervalued my house initially.

We sold using an independent agent who was excellent, knowledgeable and realistic.

w.r.t your comment about EAs 'upping' your budget. I don't think it is a arrogant attempt to increase your spending ceiling, (although I always feel a little indignant), I have always assumed it is to allow offset for an offer.

Don't think this holds true at the moment though!, i.e: 200K budget 260K property value ceiling :D

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Quite right, estate agents are legally obliged to pass through an offer to the Seller.

This particular agent demands detailed "feedback" after a viewing. If he gets a sense that you're interested but not at that price, he starts to argue with you (which is quite exhausting and actually begins to put you off the property). Then he avoids your calls. Then he blacklists you (no more viewings unless you play ball and show interest in offering close to the asking price.)

To be honest we haven't got as far as wanting to make any sort of offer through this agent, partly due to agro of dealing with him. I guess if we really did want to, we could always send an e-mail with a read receipt demand attached. However, there's no point in putting in an offer if all he is going to do is call the seller and say, look, here's an offer, but I didn't encourage it, and I think you can do better. Of course it would get turned down - so it's not worth bothering.

I simply don't like the way that this agent does business. We are genuine buyers with a certain budget and we will want to buy a house sooner or later.

Surely most buyers in this market wouldn't let themselves be bullied into overpaying? If that is the case, then this agent could be missing out on sales due his over-aggressive tactics. It's the sort of thing they can get away with in a good market but in a more shaky one.... I'm not so sure.

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Forgive my ignorance but are not estate agents legalled obligated to pass on the details of an offer to the seller?

I didn't think they could just laugh and refuse.

I don't know, but you can always write directly to the seller, to inform them of their estate agents negligence if you think the offers aren't getting to them.

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Guest The_Oldie
However, there's no point in putting in an offer if all he is going to do is call the seller and say, look, here's an offer, but I didn't encourage it, and I think you can do better. Of course it would get turned down - so it's not worth bothering.

There is a point in putting in the offer. Of course they will advise the vendor not to accept, but the fact that the offer has been made will play on the vendors mind if they have still not sold some months later. I follow up a few months later and ask the agent to re-submit my offer. They often refuse of course, but soon change their minds when I threaten to put an offer directly to the vendor. Some of these agents are infuriatingly smug and I get great pleasure in taking them down a peg or two. If they refuse to show any more properties, a letter to their group MD usually has the desired effect.

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Thanks for the advice, Oldie. I was beginning to think all I could do was save up to cover the gap between my budget and the agent's asking price. Or wait for a HPC to wipe the agent off the face of the earth and make property more affordable.

Clearly, I need to get a whole lot more stroppy with these people!

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Guest The_Oldie
Clearly, I need to get a whole lot more stroppy with these people!

Well that's what I do. Mind you, I've yet to secure a property at a price that I'm willing to pay, which is about 20% below perceived current market value.

I honestly don't think it hurts to play hardball with these jokers though. They're never going to be your friends and most of them have skins thicker than the proverbial rhinoceros.

Having said the above, I must say that I have found some agents to be perfectly easy to deal with and the above approach is often neither necessary nor desirable

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Having said the above, I must say that I have found some agents to be perfectly easy to deal with and the above approach is often neither necessary nor desirable

Perfectly true, it's only F*****s I have a problem with.

Otherwise, I had a good experience selling my troublesome flat, through a reasonable agent, who even managed to find me a particularly daft BTL guy who clearly hadn't read any of the paperwork when we exchanged contracts, thank goodness .... but that's another story.

I've also had perfectly sensible experiences viewing properties with other agents.

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Estate agents are amazing.

When I phone them up asking about how the sale of my house is going after a viewing, its all doom and gloom and no-ones buying

What has become of that massive profit you were boasting about? :rolleyes:

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Guest rigsby II

What has become of that massive profit you were boasting about? :rolleyes:

You wouldn't let it lie :D

The argument I had with our EA this morning was this.

My house is overpriced.

The house I want to buy is overpriced.

I'll grin and bear the difference in price to move into a better house, as everything to some extent is relative.

But the problem is this.

I can't sell at asking and so see me taking 10-20% hit which is OK if the upstream seller does the same.

But they wont.

So I take 10-20% hit yet am still expected to be paying this 10-20% premium on the upstream house.

Which is financial suicide.

Result - misery (well sort of) - everyone cant complete and everyone can't sell.

The bloke at the top of the chain has to take his head out of his ars*e and see whats happening then the chains will loosen. Until then its stagnation for the majority - odds and sods will sell, they always do, but majority won't

The EA just nodded - kind of agreed.

Anyway 400% house price inflation on a dump aint much to write home about - its pocket money compared to down south.

:)

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You wouldn't let it lie :D

The argument I had with our EA this morning was this.

My house is overpriced.

The house I want to buy is overpriced.

I'll grin and bear the difference in price to move into a better house, as everything to some extent is relative.

But the problem is this.

I can't sell at asking and so see me taking 10-20% hit which is OK if the upstream seller does the same.

But they wont.

So I take 10-20% hit yet am still expected to be paying this 10-20% premium on the upstream house.

Which is financial suicide.

Result - misery (well sort of) - everyone cant complete and everyone can't sell.

The bloke at the top of the chain has to take his head out of his ars*e and see whats happening then the chains will loosen. Until then its stagnation for the majority - odds and sods will sell, they always do, but majority won't

The EA just nodded - kind of agreed.

Anyway 400% house price inflation on a dump aint much to write home about - its pocket money compared to down south.

:)

I've also been thinking about this. If I were a home owner wanting to move up, I would find the house I want to buy and offer full asking price, and make it clear that the sale of your house will fund (most of) the purchase.

Then say to your EA get me any offer, when you get the offer pass the shortfall up the chain - eventually the EAs will want the commision if there are no sales. But, like you say, it requires EAs to think and buyers to accept this.

With regards to EAs wanting to up your budget, it couldn't be more true. 2 years ago when I was caught in the 'house bubble hype' and I decided I would borrow 4x times my salary. The EA kept phoning me saying I could get 6-7x to get that dream house, despite the issues I raised (IRs, unemployment etc). It was all crazy, and I didn't buy.

But this did lead me to research why house prices were so crazy... and it lead me to here!

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  • 339 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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