Jump to content
House Price Crash Forum
Sign in to follow this  
bear_or_bull

How Worried Are The Estate Agents

Recommended Posts

So, I've just had a call from Foxtons. Last year I contacted them when I was looking for a property to rent. I'm obviously still on their database. They called me because (and I quote)

"the amount you are paying for rent could buy you a mortgage. We are offering free financial advice to help you with mortgages..."

So, how worried is Foxtons then?

For the record though (because this is my first post):

- Yes, I think house prices are overvalued (and a major threat to the future wealth of the generation of FTBs buying now).

- But no, I don't think they are going to come down any time soon, at least without a major hiccup in the economy. Everyone is just too conditioned that the only measure of cost is cash flow affordability (i.e. initial payments).

- However, the key clouds on the horizon I'm watching are: bond yield inversion in the states, plus the huge US deficits; rising Interest Rates in the States; a revalued yuan; rising indebtedness UK-side; manufacturing price pressure in the UK; and the oil price (perhaps likely to drop in the next couple of years, but up, up, up in the long term - and if there's a cold winter or a terrorist attack... well)... From my point of view - fingers crossed for a recession. But it might not happen.

- As for this forum. There's a lot of emotion on it. Intelligent FTBs are concerned that their future wealth is compromised, and some make arguments based on this. Unfortunately, there is no law that says that this generation has to be as rich as the last... The Bulls, annoyingly, have often been proved more right than wrong.

Share this post


Link to post
Share on other sites

I went on a date with a part time/saturday EA on wednesday evening ;p The number looking for new rental properties is well down according to a defector from another EA to hers that deals with rentals (people sharing more and staying at home?) and people buying is also down this year. She told me off her own back twice she believed we were heading for a crash.

She isnt worried (she is training to be a barrester), its just fact...

Edited by moosetea

Share this post


Link to post
Share on other sites

Yesterday received this circular email from an EA I contacted fairly recently, and have never arranged any viewings from, it made me chuckle.....

Hello,

we're creeping towards Saturday, and my diary is quickly filling up. Please

look through any details I have recntly sent you by e-mail, and if any are

of interest I will be happy to arrange a viewing for you. There are some

great properties, (including recent price reductions, a fall through and

some new proerties), and we're reaching the last safe moment if you want to

move by Christmas (yes, it can be done!).

So, please give me a call and get to see what could be your next home.

I look forward to hearing from you, kind regards

.........

Share this post


Link to post
Share on other sites

Foxtons & Hamptons called us within minutes of each other last week.

And I thought we'd been blacklisted by both for bad behaviour (ie saying we liked the properties but thought the prices were daft).

They're not worried, they're desperate.

Share this post


Link to post
Share on other sites

Part of my Saturday morning entertainment line up occurs when I go into my high street and drop in on an EA office and watch a number of bored EAs quickly scramble to look as if they are doing something. Phones suddenly get picked up and animated conversations start with someone who must have just called. Some pick up a bundle of details and aimlessly sort them into two piles and others just sit there with a wide stupid grin knowing they have been caught doing sod all.

They know its an intensified propaganda war now. My bet is that the EA boardrooms are discussing when to change tactics by talking the market down to free up some of the long chains that are the only signs of activity in my area (West Midlands). Surely the EAs are at the point where they can no longer talk prices up because the ceiling on affordability has long been hit so now must be the time to get people to start reducing prices so that chains can complete. But I do see how that would precipitate a panic and a sure-fire domino effect.

Share this post


Link to post
Share on other sites

It amazing isn't it. Foxton did the same to me recently after 18 months of radio silence. Its an inverse law relationship - the better the housing market is really doing the less likely you are to get estate agents chasing you (oh, no, you chase them!) because they are so busy - when it tanks they are all over you like a long lost cousin.

Share this post


Link to post
Share on other sites

Afternoon everyone. This is my first post here after a few weeks of lurking around the site having been directed to it through a work contact.

Cards on the table time. I work for an estate agency in Surrey (not telling you which one, sorry!!) that alone is not going to win me many friends here i know but i have enjoyed reading many of the posts over the past couple of weeks and just wanted to offer a slightly different point of view.

Understandably, the accepted wisdom is that EA’s have a VI in very high house prices. However, this is not as straight forward as it may seem. EA’s buy houses too, and despite what the public perception is, an average EA salary is in the £25K-£35K range therefore they are also likely to suffer the same affordability problems as many others. Of course if house prices fall, EA fees will fall in proportion however what I expect will happen is that good EA’s will sell more houses and their total revenue’s will remain about the same and bad EA’s will see their revenue’s fall (something I’m sure we’d all be happy about!!) So to answer the question of this thread good EA’s shouldn’t worry at all, bad ones should begin to check out where the local job centre is!!

I have not posted this today to try and wind anybody up or offend anyone merely to try and contribute to the debate so if anyone feels I am speaking out of turn please accept my apologies as this was not my intention.

Share this post


Link to post
Share on other sites

I have not posted this today to try and wind anybody up or offend anyone merely to try and contribute to the debate so if anyone feels I am speaking out of turn please accept my apologies as this was not my intention.

I don’t believe you, you sound too nice to be an Estate agent. (welcome :) )

Share this post


Link to post
Share on other sites

Afternoon everyone. This is my first post here after a few weeks of lurking around the site having been directed to it through a work contact.

Cards on the table time. I work for an estate agency in Surrey (not telling you which one, sorry!!) that alone is not going to win me many friends here i know but i have enjoyed reading many of the posts over the past couple of weeks and just wanted to offer a slightly different point of view.

Understandably, the accepted wisdom is that EA’s have a VI in very high house prices. However, this is not as straight forward as it may seem. EA’s buy houses too, and despite what the public perception is, an average EA salary is in the £25K-£35K range therefore they are also likely to suffer the same affordability problems as many others. Of course if house prices fall, EA fees will fall in proportion however what I expect will happen is that good EA’s will sell more houses and their total revenue’s will remain about the same and bad EA’s will see their revenue’s fall (something I’m sure we’d all be happy about!!) So to answer the question of this thread good EA’s shouldn’t worry at all, bad ones should begin to check out where the local job centre is!!

I have not posted this today to try and wind anybody up or offend anyone merely to try and contribute to the debate so if anyone feels I am speaking out of turn please accept my apologies as this was not my intention.

Speaking out of turn? Jeez so many new posters are that terrified of some of you mentalists on here that they doff the cap and bow in your very presence :P

Edited by Converted Lurker

Share this post


Link to post
Share on other sites

Afternoon everyone. This is my first post here after a few weeks of lurking around the site having been directed to it through a work contact.

Cards on the table time. I work for an estate agency in Surrey (not telling you which one, sorry!!) that alone is not going to win me many friends here i know but i have enjoyed reading many of the posts over the past couple of weeks and just wanted to offer a slightly different point of view.

Understandably, the accepted wisdom is that EA’s have a VI in very high house prices. However, this is not as straight forward as it may seem. EA’s buy houses too, and despite what the public perception is, an average EA salary is in the £25K-£35K range therefore they are also likely to suffer the same affordability problems as many others.

Maybe we could start a benevolent fund? :) Lots of people are caught in this increasingly peverse system, not least those stuck on a runaway train itself, no doubt this is also true of bank workers on a basic salary having to push everything on commission to earn a decent wage.

We should look at the basics, homes are primarily there for living in, sounds daft but we've spent the whole of this new century believing that they're actually pawns to be used for rampant speculation, providing dividends, new cars, holidays or pensions.

Share this post


Link to post
Share on other sites

I don’t believe you, you sound too nice to be an Estate agent. (welcome :) )

There are a few of us about believe it or not!!

Thank you for the welcome, very kind!

:D

Share this post


Link to post
Share on other sites

There are a few of us about believe it or not!!

Thank you for the welcome, very kind!

:D

Welcome from me too! It's good to get an EA's view on this site. My Dad's an EA, and a nice one (although I'm probably biased!), and he's seen out the booms and the busts in his time, and when others went to the wall he managed to keep going because people knew he was honest - you're right, the good ones will do OK.

Share this post


Link to post
Share on other sites

what I expect will happen is that good EA’s will sell more houses and their total revenue’s will remain about the same and bad EA’s will see their revenue’s fall

Hi Mildura

By good EAs you mean EAs that price realistically for the market and charge the vendor a reasonable %? Bad EAs price high, charge a relatively high % and try to get high offers out of buyers by offering mortgage consultancy services in order to stretch your budget a bit further? That's my impression but I'm not an EA. Would be interesting to hear your view.

Also, it's great to have a source of inside information on the site! :) What's your (real) view of the market in your area at present?

Edited by geranium

Share this post


Link to post
Share on other sites

Mildura,

Welcome, good to have some people from the dark side even if we do give you some stick most of the time. :D

One thing about reduced transaction levels is that it is possible that even with say 20-30% lopped off volume there could still be enough overall turnover at higher valuations to keep most EA's afloat if the EA's themselves did not have much increased costs compared to say 2/4/5 years ago. However tyo keep the deals going it seems that quite a few chains are requiring everything to be pared to the bone regarding costs - like getting the agents to reduce their comission % and of course there is also the problem of what seem like a total over-abundance of EA offices, many more than just a few years ago. Have you any idea as to what % of deas are going through with heavily discounted comission fees as this may give an indication of how long EA's in general can hold out before changing tack altogther?

Share this post


Link to post
Share on other sites

There are a few of us about believe it or not!!

Thank you for the welcome, very kind!

:D

This is turning into Channel 4, so...

"I have a slight difficulty selling my run down terrace house in a drab part of town, local amenities are very good, there is a crack den next door and a burlesque house next door on the opposite side, lighting is very good as a dustbin or car is set alight most nights, the area is very safe thanks to the good work of the police, there is a patrol or raid most mornings, bon fire night is observed on a weekly or even daily basis so the locals are very patriotic! BUT I'm having troubles reaching my £2m asking price, I CANNOT compromise on this price because of my next house and my overdraft (!), mine is really the nicest house on the street with the fewest broken windows and the most remaining roof tiles, any suggestions from the experts? Maybe I should chuck out the chintz and get rid of the plastic tablecloth, or possibly remove the burned out hulk of a car from my front garden (and back), aside from that I cannot see why anyone could resist my beautiful little house! People are just so picky thesedays! But I'm ok because the government will never allow house prices to fall"

Share this post


Link to post
Share on other sites

Thank you all for the great welcome – wasn’t really sure what to expect! It seems my fears were totally misplaced!!

Geranium, exactly what I meant by good EA’s. Ironically bad EA’s are far more likely to offer a lower % as this is the only way they can get business. Their EA skills aren’t up to much so they have to bribe sellers to come to them with very low commission. (This isn’t a hidden agenda to get people to pay more, honest!!)

My office is in a large Surrey town and right now anything that is sensibly priced is selling fine, anything that is heavy on price is struggling to get viewings let alone offers. I really can’t see any sudden reduction in prices unless IR go up a lot. However, I can see prices coming down 5% maybe 10% in some cases over the next couple of years, certainly won’t be increasing!! I own a 2 bed flat bought in 2001 for 102k, now worth circa 150k. An decent 2 bed house will set me back 230/240k, don’t really fancy getting another 80k ON TOP of current mortgage ( not sure i could even if I wanted too!!) so a bit of a reduction in prices works well for me too.

Share this post


Link to post
Share on other sites

Ironically bad EA’s are far more likely to offer a lower % as this is the only way they can get business. Their EA skills aren’t up to much so they have to bribe sellers to come to them with very low commission. (This isn’t a hidden agenda to get people to pay more, honest!!)

This is interesting - I didn't find anyone undercutting on commission as a seller. I found the commission rate was 1.5-2.0% pretty much from all agents expect Foxtons, who was charging 2.5% at that time (mid 04). I didn't go with Foxtons despite the high valuation because I just wanted to get rid of the property fairly quickly and it was never going to be the easiest flat to sell. It had to have an attractive price on it.

Foxtons is also my least preferred agency as a buyer. In a trickier market they are still pricing very high and seem reluctant to guide sellers to a realistic level. They'd much rather bully buyers up to their price and get their mortgage advisor to encourage you to stretch a bit further. Their business model works in a rising market because the market catches up with their high prices and the properties eventually sell. But it only works in the current market if buyers fall for it. It annoys me because a number of houses on their books have been sitting there for months and months. If they were with one of the more reasonable estate agents, we'd probably be able to consider being more interested in these properties. Often the asking prices seem about 20% too high. Prices are rarely reduced and when they are, by only 3% or so. Or maybe these properties belong to people just testing the market, who don't really need to sell?

I'd love to know how Foxtons are trading at the moment because they don't seem to be selling much, as far as we can see.

Share this post


Link to post
Share on other sites

Thank you all for the great welcome – wasn’t really sure what to expect! It seems my fears were totally misplaced!!

Geranium, exactly what I meant by good EA’s. Ironically bad EA’s are far more likely to offer a lower % as this is the only way they can get business. Their EA skills aren’t up to much so they have to bribe sellers to come to them with very low commission. (This isn’t a hidden agenda to get people to pay more, honest!!)

My office is in a large Surrey town and right now anything that is sensibly priced is selling fine, anything that is heavy on price is struggling to get viewings let alone offers. I really can’t see any sudden reduction in prices unless IR go up a lot. However, I can see prices coming down 5% maybe 10% in some cases over the next couple of years, certainly won’t be increasing!! I own a 2 bed flat bought in 2001 for 102k, now worth circa 150k. An decent 2 bed house will set me back 230/240k, don’t really fancy getting another 80k ON TOP of current mortgage ( not sure i could even if I wanted too!!) so a bit of a reduction in prices works well for me too.

Wow. A real-life, sensible EA on this site. Do you realise that you're rarer than the yeti?

Thanks for the info. What you say sounds about right to me.

Have you noticed any change in buyers' attitudes? Less desperate to get on the ladder etc.?

Share this post


Link to post
Share on other sites

"Two Kensington estate agents have been fined more than £18,000 for littering the streets with bogus to-let boards.

Andrew Chard and Barry Manners, directors of Chard Estate Agents, pleaded guilty to eight offences of flyboarding at West London magistrates' court.

Their activities were investigated after a number of complaints from residents and a rival estate agent.

Trading standards officers found that the flats Chard was claiming to represent were not available to let as advertised. After this week's hearing, Mr Manners said: 'We do not have a policy of flyboarding. In this case the local manager had omitted to remove the boards after the properties were let.

'It was an administrative error. Nevertheless, we accept the judgment and fully support the council's policy of zero tolerance of flyboards in the area. The manager concerned has been disciplined.'

Chard and Manners were fined £18,000 plus costs. The company's website boasts that Chard 'has built a reputation for being refreshingly honest about property'.

Flyboarding is illegal but an increasingly common activity of unscrupulous estate agents who see it as a form of cheap advertising.

Cllr Fiona Buxton, Kensington's cabinet member for environmental health, said: 'Flyboarding gives a misleading impression of the amount of business an agent is doing in an area and it is intended to affect the choices of potential sellers when selecting an agent to market their property. "

Above posted on Firstrung. Seems thay are getting increasingly desperate!!!

Share this post


Link to post
Share on other sites

So, I've just had a call from Foxtons. Last year I contacted them when I was looking for a property to rent. I'm obviously still on their database. They called me because (and I quote)

"the amount you are paying for rent could buy you a mortgage. We are offering free financial advice to help you with mortgages..."

So, how worried is Foxtons then?

For the record though (because this is my first post):

- Yes, I think house prices are overvalued (and a major threat to the future wealth of the generation of FTBs buying now).

- But no, I don't think they are going to come down any time soon, at least without a major hiccup in the economy. Everyone is just too conditioned that the only measure of cost is cash flow affordability (i.e. initial payments).

- However, the key clouds on the horizon I'm watching are: bond yield inversion in the states, plus the huge US deficits; rising Interest Rates in the States; a revalued yuan; rising indebtedness UK-side; manufacturing price pressure in the UK; and the oil price (perhaps likely to drop in the next couple of years, but up, up, up in the long term - and if there's a cold winter or a terrorist attack... well)... From my point of view - fingers crossed for a recession. But it might not happen.

- As for this forum. There's a lot of emotion on it. Intelligent FTBs are concerned that their future wealth is compromised, and some make arguments based on this. Unfortunately, there is no law that says that this generation has to be as rich as the last... The Bulls, annoyingly, have often been proved more right than wrong.

...I am with you on keeping a very close eye on the yuan......when that revalues,the end result will be the import of inflation on the west,with resultant higher IR's irrespective of growth.

...believe it or not,the US would actually quite like a bout of inflation,as the higher IR's will be ammo in the bank for cutting when the boomers retire.....and so begins the next cylce....in about 2012.

it's pretty bloody obvious to me that we will be following the same pattern as we did from 73/75 thru '89....so don't be surprised to see IR's here at about 8% or in a few years.

Share this post


Link to post
Share on other sites

This is interesting - I didn't find anyone undercutting on commission as a seller. I found the commission rate was 1.5-2.0% pretty much from all agents expect Foxtons, who was charging 2.5% at that time (mid 04). I didn't go with Foxtons despite the high valuation because I just wanted to get rid of the property fairly quickly and it was never going to be the easiest flat to sell. It had to have an attractive price on it.

Foxtons is also my least preferred agency as a buyer. In a trickier market they are still pricing very high and seem reluctant to guide sellers to a realistic level. They'd much rather bully buyers up to their price and get their mortgage advisor to encourage you to stretch a bit further. Their business model works in a rising market because the market catches up with their high prices and the properties eventually sell. But it only works in the current market if buyers fall for it. It annoys me because a number of houses on their books have been sitting there for months and months. If they were with one of the more reasonable estate agents, we'd probably be able to consider being more interested in these properties. Often the asking prices seem about 20% too high. Prices are rarely reduced and when they are, by only 3% or so. Or maybe these properties belong to people just testing the market, who don't really need to sell?

I'd love to know how Foxtons are trading at the moment because they don't seem to be selling much, as far as we can see.

From my experience (about 10 years, a few different locations around Surrey) Foxtons appear to be very successful in LOndon, however all this time the market has been rising which supports what you say perfectly. In the last 18 months Foxtons have started operating in Surrey and as their opening offer advertised 0% commission for the first 300 properties in each town they would be operating in: Woking, Weybridge, Guildford etc which ensured a rush of people on their books straight away. But, they made the mistake of overpricing many of the properties they dealt with (remember this was Spring 04 - market not flying exactly) Since then they have only had a negligable impact on the market in Surrey - certainly not the force they seem to be London. Even amongst EA's Foxtons are despised if that tells you something!

On the fees front a good EA won't be able to do the job properly at a fee much lower than 1.5%, but there are some around me who will go down to 1% to get the business. However the theory is the quicker they are to negotiate their own fees the quicker they will want you (the seller) to negotiate your price. So 1.5% is going to get you a good agent, over 2% (for sole agency) is very much on the expensive side these days and around 1% i'd think they'd be relying on a very high turnover so would want to try and get you to take an offer as quickly as possible.

Share this post


Link to post
Share on other sites

From my experience (about 10 years, a few different locations around Surrey) Foxtons appear to be very successful in LOndon, however all this time the market has been rising which supports what you say perfectly. In the last 18 months Foxtons have started operating in Surrey and as their opening offer advertised 0% commission for the first 300 properties in each town they would be operating in: Woking, Weybridge, Guildford etc which ensured a rush of people on their books straight away. But, they made the mistake of overpricing many of the properties they dealt with (remember this was Spring 04 - market not flying exactly) Since then they have only had a negligable impact on the market in Surrey - certainly not the force they seem to be London. Even amongst EA's Foxtons are despised if that tells you something!

On the fees front a good EA won't be able to do the job properly at a fee much lower than 1.5%, but there are some around me who will go down to 1% to get the business. However the theory is the quicker they are to negotiate their own fees the quicker they will want you (the seller) to negotiate your price. So 1.5% is going to get you a good agent, over 2% (for sole agency) is very much on the expensive side these days and around 1% i'd think they'd be relying on a very high turnover so would want to try and get you to take an offer as quickly as possible.

Hi Mildura, and welcome.

I would like to know what EAs in general think of this website? Is it widely known in the industry? Do many EAs post on here anomalously?

Also, do you get many buyers looking at the recent websites, such as houseprices.co.uk, which show what houses sold for? As these websites have only really been launched in the last year (or so).

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.