red Posted August 2, 2008 Share Posted August 2, 2008 http://www.guardian.co.uk/money/2008/aug/0...prices.property "Estate agents are clearly suffering along with their clients, with offices reported to be closing at a rate of more than 100 a week. With less than one in five properties selling and with an average cost of marketing at around £300 there will be many more who will be unable to continue to trade." After years of ramping the EAs can't/won't get vendors to cut prices and are going under. Oh dear... ... Quote Link to comment Share on other sites More sharing options...
Alfie Moon Posted August 2, 2008 Share Posted August 2, 2008 (edited) It doesn't surprise me .... there are still plenty of Estate Agents out there operating their (the market is booming) business strategy of concentrating their efforts of getting as many properties on their books as possible (via high valuations, etc.) whilst doing virtually no active selling (including turning away 'cheeky offer' people). In a rising/booming market this works well because the selling part of the equation looks after itself - as long as you can get property on the books it will sell. If you turn away a potential buyer another one will appear within a few days. In a falling market you have to concentrate the vast majority of your efforts on the 'selling' side of the business - to generate the turn-over and income. However, to do this successfully you have to have 'selling' skills. The vast majority of current Estate Agents don't have these skills - haven't needed them for the last 10 years. Combined with the 'selling skills' they need to go with the reality of the market and talk prices down with vendors and work positively with offers of -30%, etc. All this is 'the bleeding obvious'! - but not to many Estate Agents, and probably not to significant numbers of vendors. There are probably large numbers of Estate Agents sitting in their offices scratching their heads asking - why aren't we getting the same numbers of sales that we did last year? It's the fault of the media!!! We'll just have to enforce our business strategy even more to get sales up - and be really strict with buyers. If they don't play properly we'll just turn them away!! That will teach them that they will just have to pay 9 or 10 times average income for an average house. If we stick to our guns they will just capitulate and pay the prices we want for properties! Etc., etc. Estate Agents .... it's time to change your business strategy! Throw out the useless, pointless strategies that work in rising/booming markets and work positively with the falling market that is now the reality of the prUK property market (eg talk prices down, work positively to get a transaction from 'cheeky' offers, concentrate more energy on the selling end of the business rather than just trying to get as many properties on your books as possible and assuming that they will sell themselves, etc., etc.). The Estate Agents that don't adapt to the new reality are the ones that will go out of business first (and that can happen very quickly!). Edited August 2, 2008 by Alfie Moon Quote Link to comment Share on other sites More sharing options...
Guest sillybear2 Posted August 2, 2008 Share Posted August 2, 2008 Agents and vendors are all drowning in da Nile. Quote Link to comment Share on other sites More sharing options...
Leonard Hatred Posted August 2, 2008 Share Posted August 2, 2008 Maybe the EAs are just sitting around in their offices all day thinking, "it doesn't matter if we don't sell anything - it's different this time." Quote Link to comment Share on other sites More sharing options...
Dunroamin' Posted August 2, 2008 Share Posted August 2, 2008 The more expereienced agents seem to have the right idea......if a proceedable buyer walks into you shop "don't let them leave" show them everything have that might interest them and give them guidance on which of the vendors is prepared to be "realisitic on price". We were househnting recently and a couuple of agents seem to have got the picture, treated us like customers. Most of the others still had the "sneer at the buyers" mentalit. Quote Link to comment Share on other sites More sharing options...
Alfie Moon Posted August 2, 2008 Share Posted August 2, 2008 (edited) I find that there are more vendors than Estate Agents who acknowledge the dire state of the market, including that prices are falling .... but quite a % of these vendors can't bring themselves to bring the asking price down. Whilst there are Estate Agents out there, once you build up some rapport, who admit that the market is being decimated in front of their eyes others are still (as I say above) trying to implement their 'the market is booming' business strategies - and all the more strictly if faced with potential buyers that are passing in significantly low (but reflecting the reality of the market) offers. Some seem to be convinced that if they hold their ground the market will stabilise and then continue its ever upward trajectory. Words such as deluded, daft, stupid, etc. are all applicable here. These Estate Agents are in effect committing business suicide by not adapting to the new market reality. Some Estate Agents are doing a very good impersonation of King Canute - ordering the tide of falling prices to go back. Yep, absolutely deluded! Edited August 2, 2008 by Alfie Moon Quote Link to comment Share on other sites More sharing options...
Guest Winnie Posted August 2, 2008 Share Posted August 2, 2008 The more expereienced agents seem to have the right idea......if a proceedable buyer walks into you shop "don't let them leave" show them everything have that might interest them and give them guidance on which of the vendors is prepared to be "realisitic on price".We were househnting recently and a couuple of agents seem to have got the picture, treated us like customers. Most of the others still had the "sneer at the buyers" mentalit. So right. Just like the Porsche car salesmen - you couldn't afford this.......etc. Unfortunately it all boils down to the fact that the business rejects become EAs........... there is just nothing between their ears so they cannot understand cause and effect, just bull........ Quote Link to comment Share on other sites More sharing options...
1800s Posted August 2, 2008 Share Posted August 2, 2008 (edited) It doesn't surprise me .... there are still plenty of Estate Agents out there operating their (the market is booming) business strategy of concentrating their efforts of getting as many properties on their books as possible (via high valuations, etc.) whilst doing virtually no active selling (including turning away 'cheeky offer' people). In a rising/booming market this works well because the selling part of the equation looks after itself - as long as you can get property on the books it will sell. If you turn away a potential buyer another one will appear within a few days. In a falling market you have to concentrate the vast majority of your efforts on the 'selling' side of the business - to generate the turn-over and income. However, to do this successfully you have to have 'selling' skills. The vast majority of current Estate Agents don't have these skills - haven't needed them for the last 10 years. Combined with the 'selling skills' they need to go with the reality of the market and talk prices down with vendors and work positively with offers of -30%, etc.All this is 'the bleeding obvious'! - but not to many Estate Agents, and probably not to significant numbers of vendors. There are probably large numbers of Estate Agents sitting in their offices scratching their heads asking - why aren't we getting the same numbers of sales that we did last year? It's the fault of the media!!! We'll just have to enforce our business strategy even more to get sales up - and be really strict with buyers. If they don't play properly we'll just turn them away!! That will teach them that they will just have to pay 9 or 10 times average income for an average house. If we stick to our guns they will just capitulate and pay the prices we want for properties! Etc., etc. Estate Agents .... it's time to change your business strategy! Throw out the useless, pointless strategies that work in rising/booming markets and work positively with the falling market that is now the reality of the prUK property market (eg talk prices down, work positively to get a transaction from 'cheeky' offers, concentrate more energy on the selling end of the business rather than just trying to get as many properties on your books as possible and assuming that they will sell themselves, etc., etc.). The Estate Agents that don't adapt to the new reality are the ones that will go out of business first (and that can happen very quickly!). It's about time people started getting wise to the fact that estate agents were and are still overvalueing properties. I wrote an article trying to emphasise this and was jumped on. people trying to twist what they wanted to read and making out i was ripping off my family by the armchair mechanic gang. Estate agents need to get together and then demand all house sellers to drop their prices by around 20% or leave the market. Then sit back and see what happens. If that fails do it again and lets get on with getting houses back to where they should be Edited August 2, 2008 by 1800s Quote Link to comment Share on other sites More sharing options...
dryrot Posted August 2, 2008 Share Posted August 2, 2008 Maybe the EAs are just sitting around in their offices all day thinking, "it doesn't matter if we don't sell anything - it's different this time." Or EAs will be OK, as long as they are "in it for the long-term"? Quote Link to comment Share on other sites More sharing options...
bobthe~ Posted August 2, 2008 Share Posted August 2, 2008 It's about time people started getting wise to the fact that estate agents were and are still overvalueing properties. I wrote an article trying to emphasise this and was jumped on. people trying to twist what they wanted to read and making out i was ripping off my family by the armchair mechanic gang. Estate agents need to get together and then demand all house sellers to drop their prices by around 20% or leave the market. Then sit back and see what happens. If that fails do it again and lets get on with getting houses back to where they should be The other alternative is to say to a vendor: I don't think it is worth x, I think it is worth 20% less in today's market. If you want to put it on with me for x, then cough up 300 quid for us to do the marketing. If they all did that, it wouldn't take long for the punter to see the light. Athough personally I blame HIPs and Stamp duty as well as the media.* *These may or may not be the genuine personal opinion of the poster Quote Link to comment Share on other sites More sharing options...
Guest sillybear2 Posted August 2, 2008 Share Posted August 2, 2008 (edited) The problem is quite clear, as is the solution, but agents are quite thick so they need things set out in black and white :- ====================================== House Prices ====================================== ====================================== Ability to borrow ====================================== No amount of denial is going to solve this problem. Banks only finance loans with decent underwriting standards, 10% deposit, x3.5 income, proof of earnings etc. Basing prices on last years silly liar loans is pure delusion. You can hope for the best and paint the whole world magnolia but it still wouldn't bridge this gap. Edited August 2, 2008 by sillybear2 Quote Link to comment Share on other sites More sharing options...
dryrot Posted August 2, 2008 Share Posted August 2, 2008 http://www.guardian.co.uk/money/2008/aug/0...prices.propertyOh dear... Noted... "In June last year, 105,000 properties sold in England and Wales, a drop of 15% from the year before. But so far this June, the registry has recorded just 17,681 sales..." If the average stamp duty was £2k, that's a loss to the Gummint of ~£200million in one month alone... Quote Link to comment Share on other sites More sharing options...
Dave Spart Posted August 2, 2008 Share Posted August 2, 2008 As General Secretary for the People's HPC Front I call for an all-out buyers strike throughout which we shall chant "We Shall Not Be Moved" Who's for seconding the motion? Quote Link to comment Share on other sites More sharing options...
Dave Spart Posted August 2, 2008 Share Posted August 2, 2008 (edited) PS I'm also the General Secretary for the HPC People's Front too and they'll be joining with us, comrades. Edited August 2, 2008 by Dave Spart Quote Link to comment Share on other sites More sharing options...
Dave Spart Posted August 2, 2008 Share Posted August 2, 2008 With news of so many Estate Agents going out of business shares in Hair Gel suppliers slid. Quote Link to comment Share on other sites More sharing options...
Alfie Moon Posted August 2, 2008 Share Posted August 2, 2008 Going by the available data it would seem that the vast majority of the country are participating in the 'strike' action with only a very small number of people crossing the picket line. Quote Link to comment Share on other sites More sharing options...
red Posted August 2, 2008 Author Share Posted August 2, 2008 I wonder also how many EAs would go to the wall if it wasn't for the lettings side of their business... I know for a FACT this is the case with two EAs I have spoken to recently in London. Quote Link to comment Share on other sites More sharing options...
Flatdog Posted August 2, 2008 Share Posted August 2, 2008 The other alternative is to say to a vendor:I don't think it is worth x, I think it is worth 20% less in today's market. If you want to put it on with me for x, then cough up 300 quid for us to do the marketing. If they all did that, it wouldn't take long for the punter to see the light. Athough personally I blame HIPs and Stamp duty as well as the media.* *These may or may not be the genuine personal opinion of the poster BBC 1 news today reports that a substantial number of houses are being marketed without a HIP. Interesting to witness a legal requirement being blatantly disregarded in such a highly regulated industry. Could this be the beginning of the end for HIPs?....or am I dreamin'? Quote Link to comment Share on other sites More sharing options...
Leonard Hatred Posted August 2, 2008 Share Posted August 2, 2008 My mum just said she's seen an EA with a sign in their window saying, "try an offer - our vendors are realistic" Quote Link to comment Share on other sites More sharing options...
Sinking Feeling Posted August 2, 2008 Share Posted August 2, 2008 But Nationwide says the low level of sales may be because there are few forced sales. "It may be due to the reluctance of sellers to accept lower offers," says Fionnuala Earley, Nationwide's chief economist. "While this does little for liquidity in the housing market, it does indicate that sellers are largely not in a position where they are forced to sell." So I guess we can conclude that there will be much bigger falls to come when buyers get to the point of being forced to sell. Quote Link to comment Share on other sites More sharing options...
Fudge Posted August 2, 2008 Share Posted August 2, 2008 A friend of mine put his house up for sale a month ago. He actually asked me for advice and I said to put it up for a low price and sell it quick. He agreed. Couple of weeks later he told me thats what he tried to do but the estate agent advised him against it and put the price up. The EA actually put the house on Rightmove for more than he had told my friend they would. The result a month on, no sale. I don't know how typical this is but this EA was ******ing stupid, he had a seller who was willing to sell it cheap for a quick sale and missed an opportunity to make a quick sale. Now they are going to have to chase the market down along with all the other mugs and once the property has been on the market for a few months it starts to look like there's something wrong with it. Quote Link to comment Share on other sites More sharing options...
wonderpup Posted August 2, 2008 Share Posted August 2, 2008 I wonder also how many EAs would go to the wall if it wasn't for the lettings side of their business...I know for a FACT this is the case with two EAs I have spoken to recently in London. I wonder if this will put more pressure on landlords to keep rents affordable? I think in general it must be difficult for younger EA's, who have only known a booming market to make the psychological adjustment to world where buyers have the upper hand rather than sellers. In my own dealings with them I have come across a lot of arrogance and a fairly dimissive attitude to would be buyers in the past- I guess these attitudes will take time to shift. Quote Link to comment Share on other sites More sharing options...
Guest happy? Posted August 2, 2008 Share Posted August 2, 2008 Today's Telegraph carries an article by Tracy Corrigan where she identifies that 25% of last year's mortgage market was made up from mortgage-backed securities. That market has now imploded. It seems logical that without that fantasy market property prices as a minimum must fall by the value of that market. However, if you consider that monies which may otherwise have been available for lending were diverted elsewhere the fall it likely to be considerably higher. The difficulty for property professionals is that no-one now knows what the new norm is. You can see just how difficult it is to gauge the proper level of the market most readily at auction. The universal tale at auction is that something like 70% of properties simply aren't achieving their reserve. An HPC free-market simpleton who has learnt his catechism will chant that's because they've over-priced the property. This is brilliantly simple in its analysis but also fundamentally useless - as the market collapses sentiment has yet to catch-up with the new reality. Good estate agents recognise this already, many of their customers may not - their dilemma appears to be - do you price realistically and stand no chance of getting any business or overvalue knowing you incur a cost on a product you can't shift. Quote Link to comment Share on other sites More sharing options...
kevla22 Posted August 2, 2008 Share Posted August 2, 2008 (edited) I deal with estate agents on a daily basis and I cannot believe how many are STILL pricing at or above highs last year to "get business", not sure how they can call this "getting business" when none of the properties sell! I probably deal with around 20-30 estate agents on a regular basis and I kid you not when I say that only around 5 of them are pricing correctly and encouraging offers, surprise surprise they are actually doing OK, not great obviously but still selling at around 50% of transaction levels seen last year. The other thing that strikes me is estate agents complaining to me because "vendors won't drop their prices" , hardly a surprise when the estate agent has convinced them their house is worth more than it really is! Many vendors are also a problem, still believing that their home is immune from the downturn, i have heard so many people say "it won't affect us" because of X, Y & Z. The experienced estate agents I deal with (all independent guys, not corporate monkeys) have all said that in the 90's houses were still selling just at lower price levels whereas now people just won't accept the market and thins have stagnated. Until people start to be realistic things will only get worse, mortgage market has apparently improved of late according to brokers (taken with a pinch of salt of course) and they are argueing that this can no longer can be used an excuse for the current market conditions as anyone with good credit and 5% deposit can get a mortgage, the issue is and will continue to be price" Another very worrying subject is people coming off fixed rate deals, many are trying to sell as they can't keep up with the payments and despite explaining the situation to the agent they are still overpricing, 6 months down the line and these people are getting repossessed and loosing everything! Crazy really as if people get advice it is always possible to negotiate with lenders to work things out, thing is many people seem to be throwing in the towel which seems a shame to me. Edited August 2, 2008 by kevla22 Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted August 2, 2008 Share Posted August 2, 2008 Nobody ever talked about my suffering in real terms when I was unable to buy (except the govt who offered me partial ownership as a solution you can't afford a whole house -why not just buy a bit? I mean property prices had reached their natural levels for the middle class voters who were wallowing in house value mania? The rest of us scum could settle for a bit of a house.) Why should I now worry about the suffering of sellers who got a whole house at a ridiculous price to support the middle class illusion of wealth. Quote Link to comment Share on other sites More sharing options...
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