Monday, August 27, 2007

Some “honesty” from the EAs.

House prices have suffered negative impact of recent interest rate rises

It was also revealed that 61% agents had experienced a sharp drop in the number of house hunters on their books following the latest rise.

Posted by mr crabs @ 10:54 PM (511 views)
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One thought on “Some “honesty” from the EAs.

  • Fulhamfrankie says:

    Why we should never think of Estate Agents collectively as honest –
    NAEA president, Stewart Lilly, comments: “it will provide much needed comfort to house hunters who have been grappling with the effects of the past three rises this year”. Estate agents “should” be working on behalf of the seller so their comments on the hardships of the buyer should be seen in context. First, with the obvious exception of the good ones who perform an honest brokers service (I know, hard to believe but people are inherently good, if misguided/sheep at times), estate agents love changes in market prices. Increases drive the speculators and opportunistic buyers in the market and push up activity, hence commissions. Decreases sees investments and foreclosures being off-loaded and quick sales, hence commissions.
    Which leads me to my second statement, although the Estate Agent should be working for the buyer, a static market will subdue much of the demand/commissions and will force approximately half of your 10ish estate agents on the high street to close. They do not want a static market so look forward to increasing messages from Estate Agents about sellers being more realistic with their asking prices.
    Who do Estate Agents represent? Themselves. If Estate Agents could have a period of rapid growth, followed by a massive crash to reset prices followed by a period of rapid growth etc, they would bite off your hand (It seems many do already). Now the smart people would think that the general populous would learn from their mistakes and the second rapid rise would never happen but…….never underestimate the power of the media/talking heads and the power of herd mentality.

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