Choosing who to sell your property with is an important decision, but one that comes at a time when extra stress is the last thing you need. How can you make sure that you select an Estate Agent that will work hard to get you a sale and is not just trying to get you on their books to make their numbers look better? In this blog we will let you in on the tricks that some Estate Agents use and how you can stay one step ahead.
Trick 1 – Unrealistic Valuations
Many Estate Agents will claim to be able to sell your flat for a figure way above what you think it’s worth, only to leave you having to lower the asking price due to low demand once they have you tied in.
What should you do? Try to get a number of different valuations and do some quick research on recent sales of similar properties in your area to get a picture of the true market value of your property. This will help you see through misleading valuations and not be drawn in by false promises of unachievable prices.
Trick 2 – Unfair contracts
Nobody likes to read the small print but not doing so could lead to major issues when it comes to selling your property. If you come across the terms “sole selling rights” or “ready, willing and able purchaser” in your agent’s contract then you should put it down and find another agent. “Sole selling rights” means that even if you find a buyer yourself, you still have to pay the Estate Agent. Regardless of whether they’ve lifted a finger for you. “Ready, willing and able purchaser” means that if a buyer has been found and you initially agree to the sale, then you will have to pay the Estate Agent even if you need to pull out of the sale for whatever reason.
What should you do? Make sure you read any Estate Agency contract thoroughly before signing. A small amount of time reading could save you from a disaster later down the line. A sole agency agreement (not to be confused with sole selling rights) or a multiple agency agreement are the contracts you should be looking for. Given the growth of online property portals like Rightmove we would always recommend finding an agent you’re happy with and opting for sole agency but this is ultimately your decision as the client. Whilst multiple agency can sometimes mean more exposure, this tends to come with a considerably higher commission rate and cost to you which you have to bear in mind when looking for your next property.
Trick 3 – Underhand Ads
When looking for an Estate Agent with local knowledge, it’s very tempting to open up the Evening Standard and look for the agents with the most listings. They must know a lot about the area and work hard at marketing, right? Not necessarily. Nowadays the first place buyers look is online, not in the paper. Estate Agents know this yet some still advertise extensively in the paper, why? Because they know how you think. They want to give the impression of local knowledge and strong advertising presence to convince sellers like yourself not buyers. The costs of this advertising will be built in to their fee, so in effect you are paying them for advertising to you.
What should you do? You should let the Estate Agents convince you of their knowledge and expertise through your conversations with them not through their offline advertising presence. When deciding between agents, speak to friends and family about their experiences, and look online at review websites like allagents.co.uk. You may even want ask your prefered agent for a reference call with a prior customer to ensure you’re happy before you sign.
Trick 4 – Tying you in
Whilst there is nothing wrong with Sole Agency Agreements you should be wary of lengthy contracts as you could end up stranded with a poor estate agent. A long contract is beneficial for the Estate Agent not for you. They reduce their risk of a contract running out with no sale and losing the money they spent on marketing. This reduces their incentive to sell your property and could lead to your property sitting on the market for months. Likewise you should be wary if an agent asks for a deposit up front as this will only further reduce their incentive to sell your property quickly.
What should you do? Don’t be fooled by a slick pitch with little substance, get assurances of the level of service you will receive after you have signed the agreement. 6 to 12 weeks is best practice in London for Estate Agency contracts and anything longer should be negotiated down or avoided all together. You should also avoid paying anything up front and always agree that your agent is paid on completion. This is the norm in the industry and if your agent won’t offer these terms you may want to look elsewhere.
Trick 5 – Cheap fees, too good to be true?
Over the last few years there has been a growth in online estate agents offering enticing fixed fees of £500 – £1,000. This is a fraction of what you would pay at a traditional estate agent and especially attractive for higher value London properties. Whilst the headline price is attractive, many people will ask ”how can they afford this”? They will likely tell you that they save money by not paying for costly high street premises. Whilst this is a part of it, in reality they will often have to sacrifice service, and may hit you with additional fees down the line. For example making you pay extra for a personal account manager or charging you for an Energy Performance Certificate (EPC) which is a legal requirement for selling your property. In addition this headline fee often involves paying upfront which as we’ve previously mentioned, stacks the odds in the agent’s favour, not yours. Another common trick is to leave VAT out of the headline fee to appear cheaper. Any company selling to the public is legally required to display their prices inclusive of VAT. If your agent is looking to mislead you at this stage it’s a clear warning that you may want to use someone else.
What should you do? Don’t rule out low cost online agents, they can still work out considerably cheaper, but be aware that you are not going to receive a personal tailored service for £500. This is likely to mean your left doing a lot of the leg work and if they fail to secure the price you want as a result of a stripped-back service this may cancel out the money you’d have saved in the first place.