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February 23 2015


Selling Your house?

Selling Your property? Watch Out For These Estate Agents' Tricks

It is the first of three posts warning house sellers and buyers concerning the tricks estate agents utilize to get your hard earned money and also that will help you avoid being fleeced by your estate agent.

There are at least three principal techniques commonly used by estate agents that sellers should be watching out for - the sucker sign up, the price-slash and the slash-and-catch.

1. The sucker signup

The basis for any estate agency's success is clearly to encourage the most variety of sellers to sign with that agency rather than with their many usually look alike adversaries. Research has repeatedly shown that most folks believe our houses to be worth more than they actually are. Because we decorated them in a sense that satisfies us and have lived in them, we're often emotionally attached to them. We likely believe our bold colour scheme, modern open-plan living area, 'original attribute' hearth 'designer' lavatory will be the height of practicality and great taste and would entrance any prospective purchaser. But on seeing our dwellings that are cherished, many buyers' first idea may be they could gut the place and replace our execrable decorations with something better suited to their own preferences and lifestyle.

This may present a problem for estate agents. When they're brutally honest with us about our dwelling's (commonly lack of) attractiveness and give us a realistic selling price, then we're likely to get fairly grumpy and award our business to a different broker who is more complimentary about our tastes and much more optimistic about how much we can sell for. So, when pitching for our company as sellers, we will be flattered by most agents by commending our home, attempt to sound out us we believe our property may be worth and then claim they can certainly match or exceed our price anticipations. This frequently results in our houses being overvalued by them. However, the agent understands that once we sign up with them, have located a brand new dwelling, have emotionally already moved into our new house and are under fiscal pressure to sell our existing property, it's easy to coerce us into accepting a lower cost than we had initially been led to anticipate.

Along with the another common tactic agents utilize to get us to hire them is the phantom buyer. They will probably tell us that they've recently been contacted by one or several buyers who are looking to get a property simply like ours, as we're showing them round our house. To force ours even more, the agent may phone his office in our existence, purportedly to check that these buyers continue to be in the market. Invariably his office will confirm there are busloads of eager buyers pantingly eager to find our property. The message of the agent will be clear - then we'll miss the opportunity of a sale that is fast at a great price if we don't sign up with them immediately.

2. The price-slash

It is rather likely your agent may have overvalued your property so as http://www.statons.com to get you to sign with them.

Many sellers presume that it's in the broker's interest to get the best cost possible. But this just is not the situation. Let's we presume you have a Sole Agency agreement using a selling fee of 1.5%. If you're looking for say GBP285,000, the estate service will make GBP4,275 and the individual broker maybe - GBP427. The agency will pocket GBP3,975 and the representative GBP397 in case the broker manages to convince one to take an offer of GBP265,000. So while GBP20,000 drops, the bureau only loses the agent GBP30 and GBP300.

Getting one to drop your cost is normally relatively easy. They tell you they've had several buyers see the property rather than all the feedback has been as favorable as they had anticipated even though the broker may have initially been highly complimentary about your house. The exceptional transport links may unexpectedly turn into a concern because of a lot of traffic and congestion; your substantial garden, which had been such a huge selling point, might pose a problem for the type of busy young professional couples who would be in the marketplace for a home like yours; your exceptionally creative colour scheme, which the representative had so admired, might well have put off buyers searching for a more impartial decor and so forth. The broker could even let you know that just after you'd signed up, they surprisingly got several other similar properties on the novels of the agency and that they sold incredibly fast as they were more 'competitively priced'. Or the agent might assert that there have been a few offers on your house which were considerably below your asking price. But whatever strategies are utilized, most sellers can quickly be persuaded to drop their cost down to the level the broker had always known they'd get.

The ideal situation for the agent is when a customer signs an Exclusive Agency agreement giving that agent exclusive rights to sell the property for an established period. This gets the broker under less pressure to sell the property because, for as long as it is shifted by them during the contract period, they'll get their commission. With a Multiple Agency scenario, there are two common scenarios which could develop. You may see that every broker will do less work as they know it's likely another agent can get the sale as well as the fee to market your property. The thus concentrate their efforts on properties where they try to shove on buyers and have Sole Agency. Or else a frenetic race can be as each agent tries to get one to accept any offers they receive. In this case, they may feel an even greater need to convince you to accept a cost-slash and you will find yourself bombarded with agent calls all telling you what amazing buyers they've ready to take your property if only you'll reveal some flexibility on cost. It's only later, as soon as you have accepted an offer and withdrawn your property from other brokers, that you determine the buyer wasn't quite as solid as was proposed - they could be in a chain attempting to sell their property, or may not have the finance totally organised or may be unable to complete as quickly as you'd considered. But by then it is generally too late to modify your mind and go back to other brokers.

3. The slash-and-catch

The most fiscally damaging scenario to get a seller is when an agent determines they can create a lot of cash for themselves by inducing you to sell your property at an attractively low price to a person who is actually one of the broker's company contacts, friends or family. This slashing your price and grabbing your home might be somewhat clear-cut as when the broker manages to convince you to accept a low offer from among their associates plus they subsequently resell your property for a strong gain netting the agent maybe GBP10,000 to GBP20,000 or more for just a few hours work.

A more advanced variant of the scam is when you have house which should be modernised or a flat or a house that may be split up into flats. Here the broker could have a connection using a programmer. The deal will usually be that the broker alerts the programmer to the chance, motivates you to accept the offer of the programmer (while asserting your property is going to a private buyer) and gets a bung from the developer. This bung is known in the trade as a 'drink' and can generally range from GBP5,000 to GBP10,000 per price based on the profit made by the programmer.

The net has made the slash-and-catch slightly more challenging by providing sellers with quick access to information about the prices similar properties have reached. However, the slash-and-grab works an absolute treat with older, maybe more exposed sellers who might be downsizing- selling off a bigger family home and moving to your bungalow or flat after their children have grown up and left home. These sellers make easy targets because, if they have lived in a house for many years, they may have bought it for a five-figure amount - GBP50,000 or maybe GBP40,000. So when older are given a six-figure offer they'll consider they are making a gigantic profit and may feel uncomfortable about pushing for more. Moreover, often such sellers will usually not have thought regarding the value of these properties if converted into flats and so may be tricked by the broker into just comparing the cost offered to that paid for other similar family dwellings, that will generally be drastically significantly less than the value when converted into flats. Nevertheless, it happens on my street - to average folks all the time a retired couple sold their 3-floor end-of-terrace house for around GBP385,000. Unknown it was bought by a partner in the estate agency which had managed the sale and sold as three self contained flats for almost GBP750,000 only a few months later after likely less than GBP50,000 had been spent on the conversion.

Tags: Estate Agents

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