7 things that an Estate Agent wont tell you


I have put a few points together to give you 7 things that an Estate Agent wont tell you!

New to the Market

This one single statement is open to a lot of interpretation.

How long is it being on the market with that particular agency? So has the property actually been on the market for six months and this agent has only just taken on market with themselves?

Has the property been on the example Rightmove say 48 hours but actually was removed from right move on the property portals 24 hours and then and then relisted to make it look like the property was new to the market?

Was the property on the market for a period time not selling for XY Z reason and therefore the agent ceased marketing it, waited for a week perhaps and then relisted the property?

Your the first ones to view the property?

Perhaps you are but maybe your the first with this particular negotiator from the office and his or her colleagues have already shown 10 other people through?

These are just some of the examples you may come across without a new to the market fresh property!

The Asking Price

Rarely is the Estate agent going to share with you the reason behind the asking price, I say very rarely as they were often point out that it's a bargain but many factors behind the asking price determined that number!

The valuer for example Will have targets to instruct new properties and often they are competing with other estate agents within the town/city so very easy way to get a new instruction is to simply inflate the price and promise to deliver a higher sale price than your competition.

Advertising as well it's great to have board presence This being the number of the For sale and sold boards within area. Sober winning a new instruction I'm getting another board within your area is give the business it's free advertising especially if you're a main arterial roads in and out of town this can often taint the asking price as the agent is more motivated to get that new instruction and therefore another board up in the street!

So always take the asking price is simply that is the price they asking for not necessarily the true value of the property!

Open Homes

So I am sure you have all seen them ! and heard the story that the owners want to not be disturbed with viewings in the evening or partner works away a lot etc etc so they have asked us to block the viewings together or run an open home!

This technique is a great way of putting all the interested parties and some not so interested around a property at the same time therefore creating a sense of urgency for those generally interested in the property to push an offer forward and often put higher offers in for fear of missing out to one the other people they meet looking around !!

We need to verify your offer with our financial advisor! ( the commission they receive from the FA!)

Interestingly enough you often simply receive a phone call asking your position, funding options etc ( but this is a great opportunity for the FA to try and sell you their own services!! funnily enough the agent seems to get a commission on the conversions of these!

Have you got your legal position in place? (The commission they receive from the Solicitors!)

Very much the same as the financial services!

Estate Agency Fees

Let's have a look at an example.

Say you're buying a house for £100,000, and the agency is charging a 2.5% fee, in this example the actual agency as in the company Will charge £2500 for selling this property.

For the actual negotiator as in the physical person in the office who is selling the property they will on average get nought .5% of this fee.

So in real financial terms that's £125 for selling the £100,000 house in commission.

So let's look at this as an example if we sell the same house for £90,000. The agency fee in this case is £2250 so 0.5% of this fee is £112.50 for selling the house in commission.

So what does that mean whilst the estate agent is technically working for the vendor who is therefore paying their commission for the house they are in fact only earning an extra £12.50 for achieving £10,000 more.

If you put this into real terms that the agent has to do more viewings may be the higher offer is coming from somebody dependent upon mortgage or first time buyer he may struggle to get a mortgage all they are reliant upon a chain and therefore need to sell a property before buying this one there are many ways that the sale can go wrong as opposed to saying to any investor who is experienced has funds in place and the ability to move forward on the sale quickly.

To fully high like this the commission is only paid upon completion on the sale of the property so by doing all of the extra work to sell the house for £10,000 more with a higher risk that the sale actually does not doesn't complete and falls through therefore resulting in no commission at all for the estate agent asked the question to you is that worth an extra £12.50?

Now these are based upon a 2.5% fee let's have a look in the example at 1.25% fee which is often more realistic case in today's marketplace. In this case everything is half so for the extra £10,000 achieved in the sale price the agent is earning £6.25 more for the extra work.

I think you can see the difference between being professional I'm building a strong relationship as a serious buyer an investor that the agents Will Look more favourably upon offers and working with you the necessary trying to achieve the highest price for the property.

In My Experience

So how much actual experience do they have! whilst some agents are very experienced knowledgeable and know the market place well, it is an industry which has a young a high turnover rate of staff! this often can result and especially in larger corporate firms in lower experience level.

So you may encounter agents giving you advice on resale and rental figures for the property that your looking at but actually have never worked in lettings or been through property cycles! also what is a good yield in their opinion may not be so to you as a more educated and experienced investor especially if they note that your not from the area!

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