If you’re thinking of selling your house you need to read this first!
I’m going to cover the tips and tricks you need to know and avoid when using an estate agent to sell your home or investment property. I’m going to dive into the difference between sole agency and multi-agency, whether you should sign a long or short-term contract and discuss the advantages and disadvantages, fees and advertising of high street agents vs online agents.
Okay, so first off, don’t be fooled into signing a long-term sole agency contract with an agent as generally, these tend to be 6-12 months long, they’ll charge you upfront and they’ll tell you that you have to sign the contract to go on the market with them, but you absolutely do not.
You do not want to be tied into contact with an agent who’s not performing and doing what you’ve asked. Make sure you’ve got the flexibility to be able to move agents but also remember that it’s not a good idea to advertise with two different agents at the same time because when you instruct multiple agents, neither agent will do as much or spend as much on advertising your property.
Agents aren’t going to spend money on marketing your property, only to lose the sale to the other agent so the trick is to list your property on the market with one agent at a time but not in a sole-agency contract so that you can leave if you’re not satisfied with how your property is selling.
Now, moving onto fees and costs. It’s mainly online agents but some estate agents will try to charge you upfront and it is generally the high street agents that will attempt to tie you into a long-term contract but charge you a fee for the sale only when the property sale completes.
Online agents will entice you into a contract but charging a fraction of the costs high street agents charge, usually, they will charge £600-£700 upfront whereas high street agents will charge 1-1.5% around £1,500. So online agents entice you in with the lower fees but by charging fees upfront, this means they have no incentive to sell your home, no incentive to advertise your home and no incentive to do viewings as you’ve already paid them.
And when we speak to the vendors (homeowners) who have tried to sell their home through an online agent, they’re very often disheartened with the whole process. They feel they’ve spent money and they’ve got nothing for it and now they can’t afford to go to the high street agent.
But what we can do in these situations is secure and negotiate creative deals such as no money down type strategies where the owner gets the price they’re looking for and we get the opportunity to control and own that property over a period of time. These type of creative property investment strategies work really well when you’re looking at deals that are on with online agents.
Okay, so if you’re trying to sell a property and you’re struggling to secure a sale then perhaps you need to change your tactics. Maybe you need to change your agents? Quite often when a home isn’t selling what the agents will do is tell you that they can do extra advertising for you If you pay them some more money.
But here’s the question you should be asking yourself. You’ve hired them to sell your home. Why are they not doing all the advertising they possibly can to get your home sold in the first place?
So if you’re selling a property, it’s always a good idea to agree a fixed flat rate fee with the agent plus commission and the commission will be based on how quickly they can find you a buyer plus our how high of a price they can achieve for the property. This way the agent can earn an extra commission when selling the property within a certain period of time or for selling over and above a certain price.
Don’t fall for estate agents telling you that their fees are fixed, the fees are never fixed and you must always negotiate and haggle with them to get your fees structured in a way that you want them structured. Now, I’m not saying that you need to haggle with them so that they sell your house on the cheap. We want to pay the agents and we want to pay the agents well, but we want to pay them for doing the job that we want them to do for us.
So, structure the fees with an initial payment and then commission on how quickly they sell it and for what price they sell it for. This way it means that you’ve now got the agent working for their fee and quite often I’ll give them a bonus payment at the end when the sale completes and they’ll know about it up front to give them that extra incentive, you can give gift your agents a bottle of champagne, bring them some chocolates or a day out at the races, always have something extra because remember, you’re not just going to be selling one house with them over your lifetime as a professional property investor, you’ll be selling and buying a number of properties through the agents in your area so you need to look after them and make sure that they’re paid well, but don’t pay them well for not doing the job that you want them to do for you.