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Selling Your property?

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

There are at least three main techniques widely used by estate agents that sellers must be watching out for – the sucker sign up, the cost-slash and the slash-and-grab.

1. The sucker sign-up

The basis for the success of any estate agency 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 demonstrated that most of us consider our dwellings to be worth more than they actually are. Because we have lived in them and decorated them in a sense that suits us, we’re frequently emotionally attached to them. We likely believe our daring colour scheme, modern open-plan living area, ‘original feature’ fireplace or ‘designer’ toilet are the height of practicality and great taste and would entrance any potential purchaser. But on viewing our homes that are precious, many buyers’ first thought may be they can gut the place and replace our execrable decorations with something better suited to their preferences and lifestyle.

This can pose a problem for estate agents. So, when pitching as sellers for our business, most brokers will flatter us by commending our home, attempt to sound us out over how much we believe then claim they can easily meet or surpass our price anticipations and our property may be worth. This frequently results in our homes being overvalued by them.

Besides the another common tactic agents utilize to get us to hire them is the buyer that is phantom. As we’re showing them round our home, they will probably tell us that they’ve recently been contacted by one or several buyers that are looking to get a property just like ours. To demand ours even more, the broker may phone his office in our existence, supposedly to check these buyers remain in the marketplace. Invariably his office will confirm that there are bus loads of eager buyers pantingly eager to see our property. The message of the broker is going to be clear – if we do not sign up with them fast, then we’ll miss the chance of a fast sale at a good price. A couple of days after we’ve signed, when the promised buyers seem to have mysteriously vanished into thin air, it is possible for the broker to tell us that the buyers have located someplace else or altered their minds or for the broker to give us some other cock-and-bull story to spell out the buyers’ astonishingly quick disappearance.

2. The price-slash

It’s not rather unlikely that your broker may have overvalued your property as a way to get you to sign with them. So, unless industry is unusually buoyant or unless they’re lucky enough to locate a buyer with more money than sense, once they begin actively promoting your property, they will most likely have to soften you up to the prospect of accepting a lower cost than they had originally suggested.

Many sellers assume that it’s in the broker’s interest to get the very best cost possible. But this just is not the situation. Let’s we presume you’ve got a Sole Agency agreement using a selling fee of 1.5%. If you’re trying to find say GBP285,000, the estate agency will earn GBP4,275 and the individual broker perhaps 10% of that – GBP427. The bureau will pocket the representative GBP397 and GBP3,975 in the event the broker manages to convince one to accept an offer of GBP265,000. While GBP20,000 drops, the agency only loses the agent GBP30 and GBP300. Some clever agents may even get you to agree a fixed fee of 1.5% of the asking price, so that when they after convince you to accept a lower offer, their percentage remains gloriously intact.

Getting your price to drop is generally relatively simple. Although the broker could have originally been highly complimentary about your home, they tell you they have had several buyers see not all the feedback and the property has been as positive as they’d expected. The broker could even inform you that after you’d signed up, they unexpectedly got several other similar properties on the agency’s books and that they all sold amazingly fast as they were more ‘competitively priced’. Or the agent might claim that there have been a few offers on your home which were much below your asking price. But whatever tactics are used, most sellers can immediately be persuaded to drop their cost down to the level the broker had always known they’d get.

The perfect scenario for the agent is when a client signs an Exclusive Agency agreement giving that broker exclusive rights to sell the property for an established interval. This puts the agent under less pressure to market the property because, for as long as it is shifted by them during the contract period, they’ll get their commission. Less valuable for the broker is a Multiple Agency agreement where the seller’s property is put by they with several agents. Having a Multiple Agency scenario, there are two common scenarios which could develop. You could find that each broker will do less work to market your property for sale Totteridge property as they know it’s likely another broker can get the fee and the sale. They therefore focus their efforts on properties where they’ve Sole Service and attempt to shove buyers towards these properties. Or else there might be a frenetic race as each agent attempts to get you to take any offers they receive. In this case, they may feel an even greater need to convince you to accept a price-slash and you’ll get bombarded with broker calls all suggesting what amazing buyers they have ready to take your property if only you will show some flexibility on price. It is only afterwards, after you have accepted an offer and withdrawn your property from other agents, that you figure out the buyer had not been quite as solid as was suggested – they may be in a chain attempting to sell their property, or might not have the finance fully organised or may be unable to complete as quickly as you had believed. But by then it’s generally too late to improve your mind and return to other brokers.

3. The slash-and-catch

The most fiscally damaging scenario to get a seller is when an agent decides they can earn a lot of cash for themselves by getting you to sell your home at an attractively low price to somebody who’s in fact among the broker’s company contacts, friends or loved ones. This slashing your cost and grabbing your home could be quite straightforward as when the broker manages to convince one to accept a low offer from among their associates and they subsequently resell your property for a healthy profit netting the agent maybe GBP10,000 to GBP20,000 or more for merely a few hours work.

A more sophisticated variant of the scam is when you have house which should be modernised or a flat or a house which could be split up into flats. Here the agent might have a relationship using a developer. The deal will usually be that the broker alerts the developer to the opportunity, encourages one to accept the programmer’s offer (while claiming your home is going into a private buyer) and gets a bung in the programmer. This bung is well known in the trade as a ‘drink’ and can generally range depending on the profit made by the programmer. In order to motivate one to sell at below market value, offers may be withheld by the broker from actual buyers or get friends to put in low offers to drive you towards a price-slash.

The Internet has made the slash-and-grab similar properties that were slightly more difficult by providing sellers with quick accessibility to advice regarding the costs have attained. However, the slash-and-grab works an absolute treat with older, perhaps more vulnerable sellers who may be downsizing- moving into a bungalow and selling off a bigger family dwelling or level after their kids left home and have grown up. These sellers make easy targets because, whenever they have lived in a house for quite some time, they may have bought it to get a five-figure sum – maybe GBP40,000 or GBP50,000. So when home sellers and buyers get a six-figure offer like GBP350,000, they will consider they’re already making a huge profit and may feel uneasy about pushing for more. Additionally, frequently such sellers will usually not have thought concerning the worthiness of their properties if converted into flats and so can be fooled by the agent into just comparing the price offered to that paid for other similar family homes, which will usually be drastically significantly less than the worth when converted into flats. This scam hit the headlines in 2009 when an agent was found to have convinced a seller to accept GBP2.9 million for a property which had a value as a development of nearer GBP10 million. Nevertheless, it occurs on my road – to ordinary folks all of the time a retired couple sold their 3-floor end-of-terrace house for around GBP385,000.