Selling Your property? Watch Out For These Estate Agents' Tricks Selling Your house? This really is the first of three articles warning home sellers and buyers regarding the tricks estate agents utilize that will help you avoid being fleeced by your estate agent and to get your hard earned money. 1. The sucker sign-up The basis for just about any estate agency's success is obviously to encourage the utmost variety of sellers to sign with that service rather than with their adversaries that are many generally look alike. Studies have repeatedly shown that many of us consider our dwellings to be worth more than they really are. Because we decorated them in a sense that satisfies us and have lived in them, we're frequently emotionally attached to them. We likely believe our fearless colour scheme, modern open plan living area, 'first attribute' fireplace or 'designer' toilet would entrance any potential purchaser and would be the height of good taste and practicality. But on seeing our houses that are beloved, many buyers' first thought may be how they could gut the place and replace our decorations that are execrable with something better suited to their own preferences and lifestyle. This may present an issue for estate agents. So, when pitching as sellers for our business, most brokers will flatter us by commending our home, try and sound us out we feel then claim they can easily meet or exceed our price expectations and our property is worth. This often results in them overvaluing our homes. However, the agent understands that once we sign up with them, have located a new home, have emotionally already moved into our new house and are under fiscal pressure to market our existing property, it's simple to coerce us into accepting a reduced price than we had initially been led to anticipate. Along with the another common tactic agents use Brookmans Park estate agents to get us to hire them is the phantom buyer. As we're showing our house rounds, they will probably tell us that they have recently been contacted by one or several buyers who are looking to get a property just like ours. To demand ours even more, the agent may phone his office in our presence, purportedly to check these buyers continue to be in the marketplace. Always his office will affirm there are busloads of eager buyers all pantingly eager to see our property. The broker's message will be clear - if we do not sign up with the buyers quickly, then we'll miss the chance of a fast sale at a great cost. A few 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 describe the buyers' astonishingly rapid disappearance. 2. The cost-slash It's not rather unlikely your broker may have overvalued your property as a way to get you to sign with them. Many sellers presume that it is in the agent's interest to get the best price possible. But this simply isn't the case. Let's we assume you have a Sole Agency agreement with a selling fee of 1.5%. If you are seeking say GBP285,000, the estate agency will earn the individual broker and GBP4,275
perhaps - GBP427. The agency will pocket the representative GBP397 and GBP3,975 in the event the broker manages to convince one to accept an offer of GBP265,000. So while GBP20,000 drops, the bureau just loses the broker GBP30 and GBP300. Some intelligent agents might even get you to agree a fixed fee of 1.5% of the asking price, so that when they later convince you to accept a lower offer, their commission remains gloriously complete. Getting one to drop your price is usually relatively simple. They tell you they've had several buyers view the property instead of all the feedback continues to be as positive as they had anticipated though the agent may have initially been highly complimentary about your home. The agent may even inform you that after you had signed up, they unexpectedly got several other similar properties on the publications of the service and that they all sold amazingly fast as they were more 'competitively priced'. Or the broker might assert that there have been a few offers to your dwelling which were substantially below your asking price. But whatever tactics are used, most sellers can quickly be persuaded to drop their cost right down to the amount the broker had always known they would get. The ideal situation for the agent is when a customer signs a Sole Agency agreement giving exclusive rights to that agent to sell the property for an established period. This puts the agent under less pressure to market the property because, for as long as they change it during the contract period, they'll get their commission. Less advantageous for the agent is a Multiple Agency agreement where the seller places their property with several agents. This sets up a race between agencies as to who gets the sale as well as the commission, meaning several agencies may do rather lots of work but miss out on bringing in any cash - not something likely to be valued by the service supervisor. Having a Multiple Bureau scenario, there are two common scenarios which could develop. You could find that each agent will do less work to market your property as the understand it's likely another broker will get the sale along with the percentage. The therefore focus their efforts on properties where they have Sole Agency and attempt to shove buyers towards these properties. Or else there could be a frenetic race as each agent attempts to get you to accept any offers the receive. In this case, they may feel an even greater need to convince you to accept a price-slash and also you'll find yourself bombarded with broker calls all suggesting what excellent buyers they've ready to take your property if only you will show some flexibility on price. It's just later, as soon as you have accepted an offer and removed your property from other brokers, which you find out the buyer wasn't quite as solid as was suggested - they might maintain a chain trying to sell their property, or might not have the finance completely organised or might be unable to complete as rapidly as you had considered. But by then it's normally too late to change your mind and return to other agents. 3. The slash-and-grab The most fiscally damaging situation to get a seller is when an agent determines that they can earn plenty of money for themselves by getting one to sell your home at an attractively low price to an individual who's actually among the agent's company contacts, friends or relatives. This slashing your price and grabbing your house might be quite clear-cut as when the agent manages to convince one to accept a low offer from among their associates plus they then resell your property to get a strong gain netting the broker perhaps GBP10,000 to GBP20,000 or more for merely a few hours work.
A more advanced variant of this scam is when you have a house that may be split up into flats or house which needs to be modernised or a flat. Here the broker could have a connection using a programmer. The deal will typically be that the agent alerts the programmer to the chance, encourages the offer of the programmer to be accepted by you (while asserting your property is going to a private buyer) and then gets a bung from the programmer. This bung is well known in the trade as a 'drink' and can generally range from GBP5,000 to GBP10,000 per bargain according to the gain made by the programmer. So as to encourage you to sell at below market value, the broker may withhold offers from genuine buyers or get friends to place in low offers to drive you towards a price-slash. The web has made the slash-and-grab similar properties that were marginally more difficult by providing sellers with easy access to advice about the costs have realized. But, the slash-and-catch works an absolute treat with older, perhaps more exposed sellers who might be downsizing- moving to a bungalow and selling off a bigger family dwelling or flat after their kids have grown up and left home. These sellers make easy targets because, whenever they have lived in a house for a long time, they could have bought it to get a five-figure sum - GBP50,000 or perhaps GBP40,000. So when the seller get a six-figure offer they will believe they may feel uncomfortable about pushing for more and are already making a massive profit. However, it occurs to everyday folks most of the time - on my road a retired couple sold their 3-flooring end-of-terrace house for GBP385,000 that is around. Unknown it was bought by way of an associate in the estate service which had managed the sale and sold as three self contained flats for almost GBP750,000 just a few months later after likely less than GBP50,000 had been spent on the conversion.