Estate Agent and Gazumping?

[FlamBango]

Yet, as shown in this thread multiple times, both of you will likely receive less for your property sale (even after EA fees are taken into consideration) by doing the job yourself. You'll be effectively losing money to ensure that you (as a novice to the situation) have to deal with and manage the sale. A good EA will almost always be able to get you a higher sale price, and have links to chase solicitors on both ends that you won't be able to do.

but thats true only if youre a little shy to haggle and stand up for yourself. Once a price is agreed we would send details to our solicitors and let them get on with it. We would know who they are in the event of wanting to chase things up.

I think i would be missing out on that inital wave of clients that they have on their books which they would pass details on to, that would last a week or so, but the main thing is to get your property on rightmove, and there are plenty of people out there who can do that for a small fee.

 

[Peerzy]

Why would the agent get a higher price?

* Is it because, as per the example above, they have made up a higher offer which caused the genuine bidder to have to increase theirs? (which is completely immoral not sure about unlawful).
* Or is it because they can do a best and final process? Why can't an individual do that?
* Or is it because they can negotiate with a buyer? Why can't an individual do that?
* Or is it because they may be able to generate a larger pool of potential buyers? I agree this may be correct as its not possible for an individual to advertise on say Rightmove without going through an agent of some kind.
* Or do you think they have better vetting processes that is likely to mean the sale proceeds better? Maybe this is true.


I agree that the agent may have better solicitor links. But these days agents just make use of these large online conveyancing firms, which are pretty routine. You can still employ one of those firms as an individual.

And mortgage advice is often just as good (maybe better) from an online no fee firm (eg L&C) as the in house mortgage broker of the agent. When I bought my house I'd already started the process with L&C, but I was basically told by this agent that I'd not be seen as a good buyer if I didn't use their in house broker. Which is a complete lie but what could I do, I wanted the place. That cost me £600 more than it needed to.


The main value I see from an agent is the advertising coverage really, and maybe the arrangement of viewings, vettings and negotiation if you don't want to be involved yourself, but I disagree that an agent can automatically get a better price than an actively involved seller.

Good luck as an individual trying to get the best price via a best and final or negotiating stance. Agents will likely know the buyers well, have spoken to them, know how they've managed previous negotiations, know their max figures, know what they've offered elsewhere on other properties, know that they've pulled out on another deal and many other factors. There is simply no way a homeowner acting on their own will be able to get as high a sale price as an EA. That's even without considering, as you've said, the ability to create other offers and buyers and encourage price matching.

When I mentioned solicitor links I wasn't referring to them recommended a solicitor. An EA can phone up solicitors all the way along the chain, along with other EAs to find out what is going on, where a bottleneck is and assist with getting the chain completed and purchases done as quickly as possible (all in their own interest, they won't be paid until this happens). Good luck as a random owner trying to phone up the solicitors of a house or two up your chain, or even your buyers solicitors. They'll promptly tell you to jog on and they won't deal with you, where as they will to a certain extent with an EA who is acting on behalf of you for a sale.

One of my best friends in an EA, he takes properties on and often says about 30-50% don't ever make it to Rightmove. When he takes on a property he already has 5 parties he know will be interested in it, he already knows which one is a time-waster, which ones are ready to proceed, which ones can offer the asking price and which ones will bend easily when emotions come into play and they think they'll lose the property for the sake of another £15k.

You selling the house as a homeowner will receive an offer of asking and be delighted, the EA will know one party lost out of 2 houses last week and those offers were £20k above what the asking price the new vendor wants so he knows he can get another £20k for his client. Heck, even if he only gets £10k everyone is happy - the EA has a sale, the buyer is spending £10k less than they were last week for a property they want and the seller has just sold for £10k more than they expected.

 

[danlightbulb]

Good luck as an individual trying to get the best price via a best and final or negotiating stance. Agents will likely know the buyers well, have spoken to them, know how they've managed previous negotiations, know their max figures, know what they've offered elsewhere on other properties, know that they've pulled out on another deal and many other factors. There is simply no way a homeowner acting on their own will be able to get as high a sale price as an EA. That's even without considering, as you've said, the ability to create other offers and buyers and encourage price matching.

The strange thing with all this as well, is that you know full well (and making the case for) agents to maximise your selling price, but you know full well therefore that the agent you're buying from will be doing the exact same thing to you as an onward buyer.

And given most people tend to trade up not down, this arrangement is actually costing you money not making you money, overall.

 

[Mercenary Keyboard Warrior]

Ah yes Estate agents another of the things that should have been wiped out by the internet but tries to cling on.

Purple bricks is about the best balance now.

 

[Peerzy]

And given most people tend to trade up not down, this arrangement is actually costing you money not making you money, overall.

It's a situation out of my control though. I have 2 viable options when moving house, assuming I'm moving to a more expensive property;

1) Option 1, use an EA to get the highest value for my property. I am aware the seller of any property I buy will also be doing the same.
2) Option 2, sell my property myself and as explained in my last post, likely receive a lower figure. I am aware the seller of any property I buy will be using an EA so I will be at a disadvantage and the cost to change will be higher than option 1.

Option 1 reduces the cost to change for me. It's not realistic to only buy from a seller acting on their own and not using an EA as it isn't the norm.

So the arrangement isn't costing me money, it's saving me money against the only other alternative.

 

[Mercenary Keyboard Warrior]

Estate agents achieving a higher price (fairly) sounds like the old bidding early on an auction means you pay more logic. There could be situations where thats correct but basically impossible to say when its true and not, but will undoubtedly be true some of, but not all the time.

When I have bought houses I have made my offer, the vendor comes back with yes or no, I decide if I am willing to pay more if they say no, which I have normally already done in advance.
The estate agent knows nothing of my situation so has no knowledge they can use as leverage. Bar a broad high level sum.
How exactly have they achieved a higher price for the vendor?

I think its partly the reason they like in house mortgage advisors, "handing over"* info they shouldn't on your situation.

* I mean conveniently leaving the details on wage and equity etc where the agent can see it.

 

[danlightbulb]

It's a situation out of my control though. I have 2 viable options when moving house, assuming I'm moving to a more expensive property;

1) Option 1, use an EA to get the highest value for my property. I am aware the seller of any property I buy will also be doing the same.
2) Option 2, sell my property myself and as explained in my last post, likely receive a lower figure. I am aware the seller of any property I buy will be using an EA so I will be at a disadvantage and the cost to change will be higher than option 1.

Option 1 reduces the cost to change for me. It's not realistic to only buy from a seller acting on their own and not using an EA as it isn't the norm.

So the arrangement isn't costing me money, it's saving me money against the only other alternative.

Yep thats true. I should have clarified that the arrangement likely costs 'all of us' more, in general, rather than an individual. Like you say, you perhaps have little choice because you either play the game or don't.

The estate agent knows nothing of my situation so has no knowledge they can use as leverage. Bar a broad high level sum.
How exactly have they achieved a higher price for the vendor?

I think its partly the reason they like in house mortgage advisors, "handing over"* info they shouldn't on your situation.

* I mean conveniently leaving the details on wage and equity etc where the agent can see it.

When I bought my house I had made an offer on a previous house with the same agent (they have a strong monopoly on the area for some reason) and didn't get it. I'd also been forced to use their in house mortgage advisor (basically told in not so many words that if I didn't I wouldn't be taken seriously - this was over the phone of course, not in writing). They definitely knew what they could get out of me. And it was at a time when the market was really lively and everything was being bid up as well.

I don't think the house I bought was worth what I paid, but then, nothing is worth the current prices in my eyes (speaking in terms of value for money, rather than market value).

 

[LeeUK]

Some agents are the opposite.

I booked a viewing of a property not long ago (before I decided to buy new build) and a couple of hours before the viewing I got cancelled saying the seller had accepted an offer and it was now sold. For all they knew I could have offered full or over asking price.

Anyway fast forward to now and obviously the sale fell through as it's back on the market again.

 

[Mekrel]

The last house we viewed before the one we eventually went onto buy had an estate agent trying to play games, and was quite rude to my partner when we told them we weren't interested in the house (she just said we found another property that better suited our criteria).

We arrived for the viewing a couple of minutes before our slot, and the previous people viewing were leaving as we arrived. We were barely in the house for two minutes when we noticed another couple stood at the front door (normal people would wait in their car, rather than stand literally on the door step when you're 20+ minutes early to your slot). The estate agent basically said they had lots of viewings the day before and as you can see, it's busy today.

They said they would email everyone on Monday asking for offers, before essentially sealed bidding/asking for best final offer. The house was nice, was recently refurbished to a high standard and had a huge (I mean ride on lawn mower size) back garden. The only downsides were not much kerb appeal, literally no place to put a half decent dining table (the house wasn't small, just poorly laid out and they had stuck a massive island in the kitchen). Clearly, plenty of space to extend into the garden but that costs money on top of the bidding war the estate agent was trying to stoke.

It made the third property a no brainer when we saw it as the £75k difference in price was going to disappear/narrow if the 2nd one went into a bidding war.

Anyway, three months after we moved in, someone else at the estate agent for the 2nd house emailed my partner with a list of properties matching our criteria and this one was included. Either it wasn't as popular as they made it out to be, or people felt the offers in excess of price was already high before this supposed bidding war, or something fell through on an agreed purchase.