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23 Feb 2015 

Selling Your Home?

Selling Your Home? Watch Out For These Estate Agents' Tricks

That is the first of three articles warning house sellers and buyers concerning the tricks estate agents use to get your cash and also that will help you avoid being fleeced by your estate agent.

There are at least three main techniques commonly used by estate agents that sellers must be watching out for - the sucker sign-up, the price-slash along with the slash-and-catch.

1. The sucker sign-up

The basis for virtually any estate agency's success is obviously to encourage the most variety of sellers to sign with that agency rather than with their competitors that are many usually look alike. Research has repeatedly demonstrated that many folks consider our homes to be worth more than they actually are. Because we've lived in them and decorated them in a sense that suits us, we are frequently emotionally attached to them. We likely think our fearless colour scheme, modern open-plan living area, 'first attribute' fireplace 'designer' restroom will be the height of practicality and good taste and would entrance any potential purchaser. But on viewing our cherished dwellings, many buyers' first thought may be how they could gut the place and replace our execrable decorations with something better suited to their preferences and lifestyle.

This could introduce an issue for estate agents. So, when pitching for our business as sellers, we will be flattered by most agents by praising our home, try and sound us out we believe then assert they can quickly match or exceed our cost expectations and our property may be worth. This often results in them overvaluing our homes.

In addition to the another common approach agents utilize to get us to hire them is the phantom buyer. They'll probably tell us that they have recently been contacted by one or several buyers that are looking to get a property just like ours, as we're showing our house rounds. To force us even more, the agent's office may be phoned by he in our presence, supposedly to check that these buyers remain in the market. Invariably his office will support that there are bus-loads of eager buyers all eager to see our property. The message of the broker will be clear - then we'll miss the chance of a fast sale at a great cost, if we do not sign up with the buyers fast. Several days after we have signed, when the promised buyers seem to have mysteriously vanished into thin air, it's easy for the agent to tell us that the buyers have found someplace else or altered their minds or for the agent to give us some other cock-and-bull story to describe the buyers' astonishingly rapid disappearance.

2. The cost-slash

It is rather likely that your broker will have overvalued your property so as to get one to sign with them.

Many sellers assume that it is in the broker's interest to get the best cost possible. But this just is not the situation. Let's we assume you've got a Sole Agency agreement using a selling fee of 1.5%. If you are searching for say GBP285,000, the estate service will earn GBP4,275 and the individual broker maybe - GBP427. If the broker manages to convince one to accept an offer of GBP265,000, the agency will pocket GBP3,975 and the representative GBP397. While you drop GBP20,000, the bureau simply loses GBP300 and the agent GBP30. As the broker and also the service is going to be under pressure to hit their sales targets each week or month, it's often better for them to push one to sell in a lowly price instead of waiting endlessly for a buyer to supply the entire price - a GBP20,000, GBP30,000 or even GBP50,000 drop in your cost will have relatively little effect on their commission.

Getting you to drop your cost is normally relatively easy. Even though the agent may have initially been highly complimentary about your house, they tell you that they have had several buyers see not all the feedback and the property has been as positive as they had expected. The agent might even inform you that just after you'd signed up, they surprisingly got several other similar properties on the publications of the agency and that they all sold incredibly quickly as they were more 'competitively priced'. Or the broker might claim that there have been a few offers on your dwelling which were substantially lower than your asking price. But whatever strategies are employed, most sellers can instantly be persuaded to drop their price right down to the amount the agent had always known they'd get.

The ideal situation for the broker is when a client signs a Sole Agency agreement giving that agent exclusive rights to sell the property for an established period. This gets 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. With a Multiple Bureau scenario, there are two common scenarios which can develop. You might discover that each agent will do less work as they know it's likely another agent will get the commission along with the sale to market your property. The thus focus their efforts on properties where they will have Sole Service and try to shove on buyers. Or else a frenetic race could be as each agent attempts to get you to take any offers the receive. In this particular case, they may feel an even greater demand to convince you to accept a price-slash and you will end up bombarded with broker calls all suggesting what amazing buyers they've ready to take your property if only you'll reveal some flexibility on cost. It is just after, as soon as you've accepted an offer and withdrawn your property from other agents, which you discover the buyer wasn't quite as solid as was suggested - they may be in a chain selling their property, or might not have the finance completely organised or may not have the ability to finish as rapidly as you had considered. But by then it's usually too late to change your mind and return back to other agents.

3. The slash-and-grab

The most fiscally damaging scenario to get a seller is when an agent decides they can make lots of cash for themselves by inducing you to sell your premises at an attractively low price to somebody who is actually one of the broker's company contacts, friends or family. This slashing your price and grabbing your house might be somewhat straightforward as when the broker manages to convince one to accept a low offer from among their associates plus they subsequently resell your property to get a healthy gain netting the agent perhaps GBP10,000 to GBP20,000 or more for just a few hours work.

A more complex version of the scam is when you've got a house that can be split up into flats or house which should be modernised or a flat. Here the broker might possess a relationship with a developer. The price will typically be that the broker alerts the programmer to the opportunity, encourages the offer of the developer to be accepted by you (while maintaining your property is going to a private buyer) and then gets a bung in the programmer. This bung is known in the trade as a 'drink' and can normally range based on the profit made by the programmer.

The Internet has made the slash-and-catch somewhat more challenging by providing sellers with quick access to advice about the prices similar properties have reached. However, the slash-and-catch works an absolute treat with older, perhaps more vulnerable sellers who may be downsizing- selling off a larger family home and moving to your bungalow property for sale Totteridge or level after their kids have grown up and left home. These sellers make easy targets because, if they've lived in a house for quite some time, they may have purchased it to get a five-figure amount - maybe GBP40,000 or GBP50,000. So when older get a six-figure offer they will believe they are making a massive gain and may feel uneasy about pushing for more. This scam hit the headlines in 2009 when an agent was discovered to have convinced a seller to take GBP2.9 million for a property which had a value as a development of nearer GBP10 million. Still, it occurs to ordinary people all of the time - on my street a retired couple sold their 3-floor end-of-terrace house for around GBP385,000.

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