Estate agents can seem about as popular with the British public as traffic wardens. Yet, a good agent who understands the market is worth their weight in gold when selling a property.
Many of us approach selling our homes with the same trepidation we’d feel if we had to organise three back-to-back weddings and a company takeover. The list of what can go wrong is daunting – offers are withdrawn; valuations fail; leaseholds become a minefield; contracts get delayed; surveys scupper a deal; and emotions fray.
Of course, the whole process is a lot smoother if you find the right estate agent to attract buyers and steer the sale along. Unfortunately, we Brits don’t have much faith in them. According to recent easyProperty.com research, 49 per cent of us think their agent is “ripping them off” and 54 per cent say the fees are too high.
But fear not. There are plenty of good agents out there. It’s just a case of knowing what you should be looking for.
In the selling game, information is everything, so you need to trust that your agent is batting for you, not the buyer. Tom Avon learnt this a few years ago when the selling agent on a house he wanted to buy in Surrey spilt the beans on why the vendor was desperate to sell. “The house was on at £2.85 million, but armed with that information we went much lower and got it for £2.2 million. Good for us; bad for the vendor,” says Avon.
Martin Bikhit, managing director at Kay & Co estate agents in London, knows how to winkle out such double-dealers: “If I were selling, I would go through the buyer’s experience with a few agents,” he says. “I would look at how they treat the buyer and how they engage to try to sell a house to me.”
It’s also worth viewing agents’ websites from a buyer’s point of view, says Simon Gerrard, managing director of Martyn Gerrard Estate Agents and president of the National Association of Estate Agents. “How easy is the website to use for buyers? Consider how they present property to attract buyers, such as the quality of pictures and floor plans and if they make use of videos.”
Another important aspect is how many potential buyers they can put your property in front of. “You should look at what web portals the agent is on,” says Gerrard. “The better agents will apply search engine optimisation of their own website and the properties advertised on it.”
Experts agree it is crucial to get a marketing appraisal for your home from at least three estate agents before picking one. The big mistake, however, is to be seduced by a high valuation. Homeowners Alliance recommends picking an agent you are impressed by and who has given a low valuation, reasoning that you can always nudge it up. It warns that a bad agent will start with a high price and then try to talk you down once you have appointed them.
Gerrard agrees: “It is essential that the right asking price is set. Pitch it too high and you will lose the all-important initial impact, which could lead to your property sitting on the market months and eventually selling for less.”
The question is, though, how do you know whether your agent is setting a fair price?
One way is to do your own research by trawling internet sites such as Zoopla and PrimeLocation for comparable properties in your area.
The other way is to find an agent with local market knowledge, a recognisable quality brand, prominent high-street office and good local reputation. And beware agents who simply employ people on commission to get listings because they are more likely to overvalue, forcing you to reduce the price later.
Bikhit underlines this: “A good agent will know their market and will know what else has sold at that price. They use four or five comparable sales to justify the price,” he says. “The price-reduction route is a waste of time. You want to be ahead, not chasing the market. So, pitch your price correctly and ask frank questions.”
Conversely, some agents may price your house low for a quick sale so they can earn their commission quickly. If you believe that agents share your desire for getting top whack on your sale, you need to read Freakonomics (by Levitt and Dubner). The authors argue that the business model requires a turnover of house sales to create cash-flow, the commission they lose on the lower price being negligible. One survey in the United States showed that, on average, agents keep their own houses on the market for 10 days longer than their clients’ houses – eventually selling them for three per cent more.
Happily, not all agents work that way. Jonathan Shawcross was so impressed with the agent he used to sell his property in Gerrards Cross, Bucks, four years ago that he is using him again.
“It was a high-value house, but he was a professional negotiator and I felt the one per cent fee was realistic. Essentially, three offers came in at the same price. He was onto it, telling us we needed to capitalise. Within three days we had a final sealed bid offer. The agent managed it well and stepped up the price a lot,” says Shawcross.
“He didn’t just hand the job to a junior in the office when the bids came in. He was accountable and saw the sale through.”
Word of mouth is a neat way of finding an agent who goes the extra mile, although Khalid Ghani, director and franchiser (Finchley) at Ellis & Co, tends to pitch using client testimonials to explain his service.
“Rather than just sell, I get involved with managing the whole move. For instance, recently, a vendor asked my opinion on the home he wanted to buy and I gave him advice on how to push the seller of that house along.”
Negotiation is the best test of an agent’s mettle and you can assess how good they are by pushing them on their fees. These can be between 0.5 per cent and three per cent and should include all marketing, floor plans, photographs and in some cases a PR firm. If you are using multiple agencies a further one per cent or 0.5 per cent will be added.
“Ask your agent to justify their fees,” suggests Ghani. “Their answer will reveal how they will work for you. If the agent doesn’t negotiate and explain why their fee is higher, then they are not going to be a good negotiator for you, either.”
“People put the value of an agent’s experience over the fee. A flat was on for £480,000, and an offer came in for £470,000, but I managed to broker a compromise for £475,000. I gained £5,000 for the vendor. Some agents would have settled for the offer, but the small difference in my fees helped them secure a much better deal.
While vendors want transparency from their agents, Tom Bailey, head of Prestige at Bridgfords, Prestbury, Cheshire, says agents need the same from clients.“Fact-finding is important to avoid disputes further down the line. For instance, I need to know if they had an issue with the neighbours in the past, because you don’t want it coming up when an offer has been made. You need to be able to explain the situation up front.”
As a vendor, you are also rightly concerned about the safety of allowing strangers into your home. Some agents ask for proof of funds before a viewing, but that can be off-putting for potential buyers. At the least, experienced agents will ensure viewers supply an email and postal address and where relevant will do background checks to ensure they are genuine house-hunters.
“One viewer was living in a council flat, but wanted to view a multi-million pound house belonging to a celebrity, so we said no thank you,” says Bailey. “And we make sure we go along to viewings. It is more labour-intensive, but you can pick up on any problems.”
Open house or individual appointments?
Opinions on whether an open house is worthwhile are divided. Vendors with families find them more convenient and like to generate a “fight” for their property. Agents are more circumspect, believing that they can have an adverse effect in a depressed market, particularly if they don’t sell and have to be re-advertised.
“The downside of an open house is that it can be intimidating for house-hunters to view with 20 other people. If I were selling, I would want individual appointments,” says Simon Deen, head of flat sales at Aston Chase in London.
“If it goes to best offer, people can have second thoughts. The fevered buying climate created by open houses can be counterproductive. If you view as individuals, buyers have more time to think about things and make a more informed offer that is likely to go through to fruition.”
Which brings us on to that nail-biting time between getting the offer and the sale going through, when finance can be a particular stumbling block. Some agents will advise the vendor to agree not to accept further offers, but to continue to show the property “under offer”. This ensures you are still in the game should the initial offer fall through. With a cash deal your agent should get you proof that in principle the buyer has the cash or liquid assets to finance it.
Similarly, if the process takes too long, your agent needs to be on the case. “A decent agent should know that a high-street lender would book a survey within a couple of weeks and the solicitors should have been instructed,” says Ghani.
“If not, we become suspicious. A good agent uses their instinct, knowledge and experience and would be checking.”
And, of course, you need to trust your own instincts, too. If you don’t have a good feeling about an agent, perhaps he or she isn’t the one for you.
- Look for a company with experience and a high profile in your area
- Check how they present and market other properties
- Consider posing as a buyer to find out how they treat you and whether they have the vendor’s interests at heart
- Ask whether they accompany viewers
- Check the fee covers all marketing costs
- Use a qualified agent, regulated by a body such as the NAEA; Guild of Professional Estate Agents; or Property Ombudsman