Property: It's a seller's market but the price must be right
The property market is booming. But what to do if your agent isn't performing?
Saturday 15 May 1999
There are, of course, those houses that always go for well over the odds, but anyone tempted by the estate agent who suggests, without any evidence, that buyers generally are paying inflated prices should be prepared for disappointment.
Fiona Mann fell for this argument when selling her home in Hemel Hempstead to move to Scotland. "We had a new two-bedroom house in a popular area and although we had a good idea of what the others were going for, a smooth- talking estate agent told us it would sell for more.
"We made a serious error of judgement in believing him. After eight weeks only two people had been shown around, and they were part of the agent's tour and weren't really interested in our kind of house."
The Manns had to move fast when they found a place in a craft centre suitable for their new metalwork business. Since they were buying under Scottish law they had to go ahead with the purchase whether their Hertfordshire home sold or not.
"We were getting very worried, so we switched agents. The price was dropped from pounds 90,000 to pounds 88,000 and within two hours we had an offer. We accepted pounds 85,000 for a quick and straightforward sale."
"Looking back, the price issue was crucial," says Fiona Mann. "We also fell for the charms of the front man who promised us the world. We should have insisted on meeting the person who would be selling the house because most of the time we were dealing with a 17-year-old who knew nothing about our property."
At the Bradford & Bingley estate agency which sold the Manns' house, Alan Gottschalk, a regional director, says that while a shortage of good property applies everywhere, house-price inflation does not.
He cites the case of an elderly woman who has been unable to sell her Lincolnshire house for six months because the price is too high. "She will soon find she can't afford to buy in the West Country becauses prices there are rising. A vendor should ask an agent how many similar houses have been sold at the suggested price."
Sellers at least are paying an agent to advise and negotiate for them, but buyers must cope on their own. A market in short supply can induce panic in buyers, who are afraid of losing a property and, not unreasonably, wonder who is really on their side.
"It is not unusual for an offer to be made in haste and withdrawn shortly afterwards," says Mr Gottschalk. "On the other hand, a lot of people don't believe an agent when he says they only have a short time before someone else is likely to make an offer and then they find that the house has gone a week later."
Two key actions are getting the survey done as soon as possible, then, if there are problems, making it available to the vendor; and checking exactly what is included in the sale - a common bone of contention, especially if a figure less than the asking price has been agreed.
"Buyers might feel at the moment they are being pushed into making high offers; but if they make a point of viewing five or six properties in the area in a short space of time, they will know the right house when they see it and have an instinctive idea of its market value," Mr Gottschalk adds.
But getting a head start on other buyers can be daunting in itself. "Be persistent. Keep badgering the agent," says Mr Gottschalk. "Pop in and see them and phone them at least two or three times a week. That way they will know you are keen and put you at the top of their list. And a good agent should phone a buyer every week."
For those who cannot face househunting, let alone the nitty-gritty of negotations, a buying agent might seem worth the 2 per cent of the buying price that they are likely to charge.
Buying agent James Wilson, of Lane Fox, believes the biggest advantage of this service is that emotion can be kept out of the purchase. "If the price is too high or something is not right with the property, I can walk away. It is not so easy for buyers who have set their heart on the place. Plus, if you only buy once every three years, it is obviously harder to get the measure of the market."
He doesn't subscribe to the adage that an offer less 10 per cent of the asking price is a safe formula for people to follow. "Buyers must know what the property is worth to them. If they are going to be living in it for a number of years they might well be happy to pay more than someone who will be selling after a brief time."
So should buyers regard selling agents as friend or foe? "Even though the vendor is their client, they do have a duty of care to the buyer. Having said that, they would not be doing their job if they didn't try to get the best price and a good agent will use the fact that a buyer is really keen to that end."
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