When an agent turns into a hero

Along with school catchment areas and house prices, estate agents rank high on the list of things that people love to moan about at dinner parties. So what exactly do they do to earn all that commission? Penny Jackson investigates
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Try telling some people who have sold a house within days that the commission paid to the estate agent has been hard earned. "Money for old rope," they argue. "How much better it would have been if we had sold it privately and saved ourselves thousands of pounds." It all sounds so simple and - with the internet at our fingertips - it might seem the most obvious course for anyone with confidence and a half-decent property.

If it's a pretty cottage in a popular Surrey village then the case becomes even stronger and a private sale was certainly an option that Vanessa Buckley considered when she and her husband decided to sell their Cobham home in July. Instead, they placed it with local agents Bradford & Bingley Gascoigne Pees who sold it within 10 days. So in the light of that, how does their decision look?

"In that time about 20 people came to look at the house, which is something I don't think we could have achieved, especially as we were not sure about the best way to market it," says Vanessa Buckley. "But more than that, we needed to sell fairly quickly because we are moving overseas. We couldn't make any plans until we had a guaranteed sale and so the professional advice we got was very important. We had two offers under the asking price to begin with and then a third one at the full price of £375,000."

But the effort that estate agents put into earning their fees can vary enormously and, if some vendors feel that they can do better, it may well be the result of bitter experience. Many of the costs involved in moving are unavoidable - paying an estate agent is not one of them.

If sellers do choose to use an agent, a key issue is how to achieve the proper market value for their property, says Peter Young, managing director of John D Wood. Experience has taught him that valuation is "a science with an art to it", and that doesn't mean using a neighbour's property as an accurate guide. Furthermore, selling your own house could prove in the end to be a great deal more costly than an agent's commission.

"A client had committed himself to selling his house to a friend. On the strength of that, he entered into a contract to buy something else, only for the friend to let him down at the altar. He had not advertised the house, of course, and there was no one else in the picture. Thanks to us, he now has a purchaser who will pay 10 per cent more and perform to the right time-scale."

The initial saving on the 2 per cent commission would have been £50,000 - a tidy sum, but small in comparison to what he is gaining from the current sale. "It works out that he will be £200,000 better off - that's a hell of a lot of friendship," says Young. "Had he come to us at the beginning we would also have advised that he tied in the sale and the purchase at the same time."

Reading the current market - or any market, come to that - is never as easy as it appears and adopting the correct strategy can make all the difference between an acceptable and excellent deal. Starting off at 20 per cent below the market value for one particular property has brought it to within 5 per cent of the asking price, with yet more interest in the wings, explains Peter Young, adding that when it comes to the negotiations themselves, sellers can easily be put on the spot if offers are made directly to them. They are far better served by using a third party.

The difference between a good experienced agent with a huge market knowledge and an amateur on straight commission is everything, says Ian Stewart , director and head of London region with FPDSavills. "You have build up a relationship with client in order to work in their interests and that might well be over the long term. In the current market there is no doubt that we have to work twice as hard to get the same results."

Selling through agents with a network of offices has obvious advantages, for instance in providing London buyers for the home counties market. "Individuals can advertise for themselves but a lot of sifting is done through that network," says Stewart. It can also be useful when buyers want to consult other services that come under one agent's umbrella. In the case of Vanessa Buckley, she was able to use Charcol, the independent financial advisers who belong to Bradford & Bingley. Stephen Parsons, director of the Cobham branch, explained that this speeded up the sale as well as providing the Buckleys with advice about their foreign destination.

And even Vanessa Buckley's pretty Surrey cottage seemed very saleable, there was one snag. The gardens of the cottage were allotments at one time and thus don't back directly on to the property. "This could have been seen as a negative by buyers unless presented properly," says Parsons.

"Where there is more than one buyer interested, a seller needs advice on who is going to prove the most suitable for their timetable. And it is important to leave the unsuccessful purchasers in a good frame of mind as you might have to fall back on them. This is a skill even new negotiators take a while to learn."