Ship of Fools: Bloody bloody estate agents

Thread: Bloody bloody estate agents Board: Oblivion / Ship of Fools.

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Posted by marzipan (# 9442) on :

why why do they feel the need to lie about everything
I realise they're working for the seller not the buyer, but what the hell is the point of listing an asking price that you know is €10k below what the seller will accept? Surely that just wastes everyone's time pissing about.
Also why is the biggest thing I will likely ever buy the result of basically a haggle?
Seriously, I don't even

(Sorry, the best rant I can come up with this time of night. Probably more ranting tomorrow)

Posted by HughWillRidmee (# 15614) on :

Estate agents work for the seller only as a secondary to working for themselves. They know that the vast majority of people (you and I excepted of course) lose any moral constraints that they may have when it comes to selling and buying property.

1 - Buyers will almost always use the agent who tells them that their property is worth more than the value suggested by all other agents. They know it's unlikely to be realistic but "it's worth a try". Then the inability to admit to getting it wrong becomes the certainty that the price is right and the problems start.

2 - If the agent has outbid the competition and got the instruction they then have to retain it. This can involve long rambling phone calls about the way the agent sees the market developing, promises that this is always a quiet time of the year but that it should pick up in a month or two......or three, blaming the government for depressing the market and/or any other story which might keep the seller on-board until the market rises to what was a silly price to start with. In extremis this can even extend to getting friends, family and/or colleagues from different offices to play the role of serious viewer.

3. Sellers usually think their house is worth more than it is. Build four identical houses, sell them for the same price and go back a few years later after each owner has spent £10K improving the property. One adds a conservatory, one re-fits the kitchen, another employs a professional landscape gardener and the fourth has installed a biofuel heating system. Each will be convinced that their house is now worth more than the others because the work they had done is, in their eyes worth more than that which the others had done. Then one sells and tells the others what they sold for. Immediately the remaining three are "worth" more because their owners never could see any point (value) in a conservatory. Oh, and the seller may well have been a little less than accurate when telling you what they sold for.

4 - Some viewers have no intention of purchasing - they just like looking around other people's houses

5 - Some sellers don't really want to sell - they just want to find out what they can expect to get for the house when they get rid of their partner/spouse.

6 - Sellers tell lies about the condition of the house - regularly and knowingly

7 - Buyers say they have cash/a definite sale on their property but their solicitor can't be persuaded to confirm it (even worse they don't actually, yet, have a solicitor).

8 - Chains

9 - Sole agency agreements. They're cheaper than multi-agency because 100% of a bit is better than none of a lot. If you were an agent with two similar properties on your books - all other things being equal - would you try to sell a potential buyer the property that only you can sell or one where several other agents are trying to beat you to a decent fee?

The truth is that many people in estate agents offices are amoral hucksters, they can all point to the need to be so because the public can't be trusted - unfortunately that's also true of many buyers and sellers - it's just the way humans react when having to make a decision with potential consequences that frighten them.

(Based on just over a year running an estate agency some 20+ years ago in a seemingly genteel small market town!).

PS also based on that limited experience - a basic rule - if your property has been on the market for three months, seriously advertised etc., and you don't have a sensible offer the price is too high for the market in your area at that time. Either drop the price, stop looking at potential purchases for a year or three or take the property off the market. Not always right of course - but odds on!

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by marzipan:

Also why is the biggest thing I will likely ever buy the result of basically a haggle?

Umm, because it's the biggest thing you'll buy?

Houses do not spring fully formed from the ether complete with price tag that says "I am worth $300,000" or whatever. Every house is a little bit different - whether in terms of location, view, work required, existing decor, or whatever. Every seller and buyer is different - some are desperate for a quick sale/purchase, and so will pay over the odds to achieve it. Others can afford to wait until a really good special offer comes around.

Most people haggle over the price of their car, too.

Posted by Arabella Purity Winterbottom (# 3434) on :

Not hellish, but we came across a real estate agent last weekend who was as honest as I've ever heard one be. We told her we were just finding out about the market in the region (not where we live currently), and she gave us a wonderful run down on the last five years of sales patterns.

Compared to the real estate agents in our own region, she was a breath of fresh air. We would seek her out again.

Otherwise I totally agree with Hugh. The other five agents we saw that day were ghastly.

Posted by Karl: Liberal Backslider (# 76) on :

Estate Agents should remind you of the rule of thumb that if your job title contains "agent" and doesn't include "secret" or "special", you're probably an arsehole.

Posted by Doc Tor (# 9748) on :

Literary agent?

(Mine's brilliant, for the record...)

Posted by Albertus (# 13356) on :

Hate to say this, but we moved last year aand both agents- ours and the one for the flat we were buying- were really good, honest, helpful, trustworthy. No idea how that happened! Mind you, ours was a neighbour.

Posted by marzipan (# 9442) on :

they're acting less like gobshites today (or he could just be lying to me again!)
how is something as exciting as buying a house also super tedious and irritating?
(also, i wish i was better at haggling, obviously i need the practice)

Posted by Snags (# 15351) on :

As far as I can work out, the only way to be really good at haggling for houses is to fundamentally not care whether or not you get that particular house. Or at least to be able to give that very strong impression.

Posted by Lord Jestocost (# 12909) on :

quote:
Originally posted by Doc Tor:
Literary agent?

(Mine's brilliant, for the record...)

From Frasier, discussing our hero's agent:

quote:
Roz: I've never had an agent. It's not like she worships the Devil.

Frasier: Well, she doesn't have to! He worships her!

Posted by sharkshooter (# 1589) on :

quote:
Originally posted by Snags:
As far as I can work out, the only way to be really good at haggling for houses is to fundamentally not care whether or not you get that particular house. Or at least to be able to give that very strong impression.

Works especially well for houses and cars.

Posted by no prophet's flag is set so... (# 15560) on :

I actually think exposure to the seedy and rank bad parts of buying and selling houses could be good if it caused people to truly understand how much of the business in our countries is conducted. Estate agents, real estate agents, realtors, whatever they are called, are the only places that people actually get exposed to how people do business in general.

People in business talk of screwing over others, the piles of loot they can obtain, expenses they can claim more or less legitimately, and how their shark of a lawyer protects from whining complainers. Nothing costs what it is truly worth. The goal is squeeze what you can out of the mark (the buyer). The foul experience of buying or selling a home is an thus a good argument for far more regulation of capitalism. (We could do banks and mortgage lender bashing next, as well as the people/instututions who managed to get the government to pay them their lost bets on speculative mortgages.)

Posted by Leorning Cniht (# 17564) on :

quote:
Originally posted by no prophet's flag is set so...:
Nothing costs what it is truly worth. The goal is squeeze what you can out of the mark (the buyer).

How else do you propose that we establish what a particular house is "truly worth"?

Posted by Belle Ringer (# 13379) on :

Wasn't it Woolworth who invented fixed prices? Used to be everything was bargained, including daily groceries. In some countries daily bargaining is still common. It's as much social as economic.

Meanwhile many of us think some fixed price goods way overpriced but bargaining is rarely an option.

Posted by Schroedinger's cat (# 64) on :

The thing is, as others have said, the value of a property is not a fixed thing - it is worth as much as someone will pay for it. This price is not the cost of producing it, it is a cost based on the value that people see that others will possibly pay for it.

In fact, everything we buy is based on this principle, but many items have a price set by the seller, because they know they can sell many of them at that price. They set a price that is non-negotiable, because if you won't pay the price, someone else will. If enough people won't, the price will reduce.

But a house is a one-off. It is not one of many things to buy, and if nobody is prepared to pay the price, it will eventually reduce. However, it only takes one person to buy at the given price. The next house will be different in some form - slightly different location.

And property valuations - as I know from when I worked in the business - are very much Finger-in-the-air, and "based on similar properties in the area". So defining the value of a property is a big piece of guesswork.

This flexibility in the value is why there is so much bartering.

Posted by L'organist (# 17338) on :

Estate agents are just shopkeepers who sell stuff that can't be moved into their premises.

Treat them as such and the fear goes away.

But then I'm the sort of person who, when asked what I want in a house, give and honest answer and expect any house that is promoted to me to have at least 50% of my requirements.

And the list starts with no fitted kitchen - which tends to confuse!

Posted by Schroedinger's cat (# 64) on :

quote:
Originally posted by L'organist:
Estate agents are just shopkeepers who sell stuff that can't be moved into their premises.

Hmm - actually, they are salespeople, getting a commission on what they sell. So it is in their interest to get as much money as possible for a sale. This personal interest does make a difference.

They are also, usually, shorter term than their purchases, meaning that they have no need to develop shopper loyalty. The only thing that is driving them is getting as much as possible for a property. Of course "as much as possible" means that something is often better than nothing.

However, they are also brokers, not actually selling stuff that they own, so they are partly driven by the actual owners of the property.

So they are as trustworthy as financial investors/merchant bankers.

Posted by Arabella Purity Winterbottom (# 3434) on :

It becomes really obvious when you're thinking of moving from a city to a less populated area, as we are. We can expect to get a very large sum for our city house, just on its current rateable value.

In the place we're planning to move to, this would buy us two houses of the same or better quality. It has led us to think about keeping our existing property and renting it out once we move, giving us a good weekly income to pay off the new place.

Posted by no prophet's flag is set so... (# 15560) on :

quote:
Originally posted by Schroedinger's cat:
[Hmm - actually, they are salespeople, getting a commission on what they sell. So it is in their interest to get as much money as possible for a sale. This personal interest does make a difference.[/QB]

The data in Canada a few years ago showed that they sold their own homes for some 15% more than comparable other properties.

Posted by Liopleurodon (# 4836) on :

quote:
Originally posted by marzipan:
why why do they feel the need to lie about everything
I realise they're working for the seller not the buyer, but what the hell is the point of listing an asking price that you know is €10k below what the seller will accept? Surely that just wastes everyone's time pissing about.
Also why is the biggest thing I will likely ever buy the result of basically a haggle?
Seriously, I don't even

(Sorry, the best rant I can come up with this time of night. Probably more ranting tomorrow)

Why do they do that? Because they know that most people have a limit set on their online searches, and they want to get as many people in as possible, and then hopefully several will fall completely in love with the house and start a bidding war that goes way up over the original asking price. Because quite often a buyer will have an idea of maximum budget but then they see a place and really want it and do their utmost to wrangle more money out of their mortgage provider.

When we bought a house last year we knew damn well that it was worth more than the guide price (or rather, the "offers in excess of" price, which seems to be getting more common these days), which was artificially low to draw people in. Basically, it was on the line such that everyone's searches would have shown up "shithole - shithole - shithole - LOVELY HOUSE - shithole" and so it drew far more attention than it would have done at a more realistic price. We ended up beating six other couples in a bidding war and paying £30k more than the original asking price - but weren't too phased by that because we always suspected that was what was going to happen.

I know it's a massive pain in the arse. It is, unfortunately, how the market works at the moment.

Posted by marzipan (# 9442) on :

luckily this one was well within our budget, even though it's now gone above the asking price. Though one of the owners has buggered off to the races for a week [Roll Eyes]

so they won't tell us whether they'll accept our offer until they see how much money they've managed to gamble away. Or something.
(at least agent seems to be taking us seriously now - I think)

Posted by mark_in_manchester (# 15978) on :

Anyone in the UK wanting to hear the voice of a decent-sounding estate agent (oh, I *know*!) might like to catch the first witness on this week's 'Moral Maze' (Radio 4), still available on BBC I-player. His sadness at what his profession / the market required him to do may well have been egged-up a bit, but he did a fair job of telling the truth. Just imagine!

Posted by Golden Key (# 1468) on :

quote:
Originally posted by Lord Jestocost:

quote:
Originally posted by Doc Tor:
Literary agent?

(Mine's brilliant, for the record...)
From Frasier, discussing our hero's agent:

quote:
Roz: I've never had an agent. It's not like she worships the Devil.

Frasier: Well, she doesn't have to! He worships her!

And very accurate, re that particular agent!
[Eek!]

Posted by Belle Ringer (# 13379) on :

quote:
Originally posted by no prophet's flag is set so...:

quote:
Originally posted by Schroedinger's cat:
[Hmm - actually, they are salespeople, getting a commission on what they sell. So it is in their interest to get as much money as possible for a sale. This personal interest does make a difference.
The data in Canada a few years ago showed that they sold their own homes for some 15% more than comparable other properties. [/QB]

I mistakenly used to think it was the agent's self interest to get highest price. No. Their goal is to collect a "paycheck" now for as little work as possible, instead of a maybe a little more later for more work.

This means sell the house fast, which means sell at a lower price than one might get by waiting and putting more time into the effort (more dealing with potential buyers and walkthroughs) or by more back and forth bargaining to raise the price another $2000 or 10,000.

$2000 is a lot to you but (using a 6% commission) it's only ~$100 for them, half that if commission is split with another agent, even less after the agency office takes it's cut. An agent won't work another three days of bargaining for $25 (and risk losing the whole deal by the buyer finding a different house). $10,000 is just $150 for the agent herself (after splits with listing agent or buyers agent and split with office owner.)

So they pressure you to take the deal (let them collect their paycheck and move on to the next deal) instead of trying for an additional $2000 or $10,000 for you.

My parents' real estate agent dropped the price after just 6 weeks because "it isn't selling" - in March! Not even prime selling season! She said "these big houses don't have a season." Ha. Truth is she wanted a paycheck in March instead of waiting until June. I protested but old folks from the "obey authority" generation trusted the "expert" they hired - so a large house in good condition with some amazing features went for property value, with the agent insisting they had to accept the low offer because "it's the only offer we've gotten." Duh, it was March! Snow and mud on the ground, not even spring flowers yet to make the grounds attractive.

Agent self interest explains why they insist "for sale by owner" are "way overpriced" and resist showing them even though one agent told me they get the shared commission rate from a FSBO. They don't want people to see that FSBO houses sell and neighborhoods stop using expensive agents! (I've read 20-30% of USA homes sales are FSBO.)

Appraisals are now on line for all to look up the address; where I live appraisal is supposed to be actual market value; buyer and owner can use that government yearly-adjusted evaluation to come to agreement. Most FSBO listers I've talked to are not over-pricing, just splitting the would-have-been commission with the buyer.

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