Phil Spencer offers tips for avoiding estate agent fees
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Estate agents start with a big advantage: they do this job every day, but the average homebuyer only moves home a few times in their whole life. In other words, estate agents are used to handling customers with ‘showroom shock’ – people stunned by the enormity of the purchase ahead of them, and all too ready to be led by the nose. Property experts have shared four “sneaky tricks” estate agents use for Britons to be on the lookout for.
A spokesperson from LDN Properties said: “Unfortunately many less-reputable estate agents are known to use certain sneaky tricks to get homeowners to sell through them so be sure to check that any estate agent being considered is a member of a recognised professional body such as the National Association of Estate Agents.
“If you’re set on selling to an estate agent rather than through auction or to a property buying company, you should know how to go about spotting these tricks so that you can identify them when they’re happening and stop them.”
1. Overpricing the estimated value of your home
An estate agent could tell you a vastly higher estimated price for selling your home than one they truly believe you’ll be able to get.
The expert explained: “They do this to entice you to sell through them, thinking you’ll make much more money. But this is a trick because all they’re doing is using that high value to get your business, and you will find the estate agent ultimately looks to list your home at a much lower price.”
One way to “counter this trick” is to have an idea of the home’s value before meeting the estate agent, says the pro.
They said: “A quick way to do that is to use an online property valuation tool, but only use these prices as a general guideline. They’re not always accurate and are sometimes based on outdated information.
“You should also consider how best to price your property right to ensure you successfully find a buyer.”
2. Asking you to pay for more advertising
Some unscrupulous estate agents will try to get you to buy more advertising for your property if it has been on the market for some time.
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The expert said: “They do this because they want to charge you a fee for taking care of securing this additional advertising, even if it might be unnecessary – for example it could simply be a quiet time in the local property market.”
For those who are asked to pay more fees for extra advertising it’s often recommended that they end their partnership with the estate agent and look elsewhere to sell.
3. Taking on your property even if they don’t specialise in selling that type of home
Many estate agents are specialists in selling certain properties, whether that’s large listed homes, tenanted flats, or other types of buildings.
Because some estate agents might want to procure as much business as possible they might try to get you to sell through them even if your property is not a good fit for their business.
The property guru warned: “The end result will be that your home is left without strong representation at the estate agency.
“To avoid this happening and spot this ahead of time, research your local estate agents in advance and find out whether they typically sell the type of home for which you’re trying to find a buyer.”
4. Tactical fear of loss
According to property expert, Bryce Holdaway, estate agents can often invent phantom offers. He said: “As soon as they know that you’re slightly interested in the property, it’s amazing how quickly there’s another buyer. It taps into the emotion, it taps into your fear of loss and, therefore, you may be prepared to pay an emotional price for the asset.
“My advice on that is don’t necessarily fall for this tactic. Chances are, there might be another buyer; but equally, it could just be another tool the agent is using.”
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A way to arm yourself from this is to make sure you are rock solid on knowing what the value should be. If an offer sounds fishy, ask to see evidence. This usually means a letter from the other buyer’s solicitor, confirming that they are indeed willing to offer this amount.
To save you from losing money if you are gazumped (i.e. trumped by a higher offer at a late stage), ask if your estate agent operates a good will charter. This is an arrangement whereby both the buyer and the seller put down a refundable deposit when an offer is agreed. If either party pulls out, the other side gets to keep their deposit. This prevents sellers from continually accepting higher offers.
You could also ask about a lock-out agreement. This prevents the seller from negotiating with any other potential buyers for a limited time period (usually a few weeks). This can enable you to make enough progress with the purchase to convince the seller to stick with you as a safe bet.
The expert added: “If you do find the property that you like, you can act quite quickly so that you can make sure you get it. But don’t necessarily fall for it each time because the real estate agent is using this as a sneaky trick to get you to pay more.”
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