Why signing an Estate Agent’s 12-week agreement might cost you £1,000’s

Is a long-term agreement really in your best interest, or the agents?

I think you will agree, it is fair and sensible to have an agreement with your estate agent which sets out what fee will be charged if they sell your house for you.

So why do some estate agents ask you to sign an agreement which locks you in for up to 12 weeks?

Is that really in your best interest? The simple answer is no it is not!

Agreed, the agent spends a lot of time, money and effort marketing your house and normally only gets paid if they successfully sell it for you.

That is of course unless you choose to take a chance on an online agent, in which case they take your money up front, and it is up to you to sell your house and see it through to completion! But that’s another story and something we explore in a later blog.

Clearly it suits an agency to have your property locked in a sole agency for 3 months.

Overvaluing to win business is the oldest trick in the book, telling you that your property is worth more than it really is, compared with comparable properties in the market. You are naturally pleased to hear the higher valuation and before long they ask you to sign their 12-week agreement.

Nothing wrong that you might think – worth a punt at the highest price.

Maybe you get lucky, but more often than not this is the point where the difficulties begin.

You will know yourself that when you start looking for a new home you quite quickly get a grip on the market and figure out what price’s properties should be. The internet helpfully provides you with lots of evidence. You soon decide if a property looks too expensive and move on down the list.

Your house is now one of those on the internet forecourt that is being ignored and glossed over. Buyers are not calling your agent to ask about it and nobody is coming to view. A couple of weeks have passed and there is a deafening silence from your agent.

So, you call your agent to find out what is going on. They say, “it is early days” or “the market has cooled for properties like yours” or “it’s the wrong kind of weather!” etc etc.

Never, sorry we overpriced it just to get you signed on a sole agency agreement!

Your house is not selling and the houses that you are interested in buying are. You are missing them. You start to wonder whether you picked the right agent. But you still have 10 weeks left on the lock in agreement. It looks like you are stuck with them.

Reluctantly, you ask what can be done. Their answer is of course to drop the price. Their intention all along.

Unfortunately, this is the point at which you can start to lose thousands of pounds.

In order to sell, you have to drop the price, probably to where it should have been in the first place. But savvy buyers will see you have done this and start to circle. They know you want to, or even have to sell. They see their opportunity and start making low offers. They are taking advantage of your dropping price. You are now on the back foot and your choice is either to sell at a price you probably aren’t happy with or stay where you are and don’t move. Neither of which was what you set out to do.

We see this happening every week

Estate agents looking after themselves with their long lock-in agreements, when they should be looking after you.

Space Station have been an independent company since 1997- We do not get involved in those sorts of practices.

We do not lock you into our agreements. If for any reason you want to change agent, then you can at any time and immediately. All we ask, is for 7 days’ notice and that you treat us, how we treat you. Kindly, respectfully and honestly.

The upshot is we do not over value your house, we value it correctly.

We use our experience of the local market and evidence of the prices of similar properties that have recently sold to give you the proper market appraisal. This is essential because the first few weeks of marketing are the most fruitful for you. It is then that we offer your house to a waiting pool of eager buyers.

Providing you have priced your property correctly it will not be ignored. Quite the contrary, we often have sealed bid scenarios with buyers competing with each other to purchase your house and often agree a price in excess of the asking price.

If this first few weeks of critical marketing is messed up with an inflated asking price, then that pool of buyers disappears, and you are left with just the new buyers slowly coming to the market – one at a time.

Successfully selling in the first few weeks allows you to go and buy the house you had your eye on, rather than being frustrated as someone else buys it while you are waiting for viewers.

EARLY BIRD BUYERS

Our early bird buyers, receive the latest instructions 48 hours before the property is advertised on the property portals. This we have found generates great early interest and buyers appreciate the early exclusives.

When you employ an Estate Agent you expect to receive experienced and professional advice. Please do not get caught out by unrealistic high valuations, as tempting as they are, it almost always ends badly and cost you both money and time.

And please do not sign long-term agreements that lock you in.

Done right, the marketing and sale of houses can be a relatively straight forward and stress-free business. It’s something we have been doing for over 30 years.

If you have any questions about how it all works, please feel free to call me anytime and ask. I am always happy to help. Call me on 020 76136262

We look forward to helping you.

Russell Chopp