Read in detail about estate agent fees.
Recognising and addressing common estate agent tricks will safeguard your interests in property transactions.
Why do estate agents employ tricks?
Estate agents often use various tactics to achieve their primary goal: selling properties. Their strategies are shaped by the need to attract buyers, secure offers, and finalise sales.
Estate agents' income often depends on commission, driving them to maximise property prices and sales volume.
We have compiled a list of questions to ask estate agents to help you in the selection process.
Common estate agent tactics and their impact
Estate agents use a range of tactics to influence transactions. Estate agents tricks, which are more common include overstating property demand, creating a sense of urgency, and using persuasive language to sway buyers.
These tactics can lead buyers to make hasty decisions or pay more than necessary.
An estate agent's job involves juggling multiple interests: serving the seller, assisting the buyer, and ensuring a fair deal. While their primary allegiance is to the seller, ethical agents aim to strike a balance, offering fair advice and information to both parties involved in the transaction.
Read more about the cost of selling your house.
For buyers: recognising and responding to pressure tactics
High-pressure to act quickly
Estate agents often employ tactics to prompt quick decisions. A common strategy is suggesting other buyers are interested in the same property. This can lead to rushed decisions, overlooking important details. To counter this, take a step back.
Making a hasty decision could result in overlooking aspects of the property or agreeing to unfavourable terms.
It’s beneficial to have a clear list of priorities and stick to them. If you feel pressured, requesting more time to consider your decision is acceptable.
We have detailed article about online estate agents.
Dealing with phantom offers and false reassurance
Phantom offers, where agents imply other interested parties without evidence, are a tactic to encourage higher bids. Agents may also provide false reassurance about aspects of the property or the buying process.
To navigate this, ask for evidence of other offers and verify claims independently. Remain sceptical and seek confirmation of any assertions made by the agent. Trust your instincts; if something feels off, it likely is.
You always have the option of changing your estate agent.
Evaluating property: beyond estate agent presentations
Wide lens photos and property staging: wide lens photos and property staging are common techniques used to make properties appear more appealing. Wide lens photos can make rooms look larger or hide flaws.
Buyers should focus on structural and practical elements rather than aesthetics. Visit the property in person and consider arranging a professional survey to uncover any issues that may not be immediately visible.
We have a more detailed article in which we discuss the house buying process.
Assessing the true value of a property: determining a property's true value requires looking beyond the asking price. Research sold prices of similar properties in the area to gauge the market value.
Pay attention to factors like location, property condition, and local amenities. The asking price is often set with negotiation in mind, so there may be room for negotiation.
Why estate agents push their mortgage advisers
Estate agents often have partnerships with mortgage advisers and may push their services. While these advisers can be helpful, they may not always offer the best or most cost-effective mortgage options.
Compare offers from multiple mortgage brokers to ensure you're getting the best deal before opting for the estate agent's mortgage adviser.
It will be helpful for you to know about the various types of mortgages available in the UK.
Deciphering hidden fees and charges
Hidden fees and charges can affect the overall cost of buying a property. These might include solicitors' fees, survey costs, and mortgage arrangement fees.
Buyers should request a full breakdown of all costs associated with the property purchase. Identifying these fees early in the process can prevent surprises later on.
Conducting your own research
Researching comparable properties involves examining sold prices and current market listings in your desired area.
Online property portals can provide valuable insights into the local market. Consider factors like property size, condition, and location when comparing properties. This research helps in determining what a fair price for a property might be.
Staying informed about local market trends helps in making an informed decision. Look for information on how long properties stay on the market, price trends, and the demand in the area. This information can be found through local estate agents, online property databases, and housing market reports.
As a buyer, you must know about estate agents' legal obligations to buyers.
For sellers: overpricing and undervaluing tactics
Estate agents sometimes employ tactics to manipulate property prices.
As a seller, you might encounter agents suggesting an inflated value to win your business. Conversely, undervaluing occurs, aiming for a quick sale.
Overpricing your home
When you're choosing an estate agent, you'll likely get several valuations for your home, which can vary significantly. Avoid selecting the agent who gives the highest estimate, as this can be a tactic to lure you in.
Pricing your property too high can lead to prolonged market time and necessitate price reductions, which can deter potential buyers.
Undervaluing your home
Watch out for estate agents who undervalue your home to secure a quick sale and earn their commission. This could mean you miss out on significant value.
Research local property values to compare. Consult multiple agents and consider independent valuations to ensure a fair price.
How to set a realistic asking price
Setting a realistic price demands a balance. Too high, and your property lingers on the market; too low, and you lose value. Begin with a comprehensive analysis of similar properties in your area. Consider recent sale prices and market trends.
Be open to adjusting your expectations based on factual data. A well-set price attracts genuine interest, leading to a successful sale. Do your own research and obtain multiple valuations.
Marketing your property effectively
Enhanced marketing packages
Estate agents offer various marketing packages, some promising wider exposure. These 'enhanced' packages often come with higher costs.
Understand what you're getting. Does it include professional photography, virtual tours, or premium listing spots? Weigh the cost against expected benefits. Sometimes, standard marketing suffices, especially in a strong market.
Assessing the need for premium listings
Premium listings promise top spots on property search websites. They can increase visibility, but are they necessary for your sale?
Consider your property type and location. In a high-demand area, a basic listing might suffice. For distinctive properties, a premium listing could attract the right buyers.
Estate agent contracts
Long agency agreements: estate agent agreements can be lengthy and complex. Pay close attention to the duration of the agreement. A long contract could lock you in, even if you're dissatisfied. Look for fair terms and the ability to switch agents if necessary. Understand termination clauses and any associated fees.
VAT-free commission fees: some agents offer 'VAT-free' commission, seemingly a saving. However, examine this closely. Understand the total fee you'll pay. Compare with other agents’ fees, including VAT. Sometimes, a lower headline rate isn't the cheapest option. Ensure transparency in all financial aspects.
Dealing with multiple offers
How to handle bidding wars effectively
Bidding wars can escalate property prices. While enticing, they require careful navigation. Your aim isn't just the highest price but also a reliable buyer. Assess each buyer's position. Are they chain-free, or do they have a mortgage in principle? A lower offer from a more secure buyer might be preferable.
Strategies for choosing the right buyer
Choosing the right buyer isn't solely about the offer price. Consider their circumstances. A buyer without a chain or with pre-approved financing is less likely to pull out. Communicate openly with your agent about priorities. Whether it's a quick sale or maximum price, your agent should understand your goals.
Legal and ethical considerations
Do estate agents lie?
In the UK, estate agents are legally bound to uphold honesty and accuracy in their dealings. The Consumer Protection from Unfair Trading Regulations 2008 explicitly prohibits misleading actions or omissions that can distort the decisions of the average consumer.
This legal framework makes it clear: estate agents cannot lie or provide false information about a property. If an agent is found guilty of misrepresentation, especially if it leads to a sale, it can be classified as a criminal offence, subject to legal proceedings and sanctions.
Legal boundaries and consumer rights
Estate agents must operate within the confines of the Estate Agents Act 1979, ensuring professionalism and fair play.
The Property Misdescriptions Act 1991 is particularly important as it requires accurate and truthful descriptions of properties. Furthermore, the Consumer Rights Act 2015 reinforces these standards by mandating that all information provided to consumers, including property details, must be clear and accurate.
If a buyer feels misled or deceived by an estate agent, they are empowered to seek legal redress. This can include complaints to regulatory bodies or even court action in extreme cases.
Actions to take if you suspect unethical behaviour
If unethical behaviour by an estate agent is suspected, there are several steps you can take. Begin by addressing the issue directly with the estate agent or their agency.
If this doesn't resolve the issue, escalate the matter to the Property Ombudsman or the National Association of Estate Agents. These bodies can investigate the complaint and impose sanctions or recommend further action.
In cases of serious misconduct or where legal boundaries have been crossed, seeking professional legal advice is advisable to understand your rights and the best course of action.
Protecting your interests
To safeguard your interests, vigilance and proactivity are paramount. Always cross-check the information provided by estate agents. Stay informed about the local property market and legal obligations involved in property transactions.
Be cautious and seek second opinions or independent verification of details where necessary, especially regarding the property's condition, value, or legal status.
Independent legal advice
Independent legal advice is a cornerstone of a safe property transaction. A qualified solicitor or conveyancer can offer unbiased guidance, ensuring that your interests are protected throughout the process.
They can help interpret complex legal documents, identify potential issues in contracts, and provide advice on how to proceed. This advice is particularly valuable in transactions involving large sums of money or legal complexities.
Choosing the right solicitor for conveyancing
When choosing a solicitor for conveyancing, find someone experienced in property law. Look for professionals with a strong track record and positive client testimonials. Personal recommendations can also be a reliable source.
The ideal solicitor should be transparent about their fees, readily available to answer your queries, and committed to acting in your best interest. Confirm their accreditation with relevant legal bodies to ensure their legitimacy and expertise.
FAQs
How can I ensure I’m getting the best deal?
Securing the best deal in property transactions involves research and negotiation. Start by knowing the local market. Compare prices of similar properties. Don’t hesitate to negotiate estate agent fees.
Be clear about your maximum budget but avoid revealing it upfront. Consider hiring an independent mortgage adviser for unbiased mortgage advice. Knowledge is your ally. Ensure every decision is informed.
What red flags should I look out for in an estate agent's behaviour?
Be wary of estate agents who exert undue pressure. This includes rushing you to make decisions or sign contracts.
Watch for signs of false reassurance about property aspects.
Transparency issues, such as vagueness about fees or not providing clear answers to direct questions, are red flags.
Be cautious if they discourage you from seeking independent legal or financial advice.
A common tactic used by estate agents to persuade you to sign with them is to claim they have potential buyers already interested in properties like yours. However, since most buyers begin their search online on platforms like Rightmove and Zoopla, your property will be visible to all interested parties as long as it’s listed on these sites, regardless of which agent represents you.
If your home isn’t selling, be cautious if an agent suggests spending extra on additional advertising. Consider why they haven’t maximised their existing marketing efforts and whether any extra fees are refundable if your property still doesn’t sell.
There have been claims of mortgage brokers and estate agents working closely. Exercise caution in such situations.
How often should I communicate with my estate agent?
Regular communication with your estate agent is necessary. Aim for a balance – not too frequent to seem overbearing, but enough to stay informed. Weekly updates are a good standard. Ensure communication is clear and concise. Always document significant discussions.
If you're selling, request feedback after viewings. If buying, clarify doubts promptly. Good communication helps keep everyone on the same page.