Beware the Greeks bearing gifts!

Last Monday morning, I was in my regular team meeting planning the days activities and looking at what was in the diary. A particular valuation appointment that evening caught my eye. It was on a road in Cheadle, close to the village that we had not had a recent instruction, but historically had enjoyed great success and the properties traditionally sold very well

On doing my usual preparation, gathering comparable evidence of recent sales and current available properties, I also like to check historical data as I was pretty sure we had sold the property to the current owners and sure enough discovered we sold it to them in 2003, fifteen years ago, so I was feeling pretty confident I would have a very good chance of securing the instruction.

I rocked up for my valuation later that day, which seemed to go very well, the owners remembered me, not sure how I was a good deal slimmer and had more hair back then! we chatted about their onward plans, I listened to their requirements and expectations from an agent and I gave my presentation, proposed marketing strategy to achieve the best price and finally my valuation – £265,000 and fees.

At this point my heart sank as one of the sellers uttered the immortal words. “We have had two other valuations, one from X (a well known online budget listing agent) and the other from Y (a corporate agent) in the village as we wanted to get a good cross section of opinion on price and fees”

You are too expensive!

I knew what was coming next! “We think your fees are too expensive Maurice. You are the dearest of the three. Is there any movement at all?” Now bear in mind I had already discounted our standard fee of 1.25% to 1% because they had bought from us previously, I could not believe I was being asked this!

What fees have you been quoted? I asked.
£849 including VAT one of the sellers shouted, almost leaping out of their seat with excitement!
And the corporate? thinking they won’t be that cheap
plus VAT? I returned weakly for no particular reason as I was still reeling from shock that a reputable, well established corporate agent was offering to sell someones house for 0.5%!

I was running out of cards to play, so I played my last hand ” Can I ask what the other agents have suggested price wise?”

“Well” said the lady ” They both suggested £250,000!” What the ….!

I quickly grabbed a sheet of paper from my pad and started to scribble some figures down. “Here let me show you something” Ok – so you sell with budget agent X for £250,000, they will already have taken their £849, so even assuming it sells given their 50% success rate that will leave you with £249,151 in your pocket.

Agent Y sells it also for £250,000. Their take will be 0.5% £1250 plus VAT taking it £1500, so that will leave you with £248,500.

I have suggested marketing the property at £265,000, if I sell it for that, it will cost you £2650 plus VAT – a total of £3180, which still puts £261,820 in your pocket. That’s an extra £12,669 more than agent X would give you and an extra £13,320 more than agent Y!

The room went silent for a minute but the penny must have dropped as the sellers looked at each other and one said ” And you would do this on a no sale no fee basis” Whilst not a fan of this either, I was confident we would sell the property, so backed myself and my team and said absolutely.” Ok we will go with you” Hallelujah!

Sellers seduced by slick advertising

The point to this post, oh by the way we sold it for the full asking price in 48 hours!! is so many sellers are fixated on the fee they are paying to the agent. The cheap budget model keep making out, there is nothing to selling a property, anybody can do it – well of course they can when something is being given away!! But the really important fact remains, the cheapest agent is the one who puts the most money in the sellers pocket at the end of the transaction, yet bizarrely up and down the country many sellers are still being seduced by slick advertising into thinking they are getting a good deal paying cheap fees, yet potentially costing themselves thousands on their bottom line and often being left with no proper, experienced sales management to get the transaction over the line.

Beware the Greeks bearing gifts as the saying goes

The Property Ombudsman Chartered Trading Standards Institute