Estate Agents Tricks - What to Watch Out for When Buying or Selling a House
Estate Agents - Don't Trust Them?
This might be quite a controversial statement to make, and it’s certainly not my intention to suggest that they are dishonest. They just have they put their own interests first (who doesn’t?), and then their client, the seller. So, if you are the buyer you are on the bottom rung and even if you are a seller, you have to consider when estate agents are putting their own interests ahead of yours. There’s quite a lot of tricks they may play to get the most out of you, and the aim of this article is to make you aware of some of them so you can better look out for your own interests.
Selling a House
What the estate agent wants is for you to sign up exclusively with them to sell your house, then they want to sell your house quickly so they can get their commission with minimum time and effort expended on their part. After all the longer it is on the market the more they will spend in showing people round and promoting it. It is suggested by many that both the agent and the seller want to sell the property for the best price, as the agents commission will be higher. This isn’t necessarily the case however, as agents will often accept a slightly lower offer to sell quicker. Let’s face it, on a £200,000 house, with a 2% commission, they will get £4,000. Now selling it for £205,000 will mean £5,000 more for the seller, but only an extra £100 for the agent. It just isn’t worth it for them to hang on and try to sell it for a bit more. In fact, studies have shown that when estate agents sell their own houses, they get several percent more than when they are selling other people’s houses. So don’t think the seller and the agent’s interests always coincide.
So estate agents will put a quick sale over a higher sale price. They might do this in one of two ways. They may value your house low to get a quick sale, particularly if you’ve already decided to go with them. If however they know you are getting quotes from several agents, they may initially value your house high to get you to go with them, then put you under pressure later to reduce the price, or accept an unreasonably low offer.
So that’s a pretty standard box of tricks. Some of the darker arts practised by some- but obviously not all- estate agents include:
- Not passing on details of all offers.
- Fake bookings/viewings to make it look like they are doing a good job
- Making up really low offers that they know you won’t accept, so you think the house is worth less than it is and will be more likely to accept a slightly higher (but still low) offer when it comes.
- Giving you the cold shoulder if the house doesn’t sell after an initial period of activity – they won’t actively promote your house or even offer you advice on how to improve your chances
Estate agents may also decide at some point that they want to get rid of you. Perhaps your property has been on with them for ages and it dragging down their portfolio in their eyes- whatever, the 'honeymoon' period is off! They may simply do all they can to get rid of you- not turn up to viewings, not do any promotion or be unpleasant about your property. This is definitely the time to swap agents!
Buying a House
The tricks estate agents sometimes employ with sellers is nothing compared to the lengths they will go to try and get as much as they can out of potential buyers. Here are some of the tricks they may employ:
- Lying! Many estate agents will tell you anything to get a sale.
- Withholding important details re the house until you make an offer – such as if the house is a repossession, or if it is made of non-standard materials (such as concrete – this happened to us).
- Assume all first offers are opening bids and that you are willing to go higher
- Exaggerate interest in the property by others so you will bid higher
- Make up fake offers to try and get you to bid higher (illegal in many countries including the UK, but is still widespread).
- Keep promoting property after they’ve accepted an offer
It really is buyer beware and estate agents will tell you anything to get you to buy and will confuse and hassle you as much as they can.
Your own Experiences
Have you experienced any of these estate agents tricks, or been the victim of any we've not mentioned? If so, tell us your experiences by leaving a comment below.