I have worked within the estate agency industry since 1997. Here, I reveal eight secrets that traditional high street estate agents don't want you to know...
1. You think estate agents are there to sell houses, right? WRONG!
Estate agents will tell you that they want to sell houses. But in actual fact, this is not their number one goal. All estate agents really want to do, is persuade you to list your property with them - that to them, is more important than actually selling the house. This is why they employ 'listers' or 'valuers', which are generally the highest paying jobs within an estate agency. Listings are more important than sales.
In fact, have you ever noticed that if you have a house to sell, that when you register on an agents' mailing list that would be able to sell your home, you get an 'extra special' service and 'exclusive' phone calls about houses that are yet to hit the market?
That's not because they are trying to convince you to buy a house. It's because they are trying to convince you to put your house on the market with them!
2. All individual agents are paid commission to sell houses, right? WRONG!
Many agents who come out to value your home, are paid commission on getting you to list your home with them. This means that they will do 'whatever it takes' to get you to list with them. Anything from overvaluing, to telling you that there is nothing wrong with your property, when they might have spotted something, both of which hinder actually selling the property.
3. You think agents are there to value your home, free of charge, right? WRONG!
'Valuers' aren't there to value your house. They are there to get your property on the market. That is why they offer it for free, so it gives them a chance to 'get a foot in the door'. And because it is free, it is also the reason that high street agents charge so much when you do actually sell your home - because they have to cover the cost of all these free valuations.
4. Agents come out and will value your home as accurately as possible, right? WRONG!
Agents will 'value' your home to convince you to use them. So, some agents may well value the property higher than they actually think it is worth, just to convince you to use them. Now, this might sound daft, because they are going to find it harder to sell, but what they do then, is sign you up to a 12 or 16, or sometimes even a 26 week contract, so that they can 'work on you' to bringing your price down to what the other agents valued it at. It is the oldest trick in the book.
5. When an estate agent tells you they have 'buyers on their mailing list for your home', they're telling the truth, right? WRONG!
The 'ready-made buyers' that an agent 'has' for your property when they are valuing probably do exist. But they are rarely, if ever, actually known to the person valuing your house. The agent knows though, that if they get your home on to Rightmove as quickly as possible, then Rightmove will generate phone calls from potential buyers - in fact, it generates far more interest than one agent could ever generate with their supposed 'mailing list'. But agents won't tell you this, because the general public would start to ask how a high street agent can justify their fees, and they wouldn't be able too, so fees would eventually have to start coming down. And the high street agents don't want that, do they?!
6. Estate agents put your property in newspapers to help you sell your home, right? WRONG!
Newspaper adverts aren't used to help agents sell houses. There are two main reasons for newspaper adverts - firstly, of course, it is to encourage you to put your house on the market with that agent. And secondly, it is 'to get that vendor off my back'. If a vendor is pestering the agent, then the easiest thing to do is to tell them you'll advertise it in the paper, rather than perhaps addressing the real issues as to why the property isn't selling.
7. Those 'hot buyers' that the agent has said they will get round before the property goes on the market are genuine, right? WRONG!
When the agent tells you they have 'a number of buyers for this property', it has been known that agents will employ 'professional viewers' to go and view the property, who, unsurprisingly, turn out not to be interested, but the prospective seller has been so impressed with the agent, that they get the instruction on their books. This was something that supposedly happened in the 'good old days', but if it could happen then...
8. Agents are interested in getting you the best price possible for your home, right? WRONG!
Estate agents aren't interested in getting you the best possible price. They are just interested in getting you to agree to a sale. There are actually estate agent courses that 'teach' agents how to convince an owner to accept a lower offer than they want!
If you think about it, an average house sale of say £240,000 with a fee of say 1.9% means that if the agent receives an offer of £230,000 for the property and you accept it, they will earn £4,370. If they get you an extra £10,000, then you are going to be quid's in, but the agent is only going to earn another £190 - it's hardly worth the effort for them to try and get a higher price. They would rather convince you to accept a lower offer, so they can get their sale registered in their figures and move on to the next one.
To combat this, you can use a fixed fee agent, who has charged a little bit up front as well. They are motivated to sell the house, because they are still earning a flat fee on the sale, but they don't need to sell the house, or therefore convince you to accept an offer that you don't want to accept. In fact, if they are 'advising' you to accept an offer, it is not because they are trying to earn a big fat fee from you and probably because they feel it is the correct advice.
Believe it or not, there are also training courses for estate agents on 'how to persuade someone to pay a higher fee'. Absolute scandal. No industry we know just makes up the fees or the prices as they go along.