A real estate agent is worth their weight in gold, argues Barry Cashin.
Since mass use of the internet has come about, there has been a growth in the number of people selling their homes via alternative means to the high street estate agent. Despite this trend, the vast majority of property sales are still, fortunately, handled by professional estate agents - and indeed the industry itself has made good use of the web as a vital marketing tool.
Despite the protestations of some inexperienced and fledgling 'sell-your-home-quick' companies and certain sectors of the media encouraging people to go it alone to save money, a real estate agent is worth their weight in gold for the following reasons:
- they know their market inside out
- they are aware of the types of properties in an area, the situations of buyers looking for them and the typical values
- they have their finger on the pulse of local market conditions which may be completely different to the national picture
- they have an immediate, live register of interested buyers seeking property
- they know how to pick up and exploit buying signals better than the layperson
How estate agents earn their money
What a lot of sellers faced with the prospect of ultimately paying a significant sum of money to an agent do not know is that there is much more to selling a property than merely taking a photograph, placing an advertisement in the paper and erecting a 'For Sale' board outside.
The reality is that the physical process of selling a property is relatively easy if the agent has sufficient buyers on their register. The real work of the true, professional estate agent begins when a sale has been agreed: keeping all parties informed, progress chasing and managing often tenuous chains. That is when the agent earns their crust - where one can distinguish between a quality agent and someone who is merely good at matching buyers to properties, which is a completely different prospect altogether.
Skills they need - what makes a good agent?
An estate agent can be as active or inactive as the market and their need to earn income dictates. However, all good estate agents should possess most if not all of the following attributes:
- communication skills - letter writing, marketing, selling
- progress chasing - co-ordinating and keeping together complex chains at each of several stages
- tenacity - the ability to deal with sometimes difficult solicitors, surveyors and other professionals
- peacemaker - placating angry vendors and buyers for whom the agent is always the focus of most blame if things go wrong
- diplomacy - sometimes telling people bad news
- keeping everything progressing smoothly through to exchange of contracts and ultimately, completion
- organisational skills - keeping appointments, making time for clients
- the memory capacity of a PC - to remember all of the above
- acting as a marriage guidance counsellor - keeping calm when everything around you is collapsing
How to choose the perfect agent for you
Take a look along in any town centre and you are bound to see a host of estate agents, each vying for your business. But which one should you choose? How do you know which one is best suited to sell your home and how do you know you can trust them?
- Choose a tried and trusted, long established agency selling property in your locality, preferably one that has been recommended by someone who has used them before. PrimeLocation's estate agents search is an excellent way of linking to agents in any postcode area throughout Britain.
- Match the agent to the market. It is no good choosing an agent dealing with the high end luxury market to sell an average terraced home, and vice versa.
- If the agent has been established for a great many years, it is a sure sign that they have been doing something consistently right over that time. That said, there is nothing wrong in selecting a newly-formed company as it may be staffed with a breadth of experience, but do your research first. It is no good selecting an agent with little experience just because they charge a much lower fee. As in all things, quality often comes at a price. PrimeLocation's register of more than 10,000 estate agent branches gives a wide spread of choice covering the entire of Britain.
- Test the agent before engaging their services by acting as a prospective purchaser. Make a checklist of how well you are welcomed, how promptly, enthusiastically and professionally are you treated and how thorough the questioning is of your requirements and needs. If you leave with a positive list of all boxes checked, you can be sure if you instruct that agent to sell your home, your buyers will be similarly treated, qualified and handled when introduced to your property.
- Look for an office buzz. A busy agent's office will be a hub of activity so watch each office from the street and assess the mood before you walk in. Does the office look well organised and professional? Is each negotiator looking busy on the telephone or attending to clients - or are they just leaning back in their chairs looking at their watches, bored?
- Opening hours are crucial. As a seller, you will want to utilise all marketing opportunities possible to sell your home. Agents offering the longest opening hours should be high on your shopping list of requirements.
- Website presence. Aside from the agent's own website, agents who are listed on PrimeLocation enjoy two million visitors a month searching for properties, giving sellers the broadest possible buyer base.
Selecting an agent who is member of a professional body gives consumers peace of mind. Membership means that the agent must act with probity at all times and that they are bound by strict codes of conduct to which they can be held fully accountable.
With effect from 1st October 2008, all estate agents are required to register with an Estate Agents Redress Scheme approved by the Office of Fair Trading which can investigate complaints. There are two main professional estate agency bodies in Britain:
- The National Association of Estate Agents
- The Ombudsman for Estate Agents
The NAEA, part of the newly-formed umbrella organisation, The National Federation of Property Professionals, was formed more than 45 years ago and has more than 10,000 members. Membership of the association is through a formal qualification and members must meet certain standards of performance relating to professional and ethical practice.
The OEA was established in 1998 and offers a code of practice for members and a recourse scheme for consumers wishing to complain about an estate agent whose principal, director or partner is a member of the NAEA or Royal Institution of Chartered Surveyors.
A question of fees
The key concern of most sellers, aside from achieving the right price for their property and everything going smoothly, is how much the agent will charge for their services. With property prices still historically high, the fees charged by British estate agents can seem pretty expensive at first. But if one compares them to other countries, British property sellers get a fairly good deal.
How they arrive at their fee
Agents' fees are usually dictated by two common factors: prevailing market conditions and the number of competitor agents operating in the area. Fees vary geographically in Britain from around 0.75 per cent for sole agency through to 2 per cent to 3 per cent or more for instructing more than one agent, known as multiple agency.
The job of the seller is to negotiate the lowest fee whilst attracting the keenest agent to take their property onto their register. It is a balancing act but it is perfectly possible in a climate where there are more properties on the books of agents. The key to negotiating the lowest fee is to make your property more attractive and therefore more saleable to the agent. If you have a well presented property with a quality finish in terms of décor - and if you are also fortunate enough to live in a sought after location and are willing to pitch your price realistically, most agents will be keener to accept you on their books for a more competitive fee.
When instructing an estate agent, there are usually two main terms of engagement. Both have a different fee structure and implication for the seller - but whatever terms and conditions are agreed, they should be confirmed in writing either by way of a letter of confirmation or a marketing instruction form, for the avoidance of doubt.
- Sole agency - employing just one agent to sell your property. Fees for sole agency vary but are normally the cheaper option. Where you are offering your property for sale on a sole agency basis, ensure that you and the agent are both clear about the period of agency and any termination requirements should you wish to place the property with another agent on a sole agency basis.
- Multiple agency - engaging more than one agent to sell your property. Going multiple is the most expensive option and should only really be an option if time is of the essence, or if you have been experiencing difficulty selling over a prolonged period of time selling through one agent. To ensure that you only pay one set of fees, always ensure that before instructing any agent on a multiple basis, you first properly terminate any existing sole agency agreement.
There are some other contractual terminologies sellers should also be aware of. Occasionally, an agent will offer to sell a property on a 'sole selling rights' basis. This effectively gives the agent carte blanche to sell the property and even if you sell it yourself down the line, the agent may be entitled to charge their full fee even if they did not introduce the buyer.
Another term used throughout the industry is introducing a buyer who is 'ready, willing and able' to proceed. If you engage an agent on this basis, you will be liable to pay their fee if they introduce a buyer who, for any reason along the process, pulls out of the transaction. Be cautious about signing any document containing contractual terms and if you are at all unsure about the legal or financial ramifications of any document, show it to your solicitor first.
Marketing strategies - how to ensure the agent doesn't lose interest
You want to know that your chosen agent will be working hard for you. So ask them what their marketing strategy will be. How intensively they will market your property? For example, are they members of a respected property website such as PrimeLocation, giving your property maximum exposure to buyers throughout Britain? Will they erect a prominent 'For Sale' board outside your property?
How frequent will advertising be and what methods will they use - Internet, newspapers, specialist property magazines? These are just some of the questions you should be asking your agent. If they appear unsure or hesitant in explaining their marketing strategy, then perhaps you ought to be thinking about selecting a more energetic and focused agent.
Getting the best from your agent
Maintaining a high level of contact is vital so that your chosen agent never has chance to forget either you or your property. Personality comes into play a lot in the success of any business relationship, but none more so than the property industry. If you conduct yourself in a pleasant manner and engage with your agent developing a positive rapport, it can elicit that extra ounce of effort and conviction which can make all the difference when it comes to making a sale. To help your agent further, ensure that you remain fully contactable throughout the day providing all telephone and email contact details should a buyer be found at short notice.
Striking while the iron is hot
It is often the case that great deal of energy and enthusiasm goes into marketing a new instruction for the first few days or weeks. After that and as other new instructions come along, your property, if not yet sold, can tend to fall to the back of the queue of urgency.
A good way of achieving maximum effort during the key instruction phase is to negotiate the shortest possible period of sole agency and to ask the estate agent for regular updates on marketing activity. Doing this means that you can quickly pull the plug on an inactive agent without incurring a fee if they haven't achieved a sale in a reasonable timeframe.
A good agent should want to provide viewer feedback even if there is not much positive news to report. Likewise, asking the agent to provide a regular activity update, good, bad or indifferent as part of their service is worth doing. Reminding the agent of your regular presence in the office will ensure that your particulars do not fester in the bottom of a filing cabinet.
It doesn't matter how much advice you read on the subject of buying and selling properties, it has been and will always be the most stressful thing you will ever do in your life except perhaps getting divorced, dealing with death or getting married.
However, if you utilise the full facilities and advice at your disposal on PrimeLocation, minimise the risks as much as you can and work hard to nurture a relationship with your estate agent, you will dramatically increase your chances of a positive outcome.
Some information contained herein may have changed since it was first published. PrimeLocation strongly advises you to seek current legal and/or financial advice from a qualified professional.