Estate Agents: what do they do?

[trendie]

An acquaintance of mine, who lives in Birmingham, has had her house on the market for a few months.
Recently, she contacted the agents as she was not getting any viewings. The recommendation was to lower the asking price.

This got me thinking about estate agents in general.
What exactly do they do for their 1.5%? (plus conveyancing fees from solicitors)
They seem to require no formal training or extended qualifications, yet seem to "earn" substantial returns.

 

[neil]

An acquaintance of mine, who lives in Birmingham, has had her house on the market for a few months.
Recently, she contacted the agents as she was not getting any viewings. The recommendation was to lower the asking price.

This got me thinking about estate agents in general.
What exactly do they do for their 1.5%? (plus conveyancing fees from solicitors)
They seem to require no formal training or extended qualifications, yet seem to "earn" substantial returns.

They do nothing you cannot do. I am lucky enough to be buying a new build having let the builder market my house, they pay all fees, thus I am happy with it.

 

[Ambrose Ackroyd]

F'all

 

[timsk]

What exactly do they do for their 1.5%? (plus conveyancing fees from solicitors)

Hi trendie,
They're salespeople.
Good ones sell property, bad ones don't. In a bull market, the bad ones can prosper along with the good ones. In a bear market, they go to the wall and only the good ones survive. Of course, if a vendor wants too much money for their property, even the best of the best won't be able to sell it.
Tim.

 

[scose-no-doubt]

They provide a go to point for buyers/sellers and letters/tenants and concentrate the market. Other than that I don't really know. Personally, I think that they're obsolete what with the internet and all.

 

[daroth]

Not sure what the rules and stipulations are in the UK but in the USA realestate agents are required to take classes, get a license, have a certain ammount of training, etc. A person could sell their property themselves but agents are there to give that extra push and utilize their resources.

I wish your friend luck in selling their property.

 

[DashRiprock]

most of them have white cars and wear winklepickers LOL

posh haircuts too

 

[robster970]

In the UK they are first class w@nkers. All of them.

 

[Atilla]

An acquaintance of mine, who lives in Birmingham, has had her house on the market for a few months.
Recently, she contacted the agents as she was not getting any viewings. The recommendation was to lower the asking price.

This got me thinking about estate agents in general.
What exactly do they do for their 1.5%? (plus conveyancing fees from solicitors)
They seem to require no formal training or extended qualifications, yet seem to "earn" substantial returns.

1.5% too high. We are paying 1.35% for first 6 weeks and if they don't sell dropping to 1.25% for another 6 weeks. Then after 12 wks plan to give it to another agent. For .95%. This agent was hungry for business but went with the more established one.

There are also internet based agents now like BlackHen who charge 2-3K approx half what the estate agents charge.

All searches done on internet now anyway. No body sends leaflets or brochures.

Your friend should also consider http://www.housedoctor.co.uk/ I reckon their consultants are good. You may pay couple of hundred or a grand but I'm sure your house staging will work wonders and one can recoup monies in sale and better value.

 

[0007]

An estate agent's usefulness is inversely proportional to that of a doctor's. What I mean is that most doctors are very good and a few are useless, whereas with estate agents it's the other way round.

So long as you remember that estate agents are supposed to work for the vendor then you have a head start on most people. The best agent I ever used got me a better price at the top of the market than even I expected because he took the trouble to find out about the purchaser's circumstances and made sure he paid full whack!

As a purchaser, if you know the vendor's estate agent is useless then you are in a much better position to get a more favourable price yourself because all the agent is interested in is getting a sale and even if he sells at a low price he still gets the majority of his commission. Perhaps there is some connection here with what brokers do?

What does annoy me about estate agents is that they charge percentage fees but do more or less the same work for similar houses regardless of differing values -- and perhaps in the northerly latitudes of UK (ie. north of Watford) where houses are generally cheaper and more difficult to sell in the less affluent areas -- the estate agent probably has to work harder.

Overall, I have just about as much sympathy for estate agents as I do for politicians, brokers, bankers, used car salesman etc etc. But they all have their place and the secret is knowing how to use them!

 

[trendie]

timsk: I don't see where the "selling" is happening.
If someone wants to sell, they have already made the decision to sell before calling an agent.
If someone wants to buy, they are not going to be badgered into buying something they don't want.
(they may get pushed into making a quicker decision by ploys such as being told another party has shown interest, but that's not the same as convincing someone to buy something they wouldn't normally buy.)

Their interest is in marketing the property at a price that generates sufficient interest. But a few thousand less, and they're not going to fuss about, since if they're getting 1% or so, it's just a few quid. eg, encouraging a seller to reduce a 200K house to 190K is just £100 difference.
Either way, the agent gets 1900 instead of 2000, for example.
conversely, they aren't breaking sweat trying to get a better price for the vendor either.
An extra 10K onto the house sale price, and they collect an extra £100! they're just not going to bother.

Admittedly they have overheads, such as offices, and white company cars and shoes, and hair doesn't cut itself, but still, it's a hefty mark-up for what, I believe, is more about acting as intermediary than actually selling.

s-n-d: your point, is in essence, my point too. with the wealth of online data, surely the activity of an estate agent is more middleman than actually selling. and pretty mundane, undemanding middlemannering at that, too.

daroth: the only association I can find is the NAEA. and the courses seem all to be for 1-day! so, hardly a trial.

atilla: I told her she would be better off renting it out until she could get a better price.
the housedoctor site looks good.

 

[timsk]

timsk: I don't see where the "selling" is happening.
If someone wants to sell, they have already made the decision to sell before calling an agent.
If someone wants to buy, they are not going to be badgered into buying something they don't want.

Hi trendie,
Allow me to explain . . .

"If someone wants to sell, they have already made the decision to sell before calling an agent."
I don't know about you, but every time I put a property on the market, I line up at least 3 agents and I go with the one that I think will sell my house the fastest for the most amount of money. Let's call him agent A. The two that don't get my business lost their first and most important sale: selling their services as agents to me - the prospective vendor. Let's call them agents B and C. Cut it any way you like - the bottom line is sales.

Agent A that gets my business has made their first - and most important - sale. If all the prospective venders go to agent A, then agents B and C will go out of business, because they've got nothing to sell. If s/he can sell their firm's services to prospective vendors better than the competition, s/he doesn't have to worry about selling the actual property. Prospective buyers will have to go to agent A - who will make money - because s/he's got all the property.

"If someone wants to buy, they are not going to be badgered into buying something they don't want."
Agreed, but good salesmanship isn't about badgering someone to do something they don't want to do. On the contrary, that's bad salesmanship! A really good agent spends time finding out exactly what the applicant wants and and then finds the property that fits the bill. Of course, not everyone has the vision to see that some old tumble down ruin is actually their perfect home. The skill of the agent is in pointing out the things that they don't have the vision or foresight to see for themselves. And the leaky tap that really put them off isn't a problem at all - they can have that fixed in a jiffy. (You'd be surprised at the number of people who don't spend hundreds of thousands on an otherwise perfect property because of something as trivial as a leaky tap.) In this regard, a good estate agent is like any other salesperson in any other industry. They're problem solvers. When their colleagues are moaning that times are tough and the market is flat, they're out selling property, month in and month out.
Tim.

 

[Atilla]

Hi trendie,
Allow me to explain . . .

"If someone wants to sell, they have already made the decision to sell before calling an agent."
I don't know about you, but every time I put a property on the market, I line up at least 3 agents and I go with the one that I think will sell my house the fastest for the most amount of money. Let's call him agent A. The two that don't get my business lost their first and most important sale: selling their services as agents to me - the prospective vendor. Let's call them agents B and C. Cut it any way you like - the bottom line is sales.

Agent A that gets my business has made their first - and most important - sale. If all the prospective venders go to agent A, then agents B and C will go out of business, because they've got nothing to sell. If s/he can sell their firm's services to prospective vendors better than the competition, s/he doesn't have to worry about selling the actual property. Prospective buyers will have to go to agent A - who will make money - because s/he's got all the property.

"If someone wants to buy, they are not going to be badgered into buying something they don't want."
Agreed, but good salesmanship isn't about badgering someone to do something they don't want to do. On the contrary, that's bad salesmanship! A really good agent spends time finding out exactly what the applicant wants and and then finds the property that fits the bill. Of course, not everyone has the vision to see that some old tumble down ruin is actually their perfect home. The skill of the agent is in pointing out the things that they don't have the vision or foresight to see for themselves. And the leaky tap that really put them off isn't a problem at all - they can have that fixed in a jiffy. (You'd be surprised at the number of people who don't spend hundreds of thousands on an otherwise perfect property because of something as trivial as a leaky tap.) In this regard, a good estate agent is like any other salesperson in any other industry. Their problem solvers. When their colleagues are moaning that times are tough and the market is flat, they're out selling property, month in and month out.
Tim.

Similar experience to some extent - we've had three agents and B & C valued at silly prices with properties around Redbridge and other streets a mile off. Big difference in price along where we are.

Also - I'm thinking if you value this property at say £300K and another agent values at £400K then obviously he sees value in the property and will push for it. Agent who values it cheap doesn't see it and not likely to put the effort in.

At the end of the day it is buyer and seller who negotiate but few word of wisdom in right places - I agree with Tim, makes a big difference. He also knows what you are prepaared to accept and can encourage and point things out to tempt buyers.


Finally - at present there is a shortage of good properties - more properties in an agents books then greater the chance of selling some and busier that agent is.

I think 2% is way too high for selling property though. Must get that down to 1-1.5% for sure.

 

[Aaliya]

With the advent of the net, the role of the estate agent has become less important. See before the major property sites came about, we all used to rely on the local press and for sale board advertising to bring in potential buyers. But now that most of use the net to search properties, this can be achieved by yourself (as long as you can price the property accurately).

Aaliya