Why we WON’T all be selling privately in the near future
Monday, January 25, 2010 by Ed Mead
There has been plenty of press over the weekend and Twitter chat about how the Telegraph’s interview with Sarah Beeny points to the demise of the estate agent. To be fair she opines that 50% of all property sales will be done privately by 2015 so that would seem to give half of us a stay of execution at least.
Sarah has obvious charisma and appeal and it’s all too easy to denigrate agents and jump on the bandwagon. I wish her all the best with her site which is well thought out, slick and deserves to carve out a niche for itself. Private sales are not new and have in the past been the preserve of the bargain hunter, either buyer looking to buy without competition, or seller trying to avoid paying an estate agency a fee.
The common link here is “bargain”.
Just for a minute picture a future with out estate agents. When your heart has slowed down from the sheer excitement of it try to imagine how you, as a seller, might work out how much your property is worth. In the absence of estate agents you’ll look, like your mortgage valuer, at historical perspective and eventually opt for a figure, for without professionals (bear with me here) how are you going to gauge where the market is. If you choose to simply believe what you read in the newspapers you’ll probably get it wrong. If there’s ever been a country with a multitude of different micro markets this is it. If you want an example of how difficult it is to assess value try using a blunt tool like zoopla.co.uk.
As sellers, and this is true of the majority of Brits, we are NOT all consummate salespeople and if we set a price [remember in this scenario without agents it’s a backwards looking price] the chances are we’ll accept the first offer at that price and then stop showing it. This has all sorts of issues insofar as almost 40% of all deals fall through, but ignore that for a moment and look at the bigger picture.
This Country has become strong and vibrant to some extent off the back of a vibrant housing market. The reason for this is because any property being sold is valued forward. A professional estate agent will assess conditions, number of buyers and trends and will see how far he can push the value in order to do the best for the seller. This has worked for many years and because we’re a nation that enjoys welcoming foreigners it’s an international market too, so there are many factors to consider. Not only will a good agent have a significant list of buyers and value forward, but they’ll assess bids as they come in, qualify buyers and determine whether they’re time wasters as so many are. But most importantly they'll decide if a property needs to go to best bids thereby increasing the potential for upside for the seller, who is the one paying for the service. In other words the property will be sold ultimately for the market value, not to the first person that offers an abitrary asking price.
All the above add value, clearly and demonstrably.
The idea of saving money always appeals and is particularly meaningful in a difficult economic environment such as we have at the moment so it should be remembered that estate agents are in a service industry and that our fees are always negotiable. Negotiable doesn’t always mean lower by the way, incentivised fees so the owner and the agent win at a higher price, and share the pain if it’s lower, are always worth considering.
If the British public have had so many problems negotiating fees down, and we are currently the cheapest Country in which to sell property in the developed world, so let's not run away with ourselves, you have to wonder how they’re going to get on negotiating the sale price of their biggest asset face to face with a buyer. The idea of anyone seriously considering selling their property without professional advice is ludicrous, and moreover I’m guessing that anyone currently selling on a private website has arrived at their price by first asking the opinion of local agents.