How to find a buyer: Sole agent versus multiple agent

John_Pierpoint

Anyone following my postings will know that I have a house, in need of renovation, to sell to the West of London.

The market seems to be steady, probably rising, the house is in a desirable road, the agents are short of property to sell BUT nobody knows if prices are going up down or sideways over the next 18 months.

I've had an interesting chat with a "young" (ie 30 something) estate agent and his middle aged boss:
"Quite frankly we have a small shop in the high street and advertise in the local paper's fancy property supplement, because that is what SELLERS expect before they will give us their business."
"In actual fact the business has completely changed in the last half a dozen years, 85% of our BUYERS come to us from the property web sites, some of them never meet us until they have made an offer, so we could operate out of "Portacabin" on the trading estate."

Against that background the Estate agents, I have approached so far, don't really know what the property is worth, within plus or minus 15,000 pounds; so what they suggest is that I give them sole agency at say 1.25% commission; they conduct a slow motion auction hopefully resulting in sealed bids from more than one potential buyer.
Ah well that would guarantee the chosen agent a commission BUT would it get me the top possible price.
Something in me says I would get better coverage and a higher price if I used two or three agents and paid the winner 2.5% commission, though the experience might be like herding cats..

Has anyone else got any thoughts on getting a top price by selecting agent(s), and perhaps competing with them yourself, by using a DIY site, like "The Little House Company" ?

Cannon_Fodder

I don't see the point of the same house appearing on Rightmove, or similar, 2 or 3 times.

Serious buyers will notice 1 entry.

I view multiple entries as "whats wrong with it, that they have to push it that hard"...! But I admit to being a cynic...

Even if there is something to the "competition" approach, the difference between "top price by multi agents" vs "best price by sole agents" might only turn out to be the 1% difference in fees...

waynehayes

To me, multiple agents on Rightmove looks like a seller desperate to sell.

googler

I've had an interesting chat with a "young" (ie 30 something) estate agent and his middle aged boss:
"Quite frankly we have a small shop in the high street and advertise in the local paper's fancy property supplement, because that is what SELLERS expect before they will give us their business."
"In actual fact the business has completely changed in the last half a dozen years, 85% of our BUYERS come to us from the property web sites, some of them never meet us until they have made an offer, so we could operate out of "Portacabin" on the trading estate."

Against that background the Estate agents, I have approached so far, don't really know what the property is worth

The background you've cited has nothing to do with the value of the house, nor with your asking price. The house is worth what someone is willing to pay for it. This has nothing to do with the agent's modus operandi with regard to what buyers and sellers expect of them.

what they suggest is that I give them sole agency at say 1.25% commission; they conduct a slow motion auction hopefully resulting in sealed bids from more than one potential buyer.
Ah well that would guarantee the chosen agent a commission BUT would it get me the top possible price.

It'll only get them their commission if they sell the house....

Something in me says I would get better coverage and a higher price if I used two or three agents and paid the winner 2.5% commission

You're expecting two out of three agents to work for you for nothing? They put 6, 8, 12 weeks of work into promoting and marketing your home, and you pay them nothing at the end of it? I know what I'd tell you if you tried to get me to work for nothing, and it probably shouldn't be said here.....

Has anyone else got any thoughts on getting a top price by selecting agent(s), and perhaps competing with them yourself, by using a DIY site, like "The Little House Company" ?

If there's any hard evidence of LHC getting as much traffic to their site, or as many sales, as your local agents, then it might be worth considering - but if you sign a sole agency, or sole selling rights contract with your agent, then you're overstepping the bounds of that contract if you list with someone else.....

Good way to gain the trust and respect of your agent - hire them, then (I assume secretly) hire someone else to 'compete' with them.

princeofpounds

As a potential buyer I'm not sure it makes much difference from my perspective.

They are right to say most people start from the websites, then go and visit the local agents with a list of 'possibles'. It's nice to have some newspaper coverage, might pull in older, non-webbie buyers.

So the key is nothing more than to get a decent service and price correctly. So you want the online listing. You want an agent who is known and who has an accessible, local office. You want them to price correctly to transact. They don't have to be great salesmen, just conscientious at engaging with buyers, getting flexible appointments, returning calls and the like. That matters far more than a flowery property description.

If you are urgent to transact, you may do better to incentivise the agent and negotiate a bonus for selling within a given time/budget. It will probably give you better EA focus for your buck than a multiagency fee, where they could lose the house at any time.

John_Pierpoint

Thanks everyone for your opinions, my problem, is that there are lots of threads on here complaining that the SOLE agent promised the earth, has achieved nothing and the seller is tied to them for at least 12 weeks. Having more than one reduces the chances of being stuck with a duff one.
I'm wondering if some of the above posters are failing to admit that they work in the house selling industry.
(By the way I would have no intention of using multiple agents secretly - that is the recipe for administrative and legal chaos)

An agent should should have several professional advantages over the individual:
1. An up to date and better knowledge of the state of the market and so be able to set an accurate asking price.
2. Possibly a source of mortgage finance, that can call the bluff of the buyer who makes an offer and then has to reduce it because of mortgage problems.
3. His list of buyers and their requirements. (In the case of a renovation - "How many bedrooms?" is not a statement of the buyer's requirements).

An agent also has some "unprofessional" advantages, but realistically these exist:
4. A powerful cartel that has largely seen off attempts to allow sellers to market their own homes for a "modest" set fee. Mr Tesco has retired from the business hurt (that must be a first.) and reduced the likes of the Little House Company to using "Fish 4 homes" as the only mainstream web site that I recognise.
5. A commission culture (kick back?) where the agent tries to take over the deal from his principal to the stage of organising HIP, EPC, Legals, Mortgage, all probably at inflated prices.

To be completely cynical, the sensible thing for a sole agent to do is to flatter the seller with an inflated valuation. Send round a few people who naturally report back that they might be interested but the price is a joke.
As the novelty of the new listing evaporates, send round the agent's favourite developer, who makes a firm but low "cash" offer, which the now desperate chain free seller accepts.
Nice work: 1.25% (say 4,000 GBP) for very little outlay, some sort of "understanding" from the buyer, with the prospect of another 1.25% (say 5,000 GBP) next spring, when the renovated house goes back on the market.

Against such a scenario, I cannot see the point from the agent's point of view of trying hard to get another 20,000 from a private individual, who might have chain problems, have problems with mortgages and retentions and generally take from here to Christmas to get their act together, all for an extra 250 quid?
That is hardly worth getting out of bed for.

As selling houses in the internet age, seems to be a matter of the best possible exposure on the web, would anyone like to comment on the cost, relationships and effectiveness of the following "professional" web sites, as different ones are championed by different agents:
Rightmove.
Findaproperty.
Propertyfinder.
Primelocation.
Globrix.
Homes24.
Fish4homes.

The house I am selling is a small Victorian detached, last redecorated by "Barry Bucknell" in the 1960's.

John

PS Perhaps I am being too hard on Estate agents, methods and their commissions?
In the above scenario the government gets 6% for doing sweet FA.

Doozergirl

I think you think too much!

I don't really see the point in going dual agent. I've changed agents once in the past but I can see that we did use a too prime agent for a house that was aspirational for most but a compromise for the clients of that agent. We sold it immediately to a local family who fell in love with it after we changed to a local agent. They saw it in the window.

Dual agency may have worked in that case as there were two potential markets there. Local and more Regional but I would never bother using two agents on the same street, plus the fee you pay is likely to be higher anyway for dual agency, negating the competitive aspect that you're looking for. They may well charge you 2% anyway.

Otherwise you pick a half decent agent that you know answers the phone, advertsises int he right places and you take a strong hand in the details, photographs etc knowing what people on here like to see - clear photos; enough to get an idea but not too many that you feel you've already viewed. Room dimensions and a floor plan.

Yes the big websites have an issue with private sellers because of the Property Misdescriptions Act, they can't police the entries and considering how unprofessional some of the agents own adverts are on rightmove, I dread to think what private individuals would come up with! If I could advertise my own property on rightmove I would, but I can't. I'd use House Network over any genuine private sale websites if I were keen to get a quickish sale - I don't bother looking at the LHC because previous searches have shown the few people advertising on there to be deluded.

googler

"I'm wondering if some of the above posters are failing to admit that they work in the house selling industry."

I'm wondering what anyone's profession has to do with the discussion. If I DID work with the industry, are you saying that renders my thoughts and opinions null and void? If you suggest that those within the industry aren't neutral observers, then I'd suggest you don't sound too neutral yourself, as in the following;

"To be completely cynical, the sensible thing for a sole agent to do is to flatter the seller with an inflated valuation. Send round a few people who naturally report back that they might be interested but the price is a joke.
As the novelty of the new listing evaporates, send round the agent's favourite developer, who makes a firm but low "cash" offer, which the now desperate chain free seller accepts."

You're just making this up as a hypothetical, aren't you? Do you REALLY think that there's at least one property developer for every EA in the country?

"In the above scenario the government gets 6% for doing sweet FA"

I don't get where the 6% comes from. Even stamp duty isn't that high.

Mind you, if the EA you use, or surveyor, or solicitor, is VAT-registered, then the government gets 15% of their fees, again for doing sweet FA.....

princessamy86

To be completely cynical, the sensible thing for a sole agent to do is to flatter the seller with an inflated valuation. Send round a few people who naturally report back that they might be interested but the price is a joke.
As the novelty of the new listing evaporates, send round the agent's favourite developer, who makes a firm but low "cash" offer, which the now desperate chain free seller accepts.
Nice work: 1.25% (say 4,000 GBP) for very little outlay, some sort of "understanding" from the buyer, with the prospect of another 1.25% (say 5,000 GBP) next spring, when the renovated house goes back on the market.

I'm sorry, but where is the evidence that this happens? I'm an EA, and this is a frankly ridiculous scenario. Yes, we have investors on our books, and yes, if I were to market a property ripe for renovation I would contact them, but if I didn't, would I be doing my job properly? It is the vendor who has the final say on whether or not to accept an offer, just as it is your call as to what the property is put on the market for. If you think a valuation is too high and the agent has inflated the price to get the business, either don't use that agent or put it on at a lower price.

For what it's worth, I don't think multi agency works that well. If you put it on at the right price in the first place, with the best agent for the location and target market, then chances are you will sell. I don't think sealed bids is working very well at the moment as it is nigh on impossible to get the level of interest required to make sealed bids work.

John_Pierpoint

In the last dozen years, I have bought two houses and sold three; only one of those was bought and sold if you see what I mean. My last transaction was a sale in 2005.
Obviously that period covers the biggest property boom that the UK has ever known.
During the last 12 years, there has been a revolution in electronic communications and the market has flipped from boom to at best stagnation at the moment.
There seems almost to be a sellers' strike currently that is causing prices to increase.
Meanwhile a lot of people have had their lives disrupted by the difficulties in selling to move.
None of the above transactions were made purely in my own interest, as I was acting as a trustee (or a representative of the bank of mum and dad)
Once again I am selling on behalf of more than half a dozen family beneficiaries in a market where I do not have a continuity of local knowledge.
So choosing a good agent, and avoiding a bad one, is very important to all of us.

Doozergirl wrote: »

I don't really see the point in going dual agent. I've changed agents once in the past but I can see that we did use a too prime agent for a house that was aspirational for most but a compromise for the clients of that agent. We sold it immediately to a local family who fell in love with it after we changed to a local agent. They saw it in the window.

Dual agency may have worked in that case as there were two potential markets there. Local and more Regional but I would never bother using two agents on the same street, plus the fee you pay is likely to be higher anyway for dual agency, negating the competitive aspect that you're looking for. They may well charge you 2% anyway.

Otherwise you pick a half decent agent that you know answers the phone, advertises in he right places and you take a strong hand in the details, photographs etc knowing what people on here like to see - clear photos; enough to get an idea but not too many that you feel you've already viewed. Room dimensions and a floor plan.

Yes the big websites have an issue with private sellers because of the Property Misdescriptions Act, they can't police the entries and considering how unprofessional some of the agents own adverts are on rightmove, I dread to think what private individuals would come up with! If I could advertise my own property on rightmove I would, but I can't. I'd use House Network over any genuine private sale websites if I were keen to get a quickish sale - I don't bother looking at the LHC because previous searches have shown the few people advertising on there to be deluded.

Some very good points here, my last sale was a modest mid six figures and when I ventured into the smart reproduction office furniture of an up market agent (You know the sort that advertise in "The Field") I got the feeling that only houses worth 7 figures would receive any sort of personalised attention from those smart young men and Sloan Ranger assistants and anyway they wanted at least 1/2 percent more than an "ordinary" agent.
Back in 1980, my employer was prepared to offer a bridging loan as part of a voluntary relocation package. Back then I was forbidden to use a sole agency BUT in those pre- electronic days each of a cluster of towns within a radius of 10 miles had its own market, served by its own local paper and estate agents , who shut up shop at noon on a Saturday. I guess the net has given the mythical agent in a "Portacabin", a reach over all of a cluster of locations.

Property Misdescriptions Act? Perhaps the time has come to insist on this and a floor plan being integrated into the HIP?,
"Unprofessional agents" surely not; In my attempt to get a feel for prices, in the road where I am selling, I have got the details of a similar house that sold in the spring. Two agents have created glossy details including a floor plan for the same house but the room dimensions differ and I'm not talking about the matter of an inch or so.:rolleyes:

Any thoughts on how to choose a half decent agent for an out of town seller?

googler wrote: »

"I'm wondering if some of the above posters are failing to admit that they work in the house selling industry."

I'm wondering what anyone's profession has to do with the discussion. If I DID work with the industry, are you saying that renders my thoughts and opinions null and void? If you suggest that those within the industry aren't neutral observers, then I'd suggest you don't sound too neutral yourself, as in the following;

"To be completely cynical, the sensible thing for a sole agent to do is to flatter the seller with an inflated valuation. Send round a few people who naturally report back that they might be interested but the price is a joke.
As the novelty of the new listing evaporates, send round the agent's favourite developer, who makes a firm but low "cash" offer, which the now desperate chain free seller accepts."

You're just making this up as a hypothetical, aren't you? Do you REALLY think that there's at least one property developer for every EA in the country?

"In the above scenario the government gets 6% for doing sweet FA"

I don't get where the 6% comes from. Even stamp duty isn't that high.

Mind you, if the EA you use, or surveyor, or solicitor, is VAT-registered, then the government gets 15% of their fees, again for doing sweet FA.....

The figure of 6% percent is the 3% stamp duty now and the 3% stamp duty when that nice young couple flip their ideal family home in 9 months time (yes I have come close to accepting an offer from such a nice young couple - the give away is when a receptionist answers the phone as "County Developments" or some such name.)

I've also sold a house where the four of us were p ussy footing about and I finally had to say "If I was in your position I would knock it down - as a Trustee I have to accept the highest offer - it is not a problem".

princessamy86 wrote: »

I'm sorry, but where is the evidence that this happens? I'm an EA, and this is a frankly ridiculous scenario. Yes, we have investors on our books, and yes, if I were to market a property ripe for renovation I would contact them, but if I didn't, would I be doing my job properly? It is the vendor who has the final say on whether or not to accept an offer, just as it is your call as to what the property is put on the market for. If you think a valuation is too high and the agent has inflated the price to get the business, either don't use that agent or put it on at a lower price.

For what it's worth, I don't think multi agency works that well. If you put it on at the right price in the first place, with the best agent for the location and target market, then chances are you will sell. I don't think sealed bids is working very well at the moment as it is nigh on impossible to get the level of interest required to make sealed bids work.

My problem is that I do not have a good knowledge of the local property market, and when I am faced by agents who suggest prices that vary by over 30K how do I pick an appropriate price? The house is a difficult one in that is is probably the last but two in the street that has not been modernised and extended.
As someone has already observed, the only real price is the one paid when two or more buyers want the same house and bid up the price.

My problem then becomes how do I get more than one buyer interested at the same time. The resulting hassle is not really in the agent's interest for the modest extra commission, better to stear buyer A at home one and buyer B at home two.

To the whiter than white estate agents posting on this thread: "I'm an EA, and this is a frankly ridiculous scenario"., I can only ask what is the difference between an antiques dealer, who knows there is a buyer of last resort on whom he can unload a piece at a low price and at least have a chance to make better money on the next transaction..
Similarly an estate agent, selling an antique house should know someone prepared to take such a property off their hands. If they don't I can suggest some contacts having placed a "2 month" advert in "The London Gazette" and received several "instant exchange" prompt completion suggestions in response. I've even got a couple of such traders round for a chat. They are pretty honest fellows along the lines of "I can offer you X00,000 in cash this month BUT there has to be a 50K contribution in it somewhere to pay my taxes and give me a living (and pay the costs of the up market sports cars they seem to drive?).
I am personally acquainted with someone, who as a side line and to give his wife an interest, aimed to "flip" two renovation properties in a good year. Last thing I heard, they were sitting on their hands thankful they had managed to pull their capital out of the last venture without too serious a loss.

I would like to share that 50K with someone who really does want to live in the family home in question.

Anyone able to explain the facts and figures behind the choice of property web sites?

princessamy86

I would help you, because I think I probably could, but the insinuation that all EAs are, at best, in developer's pockets, is frankly offensive. You're very bogged down in what may happen, what you really should have asked for is good advice for choosing an agent when you are out of town. It would have been freely given by myself and other agents who give their time for free on this board, and actually try to be helpful. I'd like to think I've helped some people out, but if I haven't, at least I've tried. For what it's worth, I earn minimum wage, no commission because we agreed to scrap it to keep the small independent business I work for afloat. I have never even been offered one of these famous brown envelopes, despite working in estate agency for 5 years now, nor has anyone else I know. People like you who come on making vague accusations that agents will immediately pull a fast one on you really get my goat!

*rant over*