The point of estate agents?

princeofpounds

A bit more:

who is right and who is wrong in terms of pricing?

There is no right and wrong. This would imply some higher principle behind pricing. There is no such thing.

Really2

SinkingFast wrote: »

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That being the case and bearing in mind the expense involved in using estate agents - what is the point of market evaluations by estate agents?

You are not paying for the valuation that is just to give you an idea at what they think it should go to market at.
Usually that is higher than what you will get as house purchasing is a negotiated sale.

In reality the costs are down to advertising the property on the high street (there office), local paper and internet.
Then the cost of them negotiating on your behalf and looking after the chain (that bit may be done better by some than others)

If you paid for the advertising they do on your own I dare say it would cost you more.

In the end they work like other agency trying to sell something on your behalf for a commission.
Don't forget if they don't sell it and you switch agents after the agreed time they dont get paid for the work they have done in most cases.

This is not pro EA but I know some one who runs one, and know it can be a fairly high cost business.

googler

SinkingFast wrote: »

Thanks for your replies. I think the point I am trying to understand is that if EAs have all that knowledge then a buyer comes along and says it is only worth XXX because that is all they can afford/are prepared to pay then who is right and who is wrong in terms of pricing?

Nobody. Without second sight or a crystal ball, the EA has no way of seeing the buyer who can't afford the asking price coming. There'll be buyers out there who have deposits and CAN afford the asking price easily, as well as those who can JUST afford it, and those who miss it by a long way. Until a number of properties have sold at below asking, there's no way to identify a trend in the market.

SinkingFast wrote: »

If a vendor is paying (in our case £4,500) in fees to an EA for this specialist service why is everyone so quick to say "It is only worth what somebody is prepared to pay for it", regardless of all the specialise knowledge an EA may have.

People here might say it quickly, but that doesn't have any bearing on what you're paying your EA and what you're going to pay your EA for. You haven't paid your EA yet, I would imagine (you will when you sell), and you're not paying him/her JUST to decide your asking price.

SinkingFast wrote: »

If I liked a house worth a million pounds and made an offer of £500k because that is all I think it is worth (knowing it is all I could probably afford) does that instantly devalue the property or would I be seen for what I really was - a dreamer?

It might devalue the property, and those around it, IF the seller accepted your offer and sold it to you for £500k, but I seriously doubt they would. I also very much doubt the selling EA would recommend a price drop based on your sole offer. If there were more offers at that level, that might be an indicator for them to take action.... but if you had £500k to spend, the most likely scenario is that you would be looking at houses priced at £500k or thereabouts, wouldn't you?

Doozergirl

JA1000 wrote: »

Auctions work well without EAs, market forces determine the price. Remember that EAs are sales people, the price they put on a property will be a good guide price but there will be people out who genuinely believe this is the price and pay it (subject to valuation) the EA then gets the commission. Good luck to them.

I think it's just a shame that more people don't realise that you don't need an EA to buy a house. I find it incredible that people think they are a necessity and pivotal in the purchase. It's like saying you need a garage to buy a second hand car, you don't and 1000's get sold every day without any problems.

Buying a house privately is even more secure than buying a car and when people realise this, if they ever will then it would be really nice to see an active private market for buying and selling.

I think that they are a necessity to some, if not most, people. For most, this is something done only a couple of times in a lifetime. Most people know very little about how to market anything for sale, let alone their own house (alebit a few agents don't appear to have a fantastic grasp either!). Many don't even understand the basic process of selling a house, what happens with their mortgage when they buy a new one etc - we do get very basic questions on here as well as the 'interesting' stuff. They don't know about what their homes value might be (and my experience of private sellers on the free websites they use, in general, is that they are really quite optimistic and perhaps not all that serious about selling - which perhaps goes without saying if they don't feel the need to market to a lot of people)

But it would be nice to see an actual marketplace of private sellers, I agree. The nature of the individual sale means that people don't join together to create it and give people somewhere to look. Someone has to create it for them and then that costs money! You can't reach a wide audience with no money and you may not fetch the best price you can when you are marketing to a very limited audience.

I'd DIY if I felt that I could reach the right person in the right time frame and end up with the right result. I don't have that confidence that selling entirely without help will work most of the time. I have sold without an EA but actually our buyers were lead to a nearby property by an EA as the result of their marketing...

googler

JA1000 wrote: »

Auctions work well without EAs, market forces determine the price. Remember that EAs are sales people, the price they put on a property will be a good guide price but there will be people out who genuinely believe this is the price and pay it (subject to valuation) the EA then gets the commission. Good luck to them.

I think it's just a shame that more people don't realise that you don't need an EA to buy a house. I find it incredible that people think they are a necessity and pivotal in the purchase. It's like saying you need a garage to buy a second hand car, you don't and 1000's get sold every day without any problems.

Buying a house privately is even more secure than buying a car and when people realise this, if they ever will then it would be really nice to see an active private market for buying and selling.

There'll also be people who pay less than the asking price and the EA gets less commission. Your point is?

You don't NEED a garage or car showroom to buy a car, but it's certainly easier when there's a selection of them in one place rather than all at their owners' houses.....

Why is buying a house privately 'more secure' ???

delmar39

I don't think agents are a waste of time. At the end of the day you get three valuations and put it on for an average of the three - this is what it's been valued at IN THE CURRENT MARKET. That's it, fact. What someone is prepared to pay for it is another matter, but the two things are different. Agents play a part once offer has been made and accepted making sure that the process moves along. They are different from solicitors in that they can talk to everyone in the chain, solicitors can only talk to the one above or below. At the end of the day you'll have a benchmark figure of what you need to sell for in order to get your next place and if it's within a good % of your asking price then that's a winner.

SinkingFast

Thank you all very much for your replies! We are on the market but I was intrigued by the phrase "only worth what people will pay".

Reading all your replies has educated me and helped me understand the real estate market better!

Thank you.

googler

You're Welcome.