Estate Agents’ Tricks
On the whole, Estate Agents do a good job at helping you buy and sell houses. But they are also geniuses at squeezing every possible penny from you or making you settle for the sale that's best for them - keep your cards close to your chest and learn to spot their tricks before they pull them.
Whipping you into a frenzy
It’s the estate agents’ job to create a buzz around a property. They might try to panic you by arranging appointments when other buyers are also viewing the property. Rather than working through offers one at a time, they might try to introduce “sealed bids”, which pits you against other buyers without you knowing how much they are willing to offer.
Stay head-strong and don’t fall for it. All of this is aimed to push you into driving your price up much further than you can afford. So keep in mind what you can pay and stick to this – there’s no point in getting your dream home if you are then impoverished for the rest of your life. Find out the best questions to ask an estate agent.
Talking you out of the best deal
Never let them know your bottom line (if you’re selling) or your maximum price (if you’re buying). Otherwise the chances are you’ll end up having to settle for it.
Avoid letting an agents’ agenda eclipse your own by shopping around to find the right agent for you and getting your property valued by at least three different people if you’re selling.
Inventing phantom offers to drive up your price
Your below-asking-price offer has been accepted, the property you are buying is off the market, and it’s all steam ahead towards completion. Then the next week, the Estate Agent calls to say that someone who viewed the property previously has put in an offer a few thousand pounds above yours. You smell a rat. If you suspect this is a false bid, challenge the Estate Agent and ask to see proof in writing that this third party exists and they are willing to make a higher offer. Read what one of our members did in this situation.
Whether real or hoax, being gazumped is depressing and can cost you money. There are a few options for reducing the chance of being gazumped but they cost. Some estate agents have introduced a “Good Will Charter”. Both parties pay a deposit which they will lose if they don’t go through with the sale. It’s not fail safe but it might help you weed out people who aren’t serious about the deal.
Another option is a lock-out agreement whereby the seller has to take the property off the market for a limited amount of time while the deal is being completed. You will have to move quickly to get everything done before the time period is up. Discuss the pros and cons with your solicitor.
Misleading you over Help to Buy
Help to Buy phase 1 allows some people to get a government loan of 20% of the price of their house. This is a loan so it will have to be repaid, but some lenders advertise the property at 80% of the price, deliberately misleading Help to Buyers into thinking they are getting a cheaper deal.
Pressuring you to use their mortgage brokers
Some estate agents have been reported putting pressure on people to use their mortgage service, saying they will get preferential treatment or, worse, claiming they are unwilling to work with them unless they do. Putting undue pressure on you in this way is illegal. By all means, if you have the time, get a quote from the Estate Agent’s mortgage adviser before shopping around, but bear in mind that:
- they may have a far narrower selection of mortgages than if you look further afield
- there may be an upfront charge for their advice whereas some mortgage brokers and banks can give you mortgage advice for free
Also be aware there have been accusations of mortgage brokers and estate agents working closely together, openly discussing potential buyers’ budgets in order to get as much money out of the buyer as possible. So again, find out what deal they can offer while remembering that you are under no obligation to accept their mortgage offers.
Selling you extra advertising
If your house isn’t selling maybe you need to think about changing your tactics. Your estate agent might tell you they can do more to advertise your property if you pay them more.
Think hard about this: why haven’t they done everything they can to market your property already? And is the extra money refundable if you still don’t get an offer?