The dirty tricks that Estate Agents play
Marketing material that you do not own
Many of you will have paid for marketing material, sold to you by an agent, not only to present your property correctly, but more importantly to the agent, to present themselves professionally at your expense.
You may pay for a photographer, videographer and various other services, but what happens when your contract ends? (assuming you signed one, which you should not)
If you decide to change agents, you will be informed that the marketing material belongs to the agent, even though you have paid for it. They will pursue you and your next agent, if that material is used in any way, shape or form in the future, so what should you do?
There are agents who ask for a ‘marketing contribution’ upwards of £1,000, they use the term ‘contribution’ to blur things, firstly because it implies that the marketing costs far in excess of this sum, which it does not, secondly, this legally implies that you do not own the marketing material, therefore, they can prevent you from using this material in the future, if you change agents. This may put you in the position of having to paying for marketing again.
There is every reason to have professional photography and videography, to market your home, but you should not be paying for a service, which is more about projecting the image and the brand of the agent, rather than the property.
If you are going to pay for marketing, make it conditional, in writing, that should you do so, the marketing material will be yours in its entirety, without encumbrance and that you will be free to use it in the future, should you change agents. You should also insist that you are provided with copies of all marketing material, edited but un-branded.
Why should you pay large sums to advertise the agent? On the completion of a sale, the agent will receive thousands of pounds, they don’t always succeed, but how many businesses spend time and money prospecting for business unsuccessfully, even though it costs them to do so? That is par for the course.
According to Charlie Lamdin, director of Best Agent, as many as one third of properties on the market are actually fake. How many times have you called to enquire about a property that is listed for sale, only to be told that it has just been agreed, just been removed or not available for some other reason?
Although the figure seems to yo-yo, there are around 20,000 estate agents in the UK and on average, there are less than 100,000 sales per month, which can reduce significantly in a slow market. If we take in to account that the vast majority are handled by a few national chains, that does not leave a lot for the remaining agents.
Many agents resort to fake listings to populate their websites, using fictitious listings and sales to dupe potential sellers and buyers. the implications of this can be very severe, as this can not only distort the figures, but more often than not, the agents don’t want a buyer for this property, for obvious reasons, so they tend to put them on at a higher price, which can then impact the perceived valuations of other property.
We get calls all the time from valuers, who contact us to ask for the selling price of a property that we have sold, because this information will not be available anywhere. They then use this information to value another property that has just been agreed.
Think about that for a minute, valuers are using fictitious listings, fictitious sales, to value property which may result in an unsuspecting buyer paying thousands more than they should have!
Offers submitted to properties for sale are confidential and the buyer’s details are protected by GDPR, therefore, agents can list, mark as SSTC, then withdraw, or otherwise change the status and availability of a fake listing without any potential buyer being any the wiser.
The buyer misdirection
This happens all the time, an agent has a hot buyer, large deposit or cash, progressible and ready to go. The agent has two similar properties in the area that the buyer wishes to buy, but one of them is just a few weeks in to a six month sole selling rights contract, whilst the other is multi-agency, what will the agent do?
The agent will more than likely direct the buyer to the listing that is multi-agency, because the seller who is under contract to the agent, is captive for months. Therefore, the agent will do everything possible to detract the buyer’s interest in the former property, either by implying that there is already an offer under consideration, potential offer, or any other reason that will sway the buyer towards the other property.
This will generate a sale for the agent, on a listing that could be lost at any time, then, once the sale is tied up, the agent can then move on to the other listing, that cannot go anywhere for a long time, thereby ensuring, or at least increasing the chances of securing a sale for both. Had the agent not done this, the buyer may have bought the sole-selling-rights property, leaving the multi-agency property available for other agents to sell.
The strategic over-pricing
An agent has a property for sale at £500,000 which is nearing the end of its contract, they are requested to conduct a valuation on another similar property, which they then over-value, possibly by a significant amount, using an entire profusion of figures to make their argument. Remember the famous quote I have previously referred to:
“There are three types of lies, lies, damned lies and statistics”
There are several benefits to this pre-meditated deception:
Firstly, the agent has more chance of winning the listing, because the sellers want to get the best price and sometimes common sense vanishes when large sums are involved, so the buyers may sign up with that agent.
Secondly: By listing another similar property at a higher price, the first one appears cheap, creating more interest and often resulting in a sale of the cheaper property, by this time the higher priced property is beyond the cancellation period, then the negotiator can get to work, pressuring them to reduce, because they cannot change agents for months. Once again, increasing the possibility of securing two sales, instead of one.
The fake ‘ready, willing and able’ buyer
You are reaching the end of your sole-selling-rights contract, the agent knows that you are planning to take your property off the market or take any action that will not generate a commission for the agent.
How can the agent ensure that you are still obliged to pay a fee?
This is another reason, why I strongly advise against any form or sole-selling-rights contract, because some of these contracts are ‘booby-trapped’ with a clause that states:
“If at the end of the contract, the agent has a buyer who is ‘ready, willing and able’ the seller is still obligated to pay the agent the agreed fee”
As the agent knows that you will refuse to sell, they will suddenly ‘create’ a sale out of thin air, they will inform you that the buyer is willing to pay your asking price, in writing, secure in the knowledge that your plans have changed and you do not wish to sell. As you are only days away from the end of your contract, you may resort to delaying tactics, until it ends, then you simply notify the agent that your contract has expired and you no longer wish to sell, simple isn’t it?
Not so simple, you have now fallen in the ‘ready, willing and able’ trap, you have acknowledged the offer at your asking price, you have acknowledged that the agent forwarded that offer before the end of your contract and you have declined it.
You are therefore in breach of the terms of your contract, the agent can and often will pursue you for their fee and you are powerless to contest this as the so-called buyer, cannot be challenged, because even if this were a genuine offer, once it is declined, the buyer would have invariably moved on to another property anyway.
Do not sign a sole-selling-rights contract under any circumstances.
These are ploys that agents use every day, throughout the country. We need to keep in mind that many agents are either on commission only, or basic plus commission, with strict targets, especially the larger chains, who have a high-pressure management structure and tend to treat their employees very badly, forcing them to put figures before people.
Estate agents in the UK are in a desperate battle for listings, due to the ratio of agents to properties, most could not survive without resorting to underhand tactics, at your expense. In the end, they are providing a results based service, but when that service involves people paying, borrowing or both, there is a distinct matter of ethics which all to often is lacking.
Having said this, there are some very hard working, professional agents out there, who work tirelessly for their sellers, even if they are part of an organisation that is only concerned with their figures.
For the main part, it would be wise to avoid the national chains, there are professional, respectable individual agents in every part of the country, you will know who they are if you ask around, they are probably discreet, working quietly and tirelessly for their clients, spending more time working for their clients, rather than devoting that time to telling everyone how wonderful they are.