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WHY USING CHEAPER ESTATE AGENTS STRENGTHENS THE CHANCE OF SELLING.

As we all know the online estate agency industry is growing by the day with Purplebricks still been the market leader. However, this does not make them the best.

The main reason why the online agents appeared and still do more attractive than the high street agents are the savings the vendor can make when it comes to commission. However, although the savings are great I strongly feel the vendors are not using these savings to their maximum advantage.

Why do I say this? Basically, it’s simple too many vendors are concentrating on the offers they are receiving before commission is taken into consideration (Gross amount) rather than thinking of the amount after the commission has been paid (Net amount). I strongly believe this mindset is holding back 1000’s of people from agreeing to sell their property, its madness.

Why do I think this? Its simple. Let’s take a £250,000 property for example. There are two options, the high street estate agent are offering to sell for 1.5% commission and the online estate agent have a package at £800 no sale no fee. Let’s say someone offers £240,000 for the property. With the high street agent, the commission charged would be £4,320 (including VAT) making the NET amount £235,680 whereas the local agent would be £800 making the NET amount £239,200. In our example the vendor declines. However, the question is if they have appointed the online estate agent would the vendor accept £242,000 if they had gone with the local agent? This is where the madness comes into it as you would be amazed by the amount that would.

Why is this mad? It’s obvious accepting £242,000 would leave the vendor with a NET amount of £237,644 which is less than the offer of £240,000 with the online estate agent.

This is why the online agents with the attractive commission rates offer the vendor a higher chance of selling. It gives the vendor more chance of getting an offer which gives them the money in their pocket they require after agents commission has been paid.

Although this article is to push the vendor to use the cheapest estate agent but one thing to remember is the service standards the agent offers is equally if not more important. It’s ok going with an agent who only charges £100. If this is the case you are going to have to take your own photos which is fine, host your own viewings which is fine, but you still need an agent who is

  1. Going to answer the phone when people call to enquire or book viewings
  2. Negotiate hard for you
  3. Progress your sale tenaciously with the solicitors to get the sale through as quick and seamless as possible

The art is to find an estate agent who is not greedy and have the mindset that building a business takes time and they are not in a rush for success. Once you come across an online estate agent with this ethos you will have found an agent that is well priced and at the same time offers excellent levels of service.

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WHY IS COMMUNICATION SO IMPORTANT?

New Estate Agents emerge to the market on a weekly basis. Existing agents are constantly thinking or been told they must get on board with change with such things as technology.

Most new Agents to the market launch their product based on price and attractive commission levels making existing agents think about what they can do to compete.

However, one thing the new agents don’t consider and the first thing to suffer when existing estate agents try and compete on commission levels is communication. In my opinion this is the business suicide and the companies who adopt this strategy will soon get found out.

The most important part of the sales process is communication so if you are looking to employ an estate agent to sell your property it is imperative you use an agent who respects how important communication is. Its as simple as this communication can be the difference between a good and a bad estate agent.

The facts don’t lie, look at The Property Ombudsman’s reports over previous years and you will see the importance of communication as this is the topic which has generated the most complaints against sales agents.

The emergence of the online estate agency has seen companies utilising technology allowing them to save huge amounts of money on staff and wages by introducing tools such as an app. These savings have allowed them to enter the market with packages as little as £99 to sell a property. However, these will generally not offer any form of service levels and support from the respective company. If it does it will generally be sub-standard only causing stress and frustration for vendors.

The reason why online agents have entered the market is because they have seen the success of companies like Amazon which is mainly reliant on systems. But what they are forgetting is their system is selling a house, the biggest asset you will ever own whereas Amazon is selling garden furniture.

There is no way a system and the vendor can sell a property without the need of support in the form of human beings with experience in the industry to refer to, especially when things get complicated with solicitors etc. Before the introduction of the online estate agents moving house was classed as the most stressful thing you will experience and I believe the reason for this was bad communication, it has only got worse not better.

So why do I think its communication which makes moving home so stressful? its simple. You employ an estate agent to sell your property, 95% of them are open from 9am – 5pm Monday – Friday and a Saturday morning if your lucky. You employ a solicitor when you find a buyer for your property, they are open 9am – 5pm Monday – Friday and no, you’re not lucky enough for them to work on a Saturday morning. You yourself work full-time Monday – Friday 9am – 6pm and Saturday 9am – 12 Noon. You want to speak to your agent and solicitor, and you are unable to use your phone at work, you try calling on your lunch, but the agent and solicitor are also on theirs. They return your call, but you are back at work. It takes two days before you catch up with them and that’s where the stress comes in. Now take an online estate agent who has no support facility to speak to a human being, imagine the stress that relationship will create. This is why it is so important to use an estate agent that understands the value of good communication. They are there, ones who open from 8am – 9pm 7 days a week, like FastMove. Use an agent who operates long hours every day of the week and you will see how easier and enjoyable the whole process becomes.

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WHY IS MY HOUSE NOT SELLING?

Why Is My House Not Selling?

Ok so you have had your property on the market for a number of months or even over a year and your property still hasn’t sold. It is causing arguments at home, it is causing sleepless nights and an enormous amount of heart ache. But believe me there is a reason why your property is not selling as everything sells.

What you need to do is identify why your property is not selling and hopefully this article is going to help you do that.

The first thing to analyse is how many viewings have you had. If for example your property has been on the market for 2 months and you have had 30 viewings, the reason the property hasn’t sold maybe completely different than if you have only had 1 viewing in the same timeframe.

Price – It is imperative you get the marketing price of your property correct before it goes to market. Yes, your right this is the job of the estate agent. However, unfortunately estate agents will sometimes over value your property just to get the instruction to market your property. As you perceive the estate agent the expert many will take their advice and list the property at the inflated price. The estate agent will refer to this as the ‘market value’. The definition of market value however is the price someone is willing to pay for the commodity for sale. Therefore, if perspective buyers feel the price is too high they won’t even view the property. On the flip side if people do view and a number of these make an offer at the same figure and its lower than the asking price the property is worth that figure, its just whether or not you agree.

Estate Agent – Have you chosen the correct estate agent? There are good and bad in all industries and the estate agent industry is no different. Therefore, it’s hugely important you choose an agent who is going to do the best job possible and achieve you the best price in the given timeframe. There are a huge amount of estate agents offering so many different price variable and levels of service so I understand why you may find it so hard to make your decision. The first question I know you will be considering is do I go with an online estate agent or a high street one? I believe there are three things to consider

  1. Never forget you are selling a house probably the biggest asset you will ever own. You are not selling a second -hand bed on eBay. You are probably thinking where is this going? As previously explained a number of agents offer so many different levels of service, some agents will only offer a listing service. Basically, all they will do is list your property. Although they may only charge £99 you will be responsible for the photo’s, description, booking the viewings, chasing the feedback, taking the offers, negotiating the price and progressing the sale with your solicitor. Not only is this extremely time consuming I am 95% you are either 
  2. exposing yourself to not achieving the best price
  3. running the risk of the sale taken a lot longer to complete than if you had an agent pushing it through
  4. increasing the possibility of your agreed sale not completing as you have no experience in progressing the sale of a property

Due to the amount of time and money you could potentially lose I would advise finding an agent that may only charge approximately £800 no sale, no fee and offer a full service.

  • As well as agents offering different levels of service they also offer a variety of different commission and fee structures. One thing I would advise is don’t chose an estate agent who charges upfront fees. If you take a couple of minutes to think about this my thoughts will become obvious. Would you pay a plumber before they tile your new Bathroom? Exactly so why pay the agent before they have sold your house? Think of it this way if you do what motivation have they got to work as hard as possible to sell your home, not much as they have already been paid.
  • The final thing to consider is the operational hours of your chosen estate agent. The reason I say this is where do your buyer’s shop? that’s right the internet on the likes of Rightmove. We all know the internet is a shop open 24 hours a day 7 days a week. Therefore, it makes no sense using an estate agent who only opens 9am – 5pm, 5 days a week because its not a marriage. Your aim should be to find an agent open 7 days a week as many hours a day as possible. You will get agents stating they open 24 hours 7 days a week, take this with a pinch of salt. All this is will be is a portal service or e-mail facility. I would suggest finding a company who has actual people on the phones available to speak too. Remember you are not selling a bed on eBay.

The final thing which is key to evaluate why your property is not selling is the feedback you have had from any previous viewings. There is no such thing as bad feedback. Therefore, if your agent is not working hard to get feedback from the viewings, its simple change agents. You need feedback its so important. For example, if six people view the property and their reason for not offering on the property is the same and you are able to rectify the issue it’s not going to happen a seventh time as you will put it right.

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THE TRUTH ABOUT THE WE BUY ANY HOUSE INDUSTRY

Lots of people are in a position where they need to sell their house fast, whether this is because they are

  1. Re-locating
  2. Separating
  3. The property has been inherited
  4. The owner is in financial difficulty and
  5. A number of other situations

When people find themselves in this position, they will aim to seek not to just find the quickest way of selling the property but also find the most secure buyer. We all know that the property industry is a very fragile one, a buyer can pull out at anytime until contracts are exchanged. This is why if someone needs to sell heir house fast it’s imperative they eliminate anything that may go wrong for forcing the buyer to pull out. One of the main issues been if the buyer is unable to obtain a mortgage for the property, either because of their own personal circumstances or even issues concerning the property itself. Obtaining a mortgage can take a number of weeks, therefore it maybe a couple of weeks from agreeing the sale that the vendor finds out the bad news. The last thing people have who need to sell their house quickly is time.

Because of this people in this position will seek for a cash buyer, yes people who actually have the money in the bank and can basically write a cheque for the property without the aid of any third- party lending. There is the possibility of finding a cash buyer by marketing your property with an estate agent, but again this can take time.

This is why the we buy any house industry emerged, helping so many people sell their houses fast. These are companies who have cash facilities to buy peoples houses in as little as seven days. However, yes you are right there is a catch

If they are a genuine cash for homes company, they will offer a lower figure than any estate agents valuation. But surely you would expect this? If not they would be buying everything on Rightmove. If a we buy any house company makes you a cash offer for the amount its on the market or what it has been valued at be very, very careful.

How to distinguish a genuine Cash For Homes Company

If you are searching the internet by typing phrases such as ‘We Buy Any House’ or ‘Cash For Homes’ you will have seen 100’s of companies portraying themselves as a business who has the capacity to buy your house for cash. However, beware a large percentage of these do not have the money to buy your property. They are just using this as a ploy to hook you in. The industry is not regulated, neither is the internet so companies selling this service are not checked to ensure they can deliver the service they advertise. So the next question is which one do I trust?

Its very easy to narrow down the genuine ones. If you agree a price for your property please follow these two steps

  1. Do not sign any paperwork with the company. The only paperwork you should sign are the documents your solicitor sends you. If you were to sell your house to your next-door neighbour would you sign any paperwork with them? Exactly so what’s the difference?  Companies who ask you to sign paperwork are doing this to lock you into an agreement. Making it brief all the paperwork will stipulate is that you agree to sell your home for X. The so-called cash buying company will then market your property for a significantly higher price than the figure you have agreed to accept in the hope they find a buyer. If a buyer is found they will stand away and basically pocket the difference between the price you agreed to sell the property for and the figure the new buyer agrees to pay. This basically makes them an expensive estate agent. Furthermore, think what if they don’t find a buyer?
  2. Ask the company to send you some form of proof they have the cash funds available to buy the property. Guaranteed once this question is posed 95% of them will run a mile.

If you can find a company that is willing to follow the two steps above they are the ones that actually will buy your house for cash.

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ARE PURPLEBRICKS UNDER PRESSURE

They maybe the largest estate agent in the UK but are Purplebricks finding themselves struggling.

The company over the years have thrown tens of millions of pounds to grow a substantial brand. Although this has been successful as the brand is a powerful one the rumours are the company has stopped growing and therefore may come under pressure from its shareholders. Sources indicate they are starting to shed staff which will in turn result in an unhappy workforce and we all know what that will lead too.

A number of employees from the online agent are given the title territory owners. Initially when these individuals were sold the concept after 5 years of hard work they would be able to sell off their territory which from the outset sounds an attractive proposal. However, the reality is that a number of them as well as Senior Managers have actually left the company through no choice of theirs after 5 years of hard work and false promises.

In Vic Darvey’s own words, CEO of the agent ‘it was necessary to ‘correct’ the business. How awful to know that your role was simply a mistake.’

It is well documented that the model failed to take off in the U.S and Australia and it is now becoming apparent this maybe the case in the UK. The share price recently dropped to 105p.

The growth of the brand has not been built on success it has been built of people with deep pockets. Any business relying on endless amounts of investment will not last because there will be a day of reckoning and that will be when the investment stops.

The initial element which attracted the public to Purplebricks was obviously the savings. Even though when they launched the fee structure was to pay 100% of the commission upfront on a no sale no fee basis. Because the alternative was to pay your local agent as much as 2% commission people were willing to take the risk.

This was pure naivety as I know these people would not pay a plumber to install a boiler before the heating was tested, so what’s the difference. Finally, people have become wise to this and realised it’s not worth the risk.

A lot of people have reverted back to the local agents and are happy to pay the higher commission as they know this is only due once the sale completes. Alternatively, people opt for another online estate agent as since the emergence of Purplebricks a number of other online estate agents have entered the market to compete. However, the majority have struggled as Purplebricks have been able to fight them off with the strength of their marketing budget.

Although the online estate agent is not operating in the US and Australia they still continue to trade in Canada.  

Lets see what the future holds for the largest estate agent in the UK.

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ONLINE VERSUS HIGH STREET ESTATE AGENT

Online Estate Agents V High Street Estate Agents

It seems to be the hot topic in the property industry and a question a large percentage of vendors are asking themselves. Should I choose a high street estate agent or an online one to sell my property? Or, what is the difference between the two sectors?

My answer is very, vey simple, every estate agent is an online estate agent. Why do I say this?

Think where do the buyers shop when looking for property? Yes online using portals such as Rightmove and Zoopla. Gone have the days where buyers will go into the estate agent on the high street to collect brochures on the respective properties they are interested in.

We have identified all agents are online ones, so what differentiates one from another?

There are two main factors.

  1. Price – If you are looking to market your property and have already approached a number of estate agents you will have seen how different they are when it comes to commission. Some agents work on a percentage basis, others on a fixed fee. Some charge an fee upfront, which is non-refundable others work on a no sale no fee basis. My advice would be do not pay the agent anything until your property is sold. Within the industry you work do you get paid before the job is done? Exactly, so why should selling your house be any different. Furthermore, try and find an agent that charges less than £1,000 to sell your house, irrespective of its value. There are a few companies out there that do offer this and these are the ones which will win in the long tun.
  • Service – Equally as important as the price is the service the agent offers. A number of agents will offer what seems to be a very attractive rate to sell your property. This is all well and good but how good is the service. For example, if you need to speak to someone for advice or even just to answer a question is there someone available or is it all done through live chat. I believe a number of newer agents to the market have got things all wrong. They believe they can get away with a business model where no customer service is required. This is madness remember you are not selling something on Amazon, you are selling your home, probably the biggest asset you will ever own.  Unfortunately, you may not find out how good or bad the service is until you are signed into a contract. My suggestion to overcome this is play the mystery shopper. Call the agent and pretend you are interested in viewing a property. See how quickly they are to deal with your enquiry. If you can’t get through and it takes hours for them to respond then quite clearly they are not the agent for you.

So in summary there is no debate anymore as to whether you should go with the local or online estate agent. What you need is to identify the agent who will give you the best service and fairest price to sell.