The Truth about Estate Agents – all First Time Buyers must read!
I’m sure you’ve had dealings with Estate Agents in the past, if you’re an agent please don’t be offended by this blog -there are some great agents out there worth their weight in gold! (Especially family run agents whom I tend to do a lot of business with.) However on the flip side there are some sharks, swindlers and various business practices that you simply must be aware of!
It’s important to remember the Estate Agent isn’t working for you; instead they represent the landlord or seller. Their sole purpose is to make money out of you and get the seller as high a price as possible for their property. We must never lose sight of the fact they’re salesmen, highly targeted and heavily commission based. I’ve watched many first time buyers fall prey to their tactics and sales techniques without even knowing. When I was 19 and bought my first property I was one of them… If I knew then what I know now !
Within an estate agency lays tense competition between the sales agents, each one vying for top salesman/woman. White boards often cover the staff room walls with tallies of whose selling the most, viewing the most and closing the most deals. As always in environments where sales pressure is high, not meeting targets means many agents are shown the door, so you’ll find there is a very high turnover of staff in this industry.
I rem
ember everyday on my way into work at Oxford Circus, I used to walk past a very well-known Estate Agency in central London. At 8.30am without fail I saw the white board being pointed at and a huddle of sales people surrounding it. On the board contained different closing and sales techniques, tips on ways to handle negotiations and which agent had sold the most that week. These types of meetings are consistent across the board with most agencies, I can guarantee they’ll talk about the types of people that walked through the door the previous day- (you,) whether they think they’ll get a sale out of you, get more money out of you, they’ll share hints and tips on how to ‘handle’ negotiations, and will often work on strategies they can use to get you to increase your offer. Bottom line, they’re not on YOUR side!
Having spoken to many ex agents I have noted many of the strategies and techniques they use are not ethical e.g. 
Not putting your offer forward, lying to you telling you there’s a non-existent higher offer to create panic and get you to increase the offer, not selling a property to you just because they didn’t like how you spoke to them. It sounds crazy, but it happens- This industry is not regulated and there are some cowboys out there!
Below are some hints and tips to ensure you don’t fall prey to some of the tricks of the trade. (This is especially relevant to first time buyers!)
Beware of how you’re perceived
- If you’re a first time buyer, you’re every agents dream! You’re like putty in their hands. They know you’re going to pay the asking price on the property you fall in love with, and often they’ll do their upmost to get you to pay over the asking price in order to get more commission out of you.
Understand you will be labelled and treated differently to other types of buyers
As soon as you walk into an Estate Agency you’ll be labelled. (Harsh right?) If you claim to be an investor they’ll quiz you asking you questions such as if you know the difference between LTV/fixed rate/variable rate/tracker etc. What mortgage rates are the best, where you invest, how many properties you own, what the Bank of England base rate is etc. They’re trying to suss you out and differentiate you between a true investor and someone whose watched property ladder. If you claim to be an investor make sure you know your stuff or you’re going to be labelled a timewaster, or even mocked when you leave the office because of your lack of knowledge. Dont look like a lemon!
Have your finances in place
If you’re a first tim
e buyer, they’ll want to know how long you’ve been looking for properties, they’re weighing up if you’re serious or a timewaster. If you’ve viewed lots of properties with other agents they’ll think you’re probably going to waste their time as well and wont be motivated to show you properties. Therefore make sure you have your finances in place. Have a ‘Decision in Principle’ in place with your broker/mortgage lender, this proves you can get a mortgage. Agents are tired of wasting their time on first time buyers who don’t know if they can get a mortgage. In order to get an agreement in principle and find out if you qualify for a mortgage you’ll need a good broker, if you don’t have one let me know and I’ll put you in touch with the team I use- they’re brilliant!
Play It Cool
When viewing properties if you find something you want, please PLEASE don’t jump up and down shouting ‘it’s perfect, I love it!’……… Wrong, wrong, wrong! What do you think the Agent’s thinking? ‘Perfect I can get the full asking price or more! – Can’t wait to get back to the office speak to the owner and tell them we’ve got the sale in the bag!’ Without realising it you’ve just cost yourself thousands, even if you try to negotiate, IT’S TOO LATE, you’ve shown them your cards, they’re going to play every trick in the book to get the full asking price out of you! So please play it cool on viewings!
I spoke to an ex agent recently who admitted it was normal to play games with first time buyers. One told me he used to take an offer from a buyer then tell them later in the day they have a higher offer (which was non-existent!) All to get the emotional first time buyer to increase their offer, which 9/10 they did! It’s wrong I know… but it happens, this industry isn’t regulated!
Be Nice
Another thing to remember is if the agent doesn’t like you they won’t sell to you! Why would they sell to someone who comes across arrogant, too head strong, or someone who spoke to them rudely? They would prefer to tell you they have a higher offer or the properties off the market, or even sell to one of their investors at a lower price! So please don’t wind them up the wrong tree. Be nice, friendly, build up rapport and remember it’s all a game. Get someone who isn’t emotional about the sale to negotiate for you- as often once emotions are involved in property it can cost you thousands!
Good Luck and happy buying!
If you would like more information please feel free to email me at tara@taracoley.com for more secrets, tips and tools on how to handle agents.
cathy
andrea
Jamie Ramsey
MC
Jessie Yang
Very true Tara, I quit working for a large estate agency 6 months ago because of this stuff. All the best