Dealing with estate agents – how to get a good deal

In my job I deal with estate agents a lot. I talk to them daily and have built up a good rapport with our regular agents. At the time of writing this article (Feb 08) the market is changing from a sellers to a buyers market. What this means is that estate agents are a lot more receptive to the offers I make now than they were at the same point last year. If I rang an agent a year ago with an offer 20% below the asking price they would have laughed and told me to stop wasting their time, they wouldn’t even have bothered to put the offer forward to the vendor (which they are meant to do). However the market has now changed to a sellers market. They take 20% below market offers and put them to the vendors straight away. With the downturn in trade for estate agents they are a lot more receptive to buyers as a whole. We know from the news that less houses are being sold and the evidence of a few estate agents closing their offices in the areas I operate in is proof of the fact. If you couple the fact that all new properties put onto the market have to have a HIPs (Home Information Pack – costing £500 - £1,000) pack and the reduction in buyers then this is hitting estate agents hard as only really committed sellers are trying to sell as it is no longer a no cost option to try and sell a house due to the HIPs pack. This has taken quite a few of the speculative sellers out of the market (which isn’t a bad thing as it should only be committed sellers) but some of the speculative sellers did in the past sell their property.

The best way to deal with estate agents is to build a rapport with them over a period of time. Estate agents get hundreds of property investors coming to see them to promise to buy their houses within 7 days for cash, and other rash promises (I have spoken to an estate agent friend of mine to help me write this section). Alot of these property investors are either promising things they can’t deliver upon or the agency never hears from them again. I know what this is like. When I go to a new estate agency where they don’t know my company I get the usual blank look with the card tossed on the pile of others. You have to be persistent with estate agents and actually go and see them. Get them to remember who you are and actually do what you say you are going to do. Don’t make rash promises but do clearly state what you want from them. Estate agents only want to sell their properties and like many of us they want to make the process as easy as possible. Someone told me that one in every three sales fall over to new buyers but our average with estate agents is 95%. We do offer lower prices than the man off the street but I think the reason that we do get offers accepted is that we do complete and do what we say we are going to do. We also clearly communicate with the agents when things are going wrong. My company and the estate agents have a common objective, we both get paid if the deal completes, therefore it is in both sides interest to be as open and honest as possible. If both sides know of the problem and try and help each other overcome them then that works better than keeping the estate agent in the dark. Often a good estate agent can help the process if they know what the problem is. Problems often arise following a survey when reports are needed and there are possible retention/price reduction issues. Good agents will help get reports put together and will advise the vendor on a reasonable reduction in the cost if something has come up on a survey (all offers are made subject to survey). A purchase and a sale can be a stressful time for sellers and buyers. It is useful for two professional parties to have a open but professional discussion – i.e. this is where we are up to, we want to get £XK off, how do you think the vendor will react to that etc....

If you do build up a good relationship with an estate agent you will find that they ring you first, sometimes allow you to do unaccompanied viewings and don’t even fully market the property if they know that the property they have is something that meets your criteria.

My checklist for getting a good relationship with estate agents is:

a)    Visit or ring them regularly

b)    Make sure they know your exact brief

c)    Short negotiations

d)    Communicate quickly – good or bad

e)    Do what you say you are going to do – simple but very important

f)    Take them some chocolates at Xmas!