While some estate agents believe in honesty, many will not tell you the full story in order to make a bit more money out of you. Here are 22 things they generally won't mention that you should know about.
1. They overprice your property
The average sale price ends up being 12-15% less than the initial asking price. There are many potential reasons for this, but it’s largely due to the fact that estate agents give you a higher valuation than is realistic so that you’ll go with them.
Don’t be too trusting and make sure you get valuations from at least three agents and check out similar property prices.
2. They make personal use of your property
More often than you’d like to think, estate agents use the properties they’re selling for their own personal use. For example, one anonymous agent confessed that it’s common to have naps in uninhabited houses they’re showing.
3. They will cut their fees
Did you know you can actually negotiate the commission fees? The idea that these figures are set in stone is a common misconception as it is possible to bring down the percentage that your estate agent takes out of your profit.
4. Open house events help them more than you
Open houses tend to be more beneficial for the estate agent than for the sellers as they allow agents to meet potential clients who may still be in the market for their own estate agent.
5. They don’t always put you first
Your agent could be using ‘dual agency’ to double their commission. This means that the agent is representing both the buyer and seller and essentially playing both sides.
6. They’ll hand your work on
That well-known agent that you hired because of their reputation is likely to pass you off to one of their juniors once the contract is signed. If you’re concerned about this, be sure to make it clear that you would like to deal with the same agent throughout the buying or selling process.
7. Their contracts can have hidden fees
Once you choose an agent to represent you, be sure to read the contract thoroughly before signing it as there may be hidden administrative fees in addition to the chunk they take for commission. Like the rate of commission, any fees are also up for negotiation to a more reasonable amount.
8. They are careful with the truth
Estate agents won't usually give you an honest answer even if they want to. If you’d like to know the truth, the internet or chatting with neighbours is your best bet.
9. They won’t tell you about disputes with neighbours either
Who your new neighbours are can have a huge impact on your quality of life. Estate agents will often know about issues but not mention them to buyers. Make sure you go and research this element yourself in case you find you have just moved in next door to the neighbours from hell.
10. They won’t tell you how much they make personally
If your estate agent is more unwilling to negotiate their commission than you would expect it’s probably because they don’t actually pocket all of it.
11. They don't have hoards of 'ready-made' buyers waiting
Those ‘ready-made’ buyers that your agent talks about don’t actually exist most of the time. The reality is that once they list your property on popular websites, interested buyers will usually get in touch with them, but these people will have no previous relationship with the agent.
12. They underestimate how much things will cost to fix
If you are a buyer interested in a property which needs work they will often suggest it will cost a lot less than it will really set you back to replace a kitchen or bathroom or repair a roof. Always get a professional survey done and quotes from several sources before you commit.
13. Discounts are better than refurbishments
Instead of splashing out on costly and stressful upgrades like marble countertops or hardwood flooring that your agent may convince you are necessary, you can offer potential buyers a financial incentive. For example, a discount off the price for upgrades to the house in place of the time and stress of overseeing renovations.
14. They make extra money from their recommended contractors
If you do decide to take on projects, you don’t have to use the contractors that are recommended by your agent. Feel free to look around for the best deals and negotiate rates with the contractors you find on your own, but be sure to check their previous work and references to ensure quality.
15. You can research just as well online
Don’t leave all of the work up to your estate agent. Be sure to utilise all of the property websites and information available in your search for your dream home.
16. They won’t really suffer if they sell your house for less
The percentage of your agent’s commission is not affected when you don’t get the asking price for your house. The overall amount will be lower because it is a percentage of what you make, but it will always be the percentage outlined in your contract with them.
Basically, if your house earns you a few thousand under your asking price and your agent is set to take 2% of the final sale amount, that percentage stays the same.
17. A bargain price may not always be good
While getting a great deal on the house you’re buying may seem great and will leave your agent with something to boast about to their future clients, it could come back to haunt you. If the time comes for you to sell, potential buyers need only conduct a quick search online to see past selling prices.
If you paid a surprisingly low amount for the house, don’t expect new buyers to be willing to pay too much more unless you’ve done some serious remodelling.
18. They aren’t always what they seem
Be sure to actually check out an agent’s references before listing with them. Many people will rush to get their property credentials when the market is booming and list their friends and family as their references.
Without experience, they won’t know and understand your market so make sure to do your research before signing any contract.
19. They employ fake buyers
It may seem ludicrous, but professional viewers are actually known to be hired by agents to convince you that they will bring in an immediate influx of potential buyers should you list with them. Needless to say, once the contract is signed, these viewings start to slow down.
20. They use selling techniques on you
‘You should bid now before someone else does!’ and ‘Are you really willing to lose this home for the sake of a small amount of money?’ are both common phrases rehearsed by estate agents to create a false sense of urgency and pressure buyers into putting in an offer quicker, and often higher, than they are initially willing to.
21. You don't need to sell with just one agent
You can go with more than one agent if you think it will give you a better chance of selling your home.
22. You can sell it yourself – online
You actually don’t need an estate agent. More and more people are going the “for sale by owner” route to avoid any selling agents dipping into their earnings. If you use all of the available tools to adequately educate yourself, selling on your own could be your best option as you’ll avoid paying an agent’s fees.