This is a tactic widely used by estate agents the country over. It’s not pretty, it’s not in the best interests of those selling and more often than not, leaves a very frustrated and unhappy client. I go and sort out the mess this approach leaves so frequently now that I felt it is worth a blog post to try and help people not get in to the situation in the first place. If you do find yourself in this situation, don’t be too hard on yourself, there are thousands and thousands of people that have done exactly the same. Remember, they’re experts at this sales tactic.
‘Value high and get ’em down’ is the tactic of over-valuing a property in order for you to list your property with that agent and then the systematic approach to getting you to lower your price so they can sell it.
The main reasons as to why I see this tactic leave people so angry and frustrated are:
- It requires the agent to be dishonest to their customer. If they said upfront what they were doing, nobody would go for it, would they!
- When the agent’s phenomenal positivity fades away the second you’ve signed the contract and they’re not getting any viewings, it WILL NOT BE THEIR FAULT. It will be “The market” “The property” “your fault” or any other cliche excuse they care to roll out. Because if they said it was their fault and they overvalued it on purpose, you’d probably be none too impressed. I meet many people that are so dejected by their sale that they feel like giving up. More often than not, it’s because the agent has done a terrible job marketing their home in combination with a very high listing price as to why there’s not been viewings or offers.
- Excuses eventually run out and this is the point at where the real frustration for customers starts. Within all the positivity on valuation, the agent maybe didn’t highlight that they have a 16/20 week contract before you can leave. And when, after 8 weeks you find out you’ve got another two months, it’s probably pretty annoying; but then after a further 8 weeks of annoyance, you then find out it’s a further 14/28 days notice period in order to get out of their contract. It’s unlikely they’ll have mentioned this either.
- If an agent is utterly convincing and confident they’ll get you £XXX,XXX for your home, people naturally go and look at properties that that price enables them to buy. When it becomes clear that it’s not achievable, it’s not a case of just lowering the price, but losing the dream home they’ve seen too.
So, why do they do it? What’s in it for the agent?
- A lot of people are motivated to move, so they will lower their price within their contract period. What are the other options? Wait it out. A certain % of people will do this, so the agent guarantees a number of sales. Not at the best price for their customer, but a sale none the less.
- The agent will often set their commission based on a percentage of the initial listing price and fix it. Eg. You’re going on at £300,000 so their fee is 1.5% of that and fixed at £4500 + vat. Sure, they’ve overvalued it by £35,000, but what’s an extra £525 + vat amongst friends? Or maybe they just don’t make that part too clear either…….
- They charge an upfront fee. The super-duper marketing bonus package is the best marketing money can buy (until you see what they actually produce). I pay a top class professional photographer to come out and stage and picture every property we list. At my cost. It’s an investment in the sale of our customers homes. I also pay for the brochures to be printed. Again, an investment in the sale. I saw a lady the other day and an agent had charged her £399 + vat for a premium brochure and photography. The result was way below what our basic standard is for property marketing. They make a fair amount of money from you before doing anything.
So, how do you spot if an agent is using this tactic or not? Here are my tips.
- If an agent makes big promises, hold them accountable to them. “We’ll sell your home so fast……” If that’s true, they won’t be worried about not signing you up to a contract, surely? My personal advice is to not sign a sole agency contract with any tie-in period full stop. If the agent is doing a good job and delivers on what they promise, why would you consider switching? Mr Green has no tie-in period. I do this as a show of faith. I invest a lot in to a sale with no tie-in. Trust works both ways between customer and agent. It’s not a one-way street that solely favours the agent. You’re the paying customer!
- Don’t be happy with the property details on your sale until they look brilliant. Bad marketing will negatively affect your sale. Especially if it’s overpriced.
- Be smart. Do your own research. Speak to several agents.
If you’re concerned about a valuation, no matter where in the country, drop me an email at email@example.com and I will help you feel totally confident in the decisions you’re making.
Mr Green Estate Agents