How much should you trust your estate agent?

Let’s be honest, a heck of a lot is at stake for someone when selling their property.  It’s almost always their most valuable asset. It’s daunting and involves a huge amount of money.  Get it wrong and the consequences can be pretty high, but get it right and the rewards can also be high…….

Giving sole agency for the sale of your property to an estate agent gives them almost total control over your sale.  Incidentally, I think that a sole agency contract is far better for a seller than a multi-agency contract, subject the quality of the agent.  But that is for another blog post.

I picked up a Rightmove enquiry from a potential buyer that stated:

Financial incentive if you can find and get me a decent property that’s got some potential.”

Translated, this buyer is offering a back-hander if an agent can get him the right property at the right price.  I’d like to say that this type of thing is uncommon, or at least never taken up, but I would be lying.  I get offered incentives frequently by potential buyers.  Proudly, I can say that I’ve never ever taken one and I never ever will.  I like sleeping well.

A quick story that will have no doubt happened many times for every agent.  I got offered cash on a property where two buyers were equal on money, but one was in a stronger position.  I am 100% solely working for the seller.  The weaker buyer offered me £1000 if I could get his deal accepted.  I refused and told him he’d be far better off putting the £1000 on his offer.  He did, the other buyer matched him and my seller got the better buyer and they got £1000 more on their bottom line.  They were paying me just over £3000 to sell their property for them.  They’re paying me to get them the best price and give them the best advice.  I could have made an extra 33% on that sale by taking it, and shamefully many agents do, but that owner would have been directly losing out.  It’s basically theft.  I’m not saying that employees would be more likely to take a financial incentive, but the person that sells your home will likely get 10% of the fee that the agency is charging, so in this case £300.  So the buyers financial incentive is 3 times yours as the seller……. I actually think that this type of practice is far too prevalent in estate agency and something needs to be done about it.

Imagine you’re selling a £400,000 house and the buyer really wants it and offers your agent £3k to get it £20k lower than you could possibly get from said buyer.  Will your agent aim for the £3k bonus on top of the commission you’re paying them or get the extra £20k for you?  It might be the difference between £380k and £400k…. HUGE money.

I started Mr. Green because this is the level of temptation an estate agent will face in order to effectively steal from their client.  I know from seeing it that the agent dresses it up as something else, but it’s theft, it’s really serious.

So ask yourself when choosing your agent, do you trust them enough to ALWAYS do what’s right for you as their client?