Estate agents explained
What do estate agents actually do – and is it worth using one? Kate O’Raghallaigh investigates
Buying or selling a home is a big deal. There is an infinite list of things to consider, from figuring out where to live, getting approved for a mortgage and, in the case of selling a property, negotiating the sale of your existing home while also trying to find a new one – hopefully within the same general timeframe.
For many sellers and buyers, an estate agent is an indispensable part of the process. However, they are not trusted by everyone. Their status as salesmen often seems to unnerve homeowners. According to a recent survey from Norwich Union, 44% of property sellers are not convinced that their estate agent has given an accurate valuation of their property, while 46% feel that having to restrict themselves to one agent (some agents insist on ‘sole agency’, which means if you sell your property through another agent, you will still be liable to pay their commission fee) results in limited marketing of the property, making it more difficult to sell.
Estate agents are salesmen and yes, they are looking to make a profit from selling your property, but that shouldn’t necessarily make you wary of using their services. Using an estate agent can take a lot of the stress out of moving home, according to Alex Barnet, spokesperson for Halifax Estate Agency. He explains: “The advantage of using an estate agent is that you have a professional handling the process for you. In the case of selling your home, the main benefit is that your property will be marketed by a professional.”
Although estate agents are not regulated by the Financial Services Authority, mortgage lenders and brokers are, many are members of the National Association of Estate Agents (NAEA). This is a trade body representing estate agents, who in turn are obliged to uphold standards and professional practice.
Once you decide on which agent to use, in the case of buying a property, the agent will draw up a list of suitable properties that meet your requirements and price range, and then arrange some viewings. If you are a vendor, the estate agent will usually arrange for someone from the agency to conduct a valuation. This is an estimation of a suitable asking price for your home, based on local knowledge and any properties that have recently been sold in the area.
Because estate agents are not regulated and there is no hard and fast rule when it comes to valuing a property, it isn’t uncommon for one estate agent’s valuation to differ from another’s. It is therefore, a good idea to have more than one valuation carried out, as you will then have a price range you can work with.
The next step is to arrange to have your property put on the market, says Barnet. He continues: “Although it is possible to have the person who values the property take some photographs, this is usually done on a separate occasion. Once we have put together a marketing brochure for the property, we send it back to the owner for approval and once this is done, we then market the property in our branches and online.”
In terms of costs, if you are selling a property through an estate agent, you will be required to pay them a percentage fee of the sale price of the property. Rates vary between estate agents but it is often possible to negotiate on the fee with your agent, for example, agreeing to a lower fee if your property doesn’t achieve its full asking price.
Property portals
Online property portals have increased in popularity in recent years, as buyers have become weary of trudging through the streets of their local town, scanning estate agents’ windows and local listings pages. Nicholas Leeming, director of website Propertyfinder, describes online property portals as a “one-stop property shop”, saving the buyer and seller both time and effort. He explains: “As we are basically an advertising medium for estate agents across the country, consumers can benefit from having thousands of properties at their fingertips. Estate agents benefit from online property portals like us because, quite simply, they just don’t have the capacity to reach as many buyers in one place as we do.”
Your estate agent can list your property on an online portal for you, and will normally absorb the fees for doing so. You can also use an online portal to find an estate agent in your local area, as both UK agents and properties are listed.
Selling privately
But what about going it alone? If you really don’t want to use an estate agent or feel you can’t afford it, there is always the option to market your property yourself. This isn’t always advisable, however, according to Peter Bolton King, chief executive of the National Association of Estate Agents. He says: “We have noticed a marginal increase in the number of people attempting to sell property privately over the last few years, which has been fuelled by the rise of property portals and do-it-yourself websites. Homeowners are experiencing varying success with this method. There will always be a strong demand for good, professional agents who can provide expert guidance and support for consumers who are making their way through the complicated homebuying and selling process.”
Buying and selling property is a stressful and expensive endeavor. It is, therefore, advisable to seek professional advice if you are unsure about how to proceed where you stand at any part of the process. Estate agents form a part of the group of people who can help you through the process and while it could save you money if you don’t use one, the decision to negotiate such a large sale on your own certainly shouldn’t be taken lightly.
For more information on selling your property privately, see the April 2008 issue of Your Mortgage, on sale at the end of March.
