The American president and lawyer Abraham Lincoln once stated that ‘a man who represents himself in court has a fool for a client.’
And as any property developer will tell you, other than finding a dishonest estate agent willing to defraud his client, the best way to buy a house for less than it’s worth is to agree an ‘off market deal’ with a private seller.
It’s not unusual for developers and investors to post hand-written letters to homeowners claiming to be a young family who have ‘simply fallen in love with the house’ on sale. Believe me, it works.
But if you can’t be bothered to do the legwork, the next best thing is to use an online agency to get immediate and direct access to lots of naïve, unrepresented vendors relying on a property version of eBay with a helpline.
With no pesky estate agents introducing outside interest, the developer is free to agree a low price because the vendor is ‘saving on agency fees’. The unsuspecting sellers then find themselves unprotected against last minute price chips based on spurious claims of market downturns, bad surveys and downward valuations, which are things agents parry daily. If the buyer doesn't ‘chip’, the chances are the price agreed is so low they don’t want to risk losing the bargain.
This may sound far-fetched, but every estate agent has listened to dinner party boasts of the tens of thousands of pounds a guest has cleverly saved on estate agent fees this way. Apparently, cutting out the estate agent is more important to these sellers than saving the tens – or even hundreds – of thousands they’ve potentially lost by doing so.
You may be thinking, “Well, he would say this, he’s an estate agent.” But it may surprise you to hear that we estate agents invariably use estate agents to sell our own properties.
We do the job every day, so we know only too well how important it is to have a middle-man during negotiations. We also know that estate agents have databases of the best buyers relying on agents, rather than portals to notify them of properties coming to the market in specific locations. Also, there’s greater accountability; if you get it badly wrong, you can’t exactly sue yourself.
A very good example of getting it right was when we recently sold a mews house for £3.4m. It had been on the market for six months with another agent asking £2.6m, who were advising the client to accept an offer of £2.1m after 40 plus viewings. Eventually, we found a buyer, who was not looking to buy at the time, who owned a nearby house worth in excess of £40m.
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When we informed him that he could garage his cars and house his staff in a house close by, he entered into a best and final bids. Given that our negotiations achieved the vendor an extra £1.3m, he was more than happy to pay our fee of £85,000 plus VAT as he recognised the premise that the cheapest estate agent when it comes down to it is the agent who gets you the highest price.
Admittedly, the previous agent’s advice was based on local sales and the feedback they received, but they had not considered the possibility of finding a special buyer willing to pay a special price. This scenario would definitely never have happened had the seller used an online agency, as they wouldn’t have had access to the wealthy local buyer.
Online agents will always be attractive to people who think cheap is best. But, unless you want to become one of Lincoln’s fools, employing a good estate agent to represent you will always be the best way to sell your property for the best price.
Lurot Brand is a London-based estate agency specialising in mews
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