Estate Agent Tricks

What Estate Agents Don’t Want You to Know!

Along with Politicians, Estate Agents are regularly voted as being among the most untrustworthy professionals, and not without reason.

That’s not to say that none of them can be trusted, but it is useful to know the ways that many of them operate so that you aren’t taken in by any of the Estate Agents tricks.

Here are the things you need to know…

They Want Listings

Most Estate Agents focus on just listing as many properties as possible, when you might think they should focus on achieving sales. There are two main reasons for this:

  1. The bigger their local presence (and the more For Sale boards they have up) the better their perceived reputation will be. Understandably many people choosing an Estate Agent are more likely to use an Agent with a strong presence than one without any obvious presence.
  2. Once they have the listing and someone is contracted to them, they know that apathy means that most won’t switch to another Estate Agent even if it turns out that the property was incorrectly priced. They can then persuade you to drop your price to where it should have been in the first place.

Many Estate Agent Sales Negotiators are incentivised to get listings, rather than sales. This is why the questions they will nearly always ask a potential client are “Have you had any other Agents round?”, or “What did other Agents value it at?” or “Do you know what you’re expecting to sell it for?”

Once you answer any of these questions they can then tell you that they expect to achieve a higher price than you expect, or than other Agents can get. This is one of the most common Estate Agent tricks, used by most Agents.

The way to deal with Estate Agents when they visit you to do a valuation is to let them do the talking while you do the listening!

Favoured Buyers

Estate Agents will often want to sell your property to a particular Buyer, such as an Investor. It is certainly not unknown for them to have “off the record” arrangements involving cash or incentives with people they favour.

When an Estate Agent is selling a property they will also favour a Buyer who has also listed their property with their company. I’ve seen properties come on the market, and when potential Buyers request a viewing they’re told that it’s already sold!

What’s happened is that their favoured Buyer has already been informed, viewed, and had an offer accepted. The Estate Agent will resist interest from anyone else. Not good if you’re selling and want the Buyer that pays you the most rather than the one the Estate Agent makes most money out of!

Or they might prefer a Buyer they are arranging a mortgage for, because they get a fee for doing this.

With the amounts of money involved in selling a property there are always going to be opportunities for the less ethical Estate Agents to do what is best for them rather than for you.

Referral Income

I bet you didn’t know that Estate Agents can make as much from the peripheral services as they do from the sale itself!

For example, fees from Lenders for arranging mortgages, fees from solicitors they “recommend”, fees from EPC providers they nominate, commissions from Removal companies, and commissions from Insurance companies for Buildings and Contents insurance and Life Assurance.

There’s nothing wrong with any of this of course, like every business they aim to optimise their opportunities to earn money – just be aware that the help and recommendations they give you may be because it is more in their interests than yours! Check that their recommendations are competitively priced, and be prepared to turn them down and use whoever you choose.

You can probably understand even better why their priority is to secure listings first and foremost though, now you know how they can make so much from these referrals!

Percentage Based Fees

Most traditional Agents still quote a fee which is a percentage of the sale price. Rather odd when you think about it – how many other things do you buy where the cost is anything other than a set price or fee?

The reason?

Agents worked out many years ago that long term the market only goes one way – up – and that house prices rise faster than inflation.

So as property prices go up, they make more money! And apart from the new online Estate Agents, who often charge a fixed fee, they are happy to continue with this cosy arrangement, which is very much in their interests.

Of course they’ll tell you that it’s in your interests too because this way they are incentivised to get the highest price for you. Well, if you believe that the extra £75 they typically make if they get £5,000 more for your property motivates them, you’re more trusting than I am!

Find out more about the ways to sell a house:

1 Using an Estate Agent
Types of Estate Agent
How Estate Agents Market Property
How Much is it Worth?
How Much are Estate Agent’s Fees?
Once the Property is Listed
Once a Sale has been Agreed
• Estate Agent Tricks
Selling Without an Estate Agent

2 Selling to a Quick Cash Buyer
Watch out for the Unethical

3 Selling at Auction

4a Equity Release

4b Sell & Rent Back (SARB)

5 Creative Solutions
Exchanged with Delayed Completion

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By Richard Watters

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