Is A Long-Term Agreement Really In Your Best Interest?

January 4, 2023

You will probably agree that it is right and reasonable to have a contract with your estate agent that specifies the fee you will pay if they sell your property on your behalf.

Why then do some estate agents need you to sign a contract tying you down for up to 12 weeks?

Is it truly what is best for you?

No, it is not, to put it simply.

Yes, the agent invests a lot of time, money, and effort in promoting your home, and they typically are only compensated if they are successful in selling it for you.

That is, of course, unless you decide to take a risk on a web-based agency, in which case they demand payment in advance and leave it up to you to complete the sale of your home. But it is a different tale!

The issue develops when agents become a bit too eager to get your direction to promote your house. Typically, agents are driven by the personal commitment to increase their monthly income. The temptation is for them to overestimate the value of your home in comparison to similarly situated houses on the market. The greater value naturally makes you happy, and soon after that, they invite you to sign their 12-week contract.

Nothing wrong at all; worth a shot at the most expensive pricing.

Maybe you are fortunate, but here is usually when things start to become challenging.

You already know that once you begin shopping for a new house, you rapidly grasp the market and determine what the going rate for homes is. You can find a tonne of proof on the internet. You quickly determine whether a property seems to be too pricey and move on to the next one on the list.

Your home is currently being overlooked and glossed over on the internet. Nobody is coming to see it, and no one is phoning your agency to inquire about it. There has been a deafening quiet from your agency for a few weeks.

To learn more, you contact your agent. They cite things like “it is still early,” “the market has slowed down a little in your region,” “it is the wrong type of weather,” etc.

While the homes you are interested in purchasing are selling, your home is not. They are missing you, however. You begin to question if you selected the best agency. But the lock-in agreement still has 10 weeks remaining. You seem to be trapped with them.

You reluctantly inquire as to your options. Naturally, they will reduce the price in response. That was always the plan.

You may start losing thousands of pounds at this stage, which is a shame.

You must reduce the price to sell, perhaps to the level at which it should have been in the first place. However, astute purchasers will notice you have done this and begin to circle. They are aware that you need to sell or maybe desire to. They seize the chance and begin making lowball bids. They are profiting from your price reduction. You are now in a disadvantageous position and have two options: sell at a price you presumably are not pleased with, or stand out and make no move. Both of those were not what you intended to accomplish.

We see this happening every week.

When they should be looking out for you, estate agents are instead taking care of themselves with lengthy lock-in clauses.

We are not required to participate in such kinds of activities as we are an independent business. We provide our employees fair compensation so they are not dependent on commissions to cover their expenses. They are free to make decisions that are in your best interests and provide you with sound advice.

You are not bound by our agreements. You may switch agents whenever you choose and without delay if you have any cause to do so.

The upshot is that we do not overvalue your house.

We determine the appropriate market price for you using our knowledge of the local market and data on the prices of comparable homes that have previously sold. This is crucial since your initial few weeks of marketing will be your most profitable. We then present your home to a pool of enthusiastic purchasers who are waiting to see it. Your home will not be overlooked if it is priced reasonably. On the contrary, we get phone calls from people who want to know more, and we set up a visit so they can have a look. Often, buyers will compete with one another to buy your home.

This pool of customers will vanish if the initial few weeks of critical promotion are ruined by an inflated asking price, and you will only be left with the new purchasers who are gradually entering the market, one at a time.

Instead of becoming upset as you wait for viewers to purchase the home you have your eye on, you may go and buy it if you successfully sell it within the first few weeks.

When you hire an estate agent, you anticipate getting knowledgeable, qualified guidance. The Real Estate Agency Code of the Royal Institution of Chartered Surveyors (RICS) governs how we do business. All are intended to provide sound counsel to our clients and guarantee quality work on our part.

Despite how alluring they may be, do not let unrealistically high values fool you.

Also, refrain from entering into lengthy contracts that tie you down.

When done correctly, promoting and selling homes can be a very simple and stress-free process. We have been engaging in it for quite some time.

If you’re looking to sell or let your home with a Lee On the Solent Estate Agent, Stubbington Estate Agent, Gosport Estate Agent, Fareham Estate Agent, Portsmouth Estate Agent then please do no hesitate to email on info@gshomes.co.uk or call on 023 93 960 169.

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