Today, a colleague gave me great example of when expectations don’t appear to matter. He’s currently going through the painful process of selling/buying a home and has had to engage with different agents to view properties and so forth.
He reported a concerning trend: agents appear to be over-valuing properties to get the instruction. Once the vendor is tied in to the contract, they can’t do a lot about it. But here’s what happens:
The agent gets viewings and some interest in the property.
My colleague, being a smart guy, knows that the vendor is already paying rent elsewhere so figures there’s a good chance of a reasonable offer being accepted. Also, being a smart guy, he does his research and discovers that an identical property just next door has sold for £240k just six months earlier – £30k less than the asking price for this property.
In the vendor’s head, they were prepared to drop their price by £20k for a quick sale. They are offended by the offer and turn it down.
The agent tells the buyer that the vendor won’t accept anything less than £246k. The buyer walks away, appalled by the tactics of the agent.
- The agent wasted their time.
- The vendor is disappointed and offended, doesn’t make the sale and is still paying rent and a mortgage. This is probably going to happen a few more times before they understand what happened.
- The buyer goes elsewhere, hoping to find an agent with some scruples.
Now, the real problem is that there’s no relationship to build here. It’s not like the vendor is going to sell a house every year and keep using the same agent, is it? Next time they want to sell, they might be a little wiser and get three valuations, and chose the one in the middle that is likely to be more realistic.
The agent oversold and under-delivered. Does it matter to him that the client won’t come back for more? Probably not, because the client wasn’t likely to come back any time soon anyway.
The painful reality is, these guys get paid a fat commission cheque for selling a property. Just how much is a recommendation from a satisfied vendor worth? Surely they really could, and should, do better?