If you need a little handholding while you sell then yes, using an estate agent will be of benefit to you (as long as you find one of the good guys).

For the bolder, there is no reason why you need to expose your sale to the risk and expense of instructing an estate agent.

• It is not a legal requirement (even with the new Home Information Pack legislation)

• It is not the only way to find a buyer

• It is no guarantee you’ll sell your property for the highest possible price

Successfully selling property privately and pocketing the estate agent’s fee is very do-able.

In fact, we’d go so far as to say that marketing property effectively and finding buyers is childishly easy when you know how.

Problems With Using an Estate Agent

Estate Agents are far from loved in this country – you’ll be hard pushed to find to many people that speak highly of the agent that they used.

The quality of estate agency service in this country is a concern and it has in the past prompted investigation.

In recent years there’s even been two major (Government initiated) studies into the problems of buying and selling in the UK:

• Key Research On Easier Home Buying & Selling (ODPM)

• Estate Agency Markets in England & Wales (OFT)

In particular, the Office of Fair Trading study highlighted serious concerns over the way Estate Agents serve the public.

Which? (the consumer group) has also conducted research.

They found evidence of serious violations of the law and a massive 50% of consumers voicing dissatisfaction over the service received from their Estate Agent.

Which? reported that:

“Consumers entering the Home-buying or selling process are substantially disadvantaged by the way estate agents currently operate”

Most recently the BBC’s Whistleblower Documentary highlighted some of our estate agent’s shadier practices.

Bribery – Fraud – Deception! All pretty damning and extremely worrying if you’re thinking about putting your house on the market with an estate agent!

Benefits of Using an Estate Agent

Not all estate agents are rubbish. In most towns, if you look hard enough, you should find at least one consummate pro.

If you can find this person, you will have found an ally - one that will help to make your move go as smoothly as possible.

In an ideal world, all estate agents will:

• Truthfully advise on price and not overvalue your home just to win your business

• Market your property as if it were their own

• Arrange and conduct viewings, making sure all buyers are properly vetted and ready to buy

• Negotiate the best sale price for your property regardless of the fact that their fee structure does not encourage this

• Keep supporting you and your sale all the way through to completion. Nothing is more disappointing than an agent that disappears after the buyer has been found, only to resurface upon completion with an invoice of eye watering proportions.

• Take the initiative in keeping you totally informed of progress.

• Not pressurise you into using associated services (such as mortgage brokers and conveyancers) from which they earn a referral fee.

• Pass on all offers, not just the ones from buyers that are using the agents associated mortgage brokers.

Given the number of complaints each year against our Estate Agency industry, the real questions are:

First, let us make a few things perfectly clear about selling your home without an estate agent:

Many people feel strongly that most Estate Agents don’t deserve the fees they charge – We couldn’t agree more!

Property prices have risen dramatically over the last decade.

Seeing as estate agency fees are based on the percentage of your sale price, Estate Agents are making a killing (over £4 billion last year).

• Are they working any harder for their money?

• Are they providing consumers with a better service?

The evidence presented earlier suggests that they are not.

The truth is, selling a property is not difficult. There’s certainly no mystery to it and you don’t need the sales skills of Arthur Daley to get the best possible price.

All you need to do is:

• Price the property competitively (use estate agents for this, they’re free)

• Present the property well (no one is going to pay you top dollar for a dump)

• Take your pick of the marketing options that are available to today’s private seller

• Find a decent conveyacer to take care of the legals & process the transaction

That is it! When you get these fundamentals right, property sells it’s self. Don’t let any estate agent scare you into believing otherwise.

The main benefit is the £1000’s of pounds you save in Estate Agents fees.

To give yourself the absolute best chance selling privately we’d say that you should put aside a marketing budget of around £500 (it is of course possible to do it for less than this).

Now, with the figure of £500 in mind, let’s look at the savings you’d make by selling your house privately:

 

When you consider the Estate Agents’ fee as a percentage of the actual profit you make from your sale (i.e. What you sell-for minus what you bought-for) you’ll you soon realize just how much you’re giving away?

By selling your property privately you can also look forward to:

• Taking control of your sale (being in the driving seat)

• Receiving direct and immediate feedback on all aspects of your sale

• Not having to rely on the word of your Agent for updates (there will be no Chinese whispers, brush-off’s, excuses or lies)

• Knowing that your sale is receiving the attention it deserves

• Probably achieving the highest possible sale price

That last point deserves a fuller explanation. You see, for many Estate Agents, a sale is a sale. They get paid no matter what price is finally agreed.

The harsh reality of estate agency is that the effort involved in negotiating an extra £5,000 -£10,000 for you will only and an extra £100 – £200 on to the estate agent’s bill.

It’s not much of an incentive for an Estate Agent to go the extra mile and fight for your best price once an adequate offer has been presented.

The recent bestseller by Steven J. Levitt (winner of the “John Bates Clark Medal”, awarded to the best American economist under 40) on modern economics called Freakonomics has even shown scientific proof of this.

This is a good question to answer. Our experiences tell us that:

• Most people just assume that using an Estate Agent is the easiest thing to do.

• Some simply don’t have the confidence to take responsibility for their own sale.

• Some are frustrated by the lack of sound private property selling advice.

• Some believe that the salesmanship of an Estate Agent will secure them a better price.

If you’re deciding whether to sell your home on your own, here’s a much overlooked property truism about salesmanship that’s worth bearing in mind:

“Even if an Estate Agent convinces a buyer to overpay for a property, the buyer’s mortgage valuation always stops the sale from going through at an inflated price!”

When a mortgage lender’s valuation does not confirm a buyer’s offer, it’s immediately obvious to everyone that the house is overvalued.

Nobody likes to overpay!

The most common result of a “down-valuation” is that your buyer’s mortgage application is refused.

Refused mortgage application = No sale + A waste of your time!

There’s nothing for you to do but lower your price because otherwise buyers will keep dropping-out at the mortgage valuation stage.

Every day, more and more homeowners are waking up to the idea that you don’t need to pay an estate agent to sell a property.

All it takes is:

• A little common sense

• Decent organizational skills

• The desire to save a large percentage of your sale profits

Figures from the Office of Fair Trading show that 1 in 10 homeowners now take a stab at selling their homes privately.

The OFT interviewed a sample of these private property sellers and their findings were striking:

• 91% reported the whole process ran extremely smoothly. Most said they would do it again.

Compare that to findings from Which? that we mentioned earlier:

• 50% of sellers who used Estate Agents were dissatisfied with the service they received.

There has also been a recent study by the “Interactive in Media Retail Group”, IMRG (The global e-retailing industry body) on the rise of the private house sale.

They forecast that by 2010 nearly half (that’s 700,000) of all property sold in the UK each year will be without the help of a traditional Estate Agent.

Now, that’s got to be bad news for the element of rogue estate agents out there!

Whichever way you decide to sell, we wish you good luck. Just remember, in property the true spoils go to those that plan their attack.