There’s been much debate in the online forums, and no doubt on the high streets too, as to how many properties that come to the market actually get sold, i.e. legally completed.
Several commentators, quoting various research/surveys, suggest it’s about 50% so, if we agree that’s broadly the right number, what does it say about our industry? Could it be that estate agents aren’t very effective? Or might it be that the process is flawed? Or perhaps we’re a nation of people who change their minds quite a bit? Or is it something else?
I don’t have research to back this up but from many conversations with hundreds of different agents the top three reasons, in no particular order, as to why a property doesn’t sell are:
2. Property condition
3. Change of mind or circumstances
So how many of these are the responsibility of the agent?
On the one hand you could argue that none of them are. It’s the owners’ decision what price to attempt to sell for, their responsibility to maintain/improve/repair their property and I’ve never met an agent who has changed their mind about a sale or said to an owner, “are you sure you really want to move, wouldn’t you do better to stay put?”
However, shouldn’t an agent be responsible, at least partly, if an overpriced property comes to the market? Dare I suggest that some agents overvalue to win an instruction? Should an agent’s experience enable the identification of a significant number of potential structural issues or at least those that are common for an area/type of property and consequently advise investigation or remedial works before marketing? And how often do some agents encourage, push, even cajole owners to put their homes on the market “why don’t we just try the market and see what happens…..” (or words to that effect)?
This raises another issue. Who pays for all this abortive work? Again, the online forums have been red hot with agents’ fury at how PurpleBricks, and other agents with new business models, charge per listing, in effect half their clients subsidising the other half. But isn’t this true of the traditional models? The 50% who don’t sell with a traditional agent pay nothing so surely the costs associated with bringing their properties to market must be met by the income generated by the half whose sales do complete.
I’m not supporting one business model over another, both clearly have the same issue that too many properties don’t sell. But hang on a second, are we missing something?
Is it wrong that people wish to speculate or for an agent to seek new price levels for their clients? One persons view that a property is a complete wreck is matched by another who sees the incredible potential to create something really special. And changing your mind or having the ability to do so if your circumstances change isn’t always a bad thing. Indeed, most if not all the big decisions in life should surely be carefully thought about and planned.
I think the real issue is that the facts about the property market are often concealed or not highlighted sufficiently. People should be told that 50% of properties don’t sell. That 25-30% of offers fall through. That it now takes almost four months to get an exchange of contracts. That surveyors can sometimes paint a horrendous picture, making mountains out of molehills. That many solicitors are slow and poor communicators as are lots of employers, local authorities, lenders and everyone else involved in the process.
It could be argued that the 50:50 world we live in is good news for agents as this means home owners, who only move a handful of times in their lives, need guidance and help to not just find a buyer but to get the deal over the line to completion. So on that basis, can I suggest we communicate the potential pitfalls a lot more frequently, loudly and clearly, and stop sugarcoating the reality and pretending that a move will be hassle free?
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