Expectations in estate agency
After some difficult negotiations during sales recently, we’ve been having quite a few discussions in the office about managing expectations. Here are some of our thoughts on when and with whom do we have to manage expectations within estate agency?
1. seek to prevent disappointment by establishing in advance what can realistically be achieved or delivered by a project, undertaking, course of action, etc.
When is the best time to manage the expectations of the buyer? The earlier you manage expectations, the easier it should be. Upon meeting a potential buyer – ‘an applicant’ – for the first time, you can quickly gauge what they need and want. Do they want a perfect home to move into or a run down ‘doer-upper’? Talking to your applicant is paramount. This is where the relationship begins – it’s the foundation level in managing those expectations. We are not about to get all ‘Mum & Dad’ on you and tell you that you can’t buy the project house you have fallen in love with. We are here to make sure you have all the information and the tools you need to work out the maths. We’re here to impart our knowledge and experience with regards to works, etc. Many first-time buyers assume that they can move into the house on day 1 and start work – in reality, a rewire means floorboards up, plaster off and that strange white dust that settles daily, regardless of whether the builders have been in or not.
Are buyers missing out a ‘rung’ on the ladder just because the automatic AIP (Agreement in principle) generator had told them they can afford up to £xxx? We recently had a lovely couple looking to take the next step. Their 1 bed flat was under offer and they had been searching for well over 6 months. Each time they offered, they came in low. They kept continually making low offers which were never even entertained, and they became used to disappointment. They were stretching themselves way beyond their means based on their potential lending capability – leaping from a 1 bed flat to a 3-bed project property. How can we manage their expectations after such disappointment? After a long conversation with us, they realised that maybe they were unintentionally skipping a rung on the ladder, hence why their low offers were continually rebuffed. We showed them a project house on a £250k – 2 bed, needed modernisation – they loved it. Offer accepted, no hideous monthly repayments and money left in the pot for renovations.
Upon graduating from applicant to buyer, how can we manage the expectation of the sale progression? This isn’t a difficult question to answer, but it is where the most confusion, stress and misinformation lies. Standard conveyancing (sale agreed to completion) is approximately 8 – 12 weeks (theadvisory.co.uk). The truth is that sales can complete in less or more time, but the key is to brief everyone involved on exactly what steps form the process and then consistently update all parties to keep a tight rein on the expectations.
A good agent will have a dedicated sale progression person/team – someone who you can contact, who will update you with regards the progress of your sale. Expectations can be managed through information updates. As an agent we are in contact with all parties and can often have an insight into the whole sale, as opposed to the one-sided view the buyer & sellers are often subject to.
As with buyers, the time to manage expectations must start upon first meeting, at the valuation, and continue right up to completion.
‘How much is my house worth?’ – the first question on every sellers lips. Chances are they have already put their postcode in to Zoopla for an instant valuation. Then sometimes disappointment follows upon the agents more accurate valuation. This is the ‘Zoopla Effect’, seen by agents every day. Zoopla will take the price of all the houses within a small radius of postcode, then find the average. That is great if you all live in a utopian world of carbon copy three bed semis. In the real world, we don’t. You might live next door to a seven-bedroom Tudor mansion, with a rank of 1 bed purpose built flats on the other side. The average is therefore going to be skewed somewhat. How can we manage your expectations on price? – through up to date information, and something Zoopla can never give you – local experience. An agent who has been selling houses in your city for 20 years is hands down a better bet than the Zoopla super computer.
‘What Zoopla can’t tell you is what a buyer would be prepared to offer for your property – which ultimately is the only meaning of the word ‘value’. You will only find that out if you put your home on the market.’ Ross Clark, www.thisismoney.co.uk, 20th June 2015
Whereas price is the most pressing thing on a sellers mind, timescales follow a close second. How long will it take to sell your house? This is something no agent can ever predict yet many promise a quick sale. We hear on a daily basis ‘I know my house will sell quickly’ and this can be a difficult expectation to manage. Again, information is key. Providing the seller with as much information as we can regarding recent sales in the area, current market information and realistic expectations – never making promises.
Feedback – each owner is different as to when they want to hear what viewers think about their house. We have clients who can ring before we are back to the office and others who only want to know when someone offers! The best solution to manage expectations here is to agree a schedule with each owner at the start of marketing and stick to it.
How about the difficult discussion of price reduction? How can we manage a sellers disappointment if we have to call them advising that it’s time to reduce? Answer; with care, consideration and all the information to hand. Tools such as Rightmove Plus can really help as agents can show the seller in black and white that internet views have slowed via a user-friendly graph but the real evidence is discussing what other owners are having to do to sell.
What about the type of buyer that a seller wants to attract – can this be managed? Everyone wants a chain free cash buyer, but the reality is usually buyers with a mortgage and possibly a chain to follow. Certain types of homes attract certain buyers. A 3 bed Victorian terrace, in Bath for certain, will rarely attract a first-time buyer. It will attract the ‘second rung’ buyers, moving up the ladder. These often come with a chain, which can strike fear in the hearts of some sellers. If you only wish to sell to a chain free buyer (as one of our owners recently stated), you are isolating a very large chunk of the market. How can we as the agent manage this? How much can we vet applicants and stop them from viewing a house? It’s our job as the agent to manage the sellers expectations, regardless of their views on who they want to sell to – we can advise, but only to a point.
We have agreed on a sale price between seller and buyer, now what? We add another ingredient into this soup – the solicitor. Do the buyers and sellers know what to expect from their solicitor? Does the agent know what to expect from the solicitor? I’ve touched on this slightly with regards to sale progression and lead times up to completion. A solicitor should also be managing your expectations, because after all, you are paying them for the service.
Are solicitors outlining the service they will be providing, beyond the initial quote, the processes they follow and the cost of actioning these? Are they explaining ‘what happens next’? Sometimes after a sale is agreed, it all goes quiet and we get concerned calls from clients asking why no one is updating them. Solicitors are often methodical folk and can sometimes lose sight of the human element – this is where the agent needs to come in and explain everything in layman’s terms.
As an agent we too must manage the solicitors expectations of us. Some solicitors value the help of the agent with regards to helping the process run smoothly, whereas others do not appreciate the calls asking for an update. After the first chase/update, you soon learn how the solicitor likes to work and it is always great when a buyer/seller use a solicitor that you have worked with before and built up a good rapport. It makes the process easier and in turn relaxes your client because you both know what to expect. We have regular meetings with certain Bath solicitors to discuss how to fine tune our relationship with them and learn new practices.
Mortgage brokers/Financial Advisors
As with solicitors, the contacts regarding the financials are just as important as the legal bods. As an agent you often need to contact mortgage advisors before you can take a property off the market. Upon accepting an offer from a buyer needing a mortgage, we ask for 3 things: Proof of deposit, mortgage AIP and solicitors details. It is often the case that buyers will advise upon a viewing, that they have all of this in place. In reality, we need to speak to the mortgage advisors for the actual paperwork – which can take a few days, and in the meantime, the house remains on the market. The agent is again on the front line of managing the expectation of the buyer and of the seller. I recently accepted an offer on a much sought-after house and was expecting the AIP the day of the acceptance. After speaking with the applicant, I was passed to the mortgage broker, who was not happy to be chased by an agent daily. It transpired that the buyer hadn’t sent any documentation through to the broker, so an AIP was a week or so away. This in turn annoyed the seller and they felt they had been duped slightly. Best practise says that the house stays on the market until the physical paperwork has been received, but its difficult to manage the buyers or sellers expectation when they are not properly educated on the brokers turnaround times…..
In a perfect world, all the agents would follow the same rules & code of conduct and we would all work happily together. Sadly, this doesn’t always transpire. Upon a sale being agreed we will most likely be involved in a chain and as an agent you run a ‘chain check’. We need to make sure all the sales above and below are holding together and that there are no surprises. This can involve regularly speaking to multiple agents. Are the other agents managing our expectations when we ask them about their clients sale/purchase? Are they telling us all the facts? Like agents and solicitors, sometimes the relationship between agents can involve a bit of testing of the water. Some love a chat and will tell you all about the sale and their clients. Some will just give you a name and address, then send you on your way. The worst scenario currently is an online agent who has already been paid up front and thus has no interest in being involved to get to a successful completion – this often leads to the proper estate agents in the chain having to do twice the work to take up the slack.
What have we missed? What expectations do you have from your agent?
by Mandy Doyle – Partner and suspect leggings wearer at Madison Oakley