The secret agent: house sellers finally set realistic asking prices

The secret agent: house sellers finally set realistic asking prices

Our undercover pro is surprised to find that some sellers are finally getting real

The landlord’s possession notice is taped to the door and the signs of a hasty exit are visible through the window: abandoned cheap office furniture, window displays offering overpriced homes still in situ and a few sets of property particulars scattered among the spent coffee cups on the floor. Yes, the first estate agent in town has folded.
It was a cut-price outfit, linked to a cheap conveyancing firm that engineered its own quick exit at about the same time. The operators took the computers, along with what remained of their credibility, and the only people more delighted than the public to see the back of them are the other agents.

To the experienced eye, all the signs were there: a cutback on advertising spend in the local property paper, ever more desperate commission deals, advertised on lurid Day-Glo card in the window, and the shrinking car and staff pool.

“Good riddance, if you ask me,” says T, the assistant manager. “They had it coming.”

There’s no love lost between agents, and, as the market hardens, so does the heart. A whitewashed window means a bigger share of the reduced pool of sensible sellers for the rest of us – and the commercial department gets to place its “to let” board above the facade. It’s the property combatant’s equivalent of the Red Army raising its flag above the Reichstag.

“Do you think we should contact all their vendors?” asks S, the negotiator, naively. I reluctantly accede to the suggestion. The chances are that the owners’ expectations on price and commission will be wildly at odds with reality, but we might pick up a distress sale or two.

A recent survey underpinned the extent to which sellers’ perceptions are still lagging behind actual prices achieved. It is tough out there, and buyers, especially those who know what they are doing, are driving hard – a point brought home to me that afternoon by a wily, long-in-the-tooth speculator who, like me, remembers the dark days of the early 1990s.

“Nah, this place is still too dear,” he announces as we exit a grotty repossessed flat. As always, he’s on the lookout for a margin, and with the market in its current depressed state, is determined to drive a hard bargain. It doesn’t help that the dingy flat has a shrinking lease and high ground rent. Nor that, by the look of the outside elevation and communal areas, a hefty maintenance bill isn’t far away.

“Let me know when they drop the price and settle up the service charges, then I might make a bid,” he continues. “But they won’t like it.” As we walk back to our cars – mine a mid-range rep-mobile, his a top-of-the-range Teutonic with a three-pointed star – he shares with me his views on buying strategies.

“I don’t suppose he gave you a sensible bid?” T asks as I return from the appointment empty-handed. “Always buy when the blood’s on the streets, apparently,” I say, quoting back the speculator’s words of wisdom as F, the twit of a trainee, wanders past with toilet paper still clotted to his shaving cut. “And, despite views to the contrary, continue. There’s more bleeding to be done.”

Later, at my last appointment of the day, I’m caught by surprise as a potential vendor requests a realistic price for a quick sale. He winces when I oblige, then shrugs acceptance. His plan is not dissimilar to that of the speculator – sell swiftly, then rent until the market bottoms before buying again. It’s a high-risk option, in my view, as you only know when prices have topped or tailed about three months after the event.

“So, do you think it’s a good bet?” he asks as he hesitates over my sole-agency agreement. He might as well ask me for the winner of the first race at Chepstow, but, like all gamblers, he’s susceptible to hyperbole.

His home is worth a punt for someone with a strong nerve, and for a second, I’m tempted myself. Instead, I ring my bookmaker – it’s probably a safer bet.

From The Sunday Times
April 27, 2008