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HouseWeb Page - Eliminate the Estate Agent - Save Pds. 4,000?

Buying and Selling Tips: With an Agent, or Without

===================================

002bb.gif : hseweb3.png

 

"Skip the Estate Agent ! Save Money." : Click here !

 

( DISCUSS HERE your experiences with Buying or Selling Property )

 

HouseWeb's message:

 

Did you know that over 5% of homeowners sell their property without an estate agent?

 

Selling your home using the Internet is now as effective as using an estate agent, with one major difference... You don't pay the agent's commission. That's a typical saving of over £4,000.

 

For a limited period we're giving away HouseWeb's 21-page "Guide to Selling Your Home", which includes:

+ Selling - Options & Costs?

+ Agent or the Internet?

+ Reducing My Costs

+ What is My Home Worth?

+ The 6 Myths of Agents

+ Marketing my Property

 

FOR MORE INFORMATION from Houseweb: Click Here !

 

GEI's own databank of Houseprice data : http://tinyurl.com/UKtrap

 

hseweb2.png

About HouseWeb.com – Launched in May 1996 and is visited by over 1.2 million homeowners a year.

 

With its unique blend of content, properties and online services, HouseWeb.com has helped thousands of people through the maze of buying, selling and moving house. Through HouseWeb's property database, we have been pioneering the sale of property through the Internet without an estate agent. Thousands of sellers have advertised homes for sale and rent using our latest Web technology. With over 82% of visitors looking for a house, sellers are guaranteed unrivalled exposure.

 

HouseWeb Forum : /forum/ / Rates chart , Data /

 

Advertisers & sponsors include Egg, Direct Line, Bradford & Bingley, The Prudential, Barclaycard, British Gas, The Times and Nationwide.

 

HouseWeb.com is owned by HouseWeb Ltd, a privately held company based in Cambridge, UK.

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I set up a "fixed fee" estate agent business - like FSBO- but there is still an agent who makes sure the sale goes to completion (a task that many completely underestimate). In fact many are uncomfortable negotiating such large amounts, and let's face it - one can get a bit emotional selling one's home!

 

These national FSBO have a weakness in being nationally focussed on a business that is very local - most people move within a few miles of where they live. Of course there are exceptions (relocation, new job).

 

So, we set up Oxford Homes Direct, with a view to franchise out to other towns/districts. It washes its face as a business, and we would like someone to take on Reading Homes Direct asap.

 

EAs are not the most popular people in the public's consciousness. We aim to offer local knowledge, skill in seeing sale to completion and saving vendors a load of money.

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... So, we set up Oxford Homes Direct, with a view to franchise out to other towns/districts. It washes its face as a business, and we would like someone to take on Reading Homes Direct asap.

Interesting idea.

Keep us posted about your progress

 

HouseWeb seems to be one of the best-established, if this excerpt from their "about" statement is correct:

 

The site also contains over one thousand pages of independent advice, information and tips to help save people time and money. HouseWeb's guides cover everything from buying, selling and moving house to the latest mortgage rates and house prices.

 

HouseWeb.com has received many accolades and is frequently featured in the media. The site has been selected for the Lycos Internet Guide and BBC Web Guide and has been awarded Top Property site by Internet World. HouseWeb.com has been featured in all the national newspapers as well as BBC1, BBC2, ITV, Channel 5 and most consumer and Internet magazines.

. . .

HouseWeb, the first and most successful private property sales website, advertises over 4,000 properties worth around £4 billion.

 

We help people to sell their property privately, without involving an estate agent. We do this by giving our customers the tools to advertise in a professional manner and market their property on the Internet to a potential audience of over three million house hunters.

 

A typical customer finds our website, through newspaper articles, search engines or Affiliates like you. They have already made the decision that they are going to sell privately and are looking for the best site to advertise on.

 

We offer advert packages from £47 but the most popular is the Platinum at £199, which includes a For Sale Board, an advert in HotProperty magazine, and a unique 0870 phone number... Adverts stay on the site until the property is sold and enquiries go directly to the vendor in the form of Email or a phone call. The customer sets the asking price for the property, arranges viewings, negotiates with potential buyers, saving much stress and a typical estate agency fee of 1.5% - that's £3750 on a £250,000 house!

 

/MORE : on HouseWeb's site

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Will do, DrB.

 

It did occur to me that there should be a portal of all the FSBO data in one place, competing with Rightmove. There are lots of very flashy portals like Zoopla, that offer loads of info.

 

The advantage of EAs over pure FSBO is their "black book" of applicants. A good EA is a matchmaker - he knows what his applicants will buy. FSBOs don't offer this, and I don't see how they can.

 

This is why homes put on the market sell within days of going on - in fact the agent will go through his applicants within minutes of a signed vendors instruction to sell. Perhaps in this market one would prefer a quick sale, with the chain intact until exchange, than to do it yourself, with no buyer after 6 months and a considerably bleaker market?

 

1% commission may seem a pretty good deal!

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002bb.gif

 

"Skip the Estate Agent ! Save Money." : Click here !

 

About HouseWeb.com – Launched in May 1996 and is visited by over 1.2 million homeowners a year.

 

With its unique blend of content, properties and online services, HouseWeb.com has helped thousands of people through the maze of buying, selling and moving house.

Interesting but typically the same old debate, and yes do agree times are changing thanks to the internet.

 

During the speculative-boom-easy-obtain-finance-period, real estate agents were in fact just repeating doctrines (ya know houses doubling in price every 7 years) echoed by get rich quick speakers selling dreams, and real estate agents were just order taking collecting the cream. Let me say this, if you are confident then try sell your house using your own & resourses (sorry about the spelling).

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Interesting but typically the same old debate, and yes do agree times are changing thanks to the internet.

During the speculative-boom-easy-obtain-finance-period, real estate agents were in fact just repeating doctrines (ya know houses doubling in price every 7 years) echoed by get rich quick speakers selling dreams, and real estate agents were just order taking collecting the cream. Let me say this, if you are confident then try sell your house using your own & resourses (sorry about the spelling).

Do you think that "skipping the estate agent" would bring lower prices?

 

Well, it might lower prices by 1-3%*, since the Seller would lose nothing for that.

 

But does the market need EA's to "talk up prices", and twisting the arms of buyers? Perhaps.

 

*(Sorry, but what's the typical commission paid in the UK these days? In HK, it is only 1% on each side.

But even that can be negotiable. When an agent fails to get my target price, I ask him to take "Half the difference"

off his commission. So, if we want HK$5.0 million, and he has a buyer at HK$4,980,000, then I expect him to

reduce his 1% commission by HK$10,000. Have others tried this trick? )

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Do you think that "skipping the estate agent" would bring lower prices?

 

Well, it might lower prices by 1-3%*, since the Seller would lose nothing for that.

 

But does the market need EA's to "talk up prices", and twisting the arms of buyers? Perhaps.

 

*(Sorry, but what's the typical commission paid in the UK these days? In HK, it is only 1% on each side.

But even that can be negotiable. When an agent fails to get my target price, I ask him to take "Half the difference"

off his commission. So, if we want HK$5.0 million, and he has a buyer at HK$4,980,000, then I expect him to

reduce his 1% commission by HK$10,000. Have others tried this trick? )

Interesting your point is about removing agents fees will perhaps reduce the purchase price of a dwelling or asset. The actual role of a real estate agent is purely to introduce a buyer, like an introductory service. The agents will try to meet the buyer with the seller at an agreed price.

 

Now this is where ignorance gets involved, many confuse real estate agents with property developer's marketeers and hired speakers selling tax loops incentives and capital growth speculations ( like some gold spruiks). Agents incentives is just to sell the property, and price is not a consideration as the agent cares not about price but to just flip the property and get paid. So yes to agree if the agent fails to achieve your target price (but this depends on whom provided the price range- the agent or you) well if the agent did not advise on price so why should the agent take a fee/commission cut? After all you agreed on the commission in the listing contract.

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So yes to agree if the agent fails to achieve your target price (but this depends on whom provided the price range- the agent or you) well if the agent did not advise on price so why should the agent take a fee/commission cut? After all you agreed on the commission in the listing contract.

Things are very negotiable in HK.

And if the agent doesnt like my (target) price, he can seek another property to show to his client, and that is how it works here.

 

The way I put it is this:

 

"My target price is X. If you want a full 1% commission, I will happily pay it, if only you achieve my target. If you want me to accept less than that, then half the reduction will come from you, and half will come off the price. So do you very best to achieve the target price."

 

Putting it another way, I am willing to cut my price to make a deal happen. But if I have to "take pain", and absorb a price cut, then I like to see the agent take some pain too. BTW, I often start negotiations at a price above my target "bottom price", and when I get to the level where I expect the agent to "take some pain", then maybe 2-3% has already come off my initial price idea.

 

I aim to deal with integrity, and not change my price willy-nilly, but if the market pushes higher, and my price looks too cheap in the market, I will push my price up with the market. In HK, the market is highly transparent, and it should be possible to establish the price within 1-2% on most major properties here. And genuine prices, not agent spin, go right into the transaction records, almost immediately.

 

If you deal direct, with no agent's fee, then the price in the transaction record might be 1% lower, with both sides happy. And so, no agent in multiple sales, may mean less house price inflation.

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Things are very negotiable in HK.

And if the agent doesnt like my (target) price, he can seek another property to show to his client, and that is how it works here.

 

The way I put it is this:

 

"My target price is X. If you want a full 1% commission, I will happily pay it, if you achieve my target. If you want me to accept less than that, then haf the reduction will come from you, and half will come off the price. So do you very best to achieve the target."

 

I aim to deal with integrity, and not change my price willy-nilly, but if the market pushes higher, and my price looks too cheap in the market, I will push my price up with the market. In HK, the market is highly transparent, and it should be possible to establish the price within 1-2% on most major properties here. And genuine prices, not agent spin, go right into the transaction records, almost immediately.

 

If you deal direct, with no agent's fee, then the price in the transaction record might be 1% lower, with both sides happy. And so, no agent in multiple sales, may mean less house price inflation.

This is a bit distorted, you employ an agent to introduce a buyer. If you advise an agent on price for how much you want to list/sell your property for sale; for the agent to find/introduce a buyer, and if the agent can only supply offers under your market expectation, after agreed sale commission in the listing contract, the integrity is with the agreed listing (agent authority to sell) contract where commission is agreed for introducing buyers to the sellers. Then it is up you as the seller to either refuse the offer or counter offer the original offer.

 

May I ask, do you have an issue with parasite industries?

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This is a bit distorted, you employ an agent to introduce a buyer. If you advise an agent on price for how much you want to list/sell your property for sale; for the agent to find/introduce a buyer, and if the agent can only supply offers under your market expectation, after agreed sale commission in the listing contract, the integrity is with the agreed listing (agent authority to sell) contract where commission is agreed for introducing buyers to the sellers. Then it is up you as the seller to either refuse the offer or counter offer the original offer.

 

May I ask, do you have an issue with parasite industries?

 

Haha.

Actually, here in HK, this market is highly transparent (and also extremely competitive for the agents), and as an active participant who owned 9 properties in a single project, there is an excellent chance that I know the market better than most agents, particularly if their office is not in the same building. I don't need to have them "advise on the price."

 

Take a look at this: http://www.centadata.com/cci/cci_e.htm

(and scroll down to Caribbean Coast.)

 

A Historical Comparison between Mass Market Index (MMI) and Caribbean Coast

ccnov2009.jpg

 

 

If the agent delivers a buyer at my price, I pay a 1% commission. On top of that, I am offering him a mechanism to get a lower price. If he choses to use it, he will have to "share the haircut." If he doesn't want to, I have four other major agents I can deal with, and they are all hungry for business. I am completely above board and straight-forward in how I deal (and also polite to the agents), and the agents I know seem to appreciate the business that I offer to them in this way.

 

When I sign the contract, agreeing to pay a 1% commission, I say; "That's only agreed if you achieve my target price," and then I may explain what I mean by that. If an agent got on his "high horse" and said: "You signed a comtract - of course you will pay 1%." Then, I would say: Thanks very much for pointing that out. I have other agents who are working to get my target price. It is up to you, if you want to ask me to accept something lower, but I will only do it, if we share the haircut.

 

In effect, I am reminding the agent whom he works for.

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Haha.

Actually, here in HK, this market is highly transparent (and also extremely competitive for the agents), and as an active participant who owned 9 properties in a single project, there is an excellent chance that I know the market better than most agents, particularly if their office is not in the same building. I don't need to have them "advise on the price."

 

Take a look at this: http://www.centadata.com/cci/cci_e.htm

(and scroll down to Caribbean Coast.)

 

A Historical Comparison between Mass Market Index (MMI) and Caribbean Coast

ccnov2009.jpg

 

 

If the agent delivers a buyer at my price, I pay a 1% commission. On top of that, I am offering him a mechanism to get a lower price. If he choses to use it, he will have to "share the haircut." If he doesn't want to, I have four other major agents I can deal with, and they are all hungry for business. I am completely above board and straight-forward in how I deal (and also polite to the agents), and the agents I know seem to appreciate the business that I offer to them in this way.

 

When I sign the contract, agreeing to pay a 1% commission, I say; "That's only agreed if you achieve my target price," and then I may explain what I mean by that. If an agent got on his "high horse" and said: "You signed a comtract - of course you will pay 1%." Then, I would say: Thanks very much for pointing that out. I have other agents who are working to get my target price. It is up to you, if you want to ask me to accept something lower, but I will only do it, if we share the haircut.

 

In effect, I am reminding the agent whom he works for.

Yes thanks this clarifies it nicely, so in essence the agent firstly agrees to your terms in the initial consultancy. I have no issue with this and somewhat respect this approach.

 

Yes agents do need at times gentle reminders in regards that they mostly work for the seller. Sometimes you do get the impression its the other way around.

 

Just out of curiosity, so actual recent sales data is ready available to the public? Often people base their research on public advertised listing prices as market value, which in fact may not necessarily reflect actual sale price of the asset. To give example a recent receiver tender campaign achieved a 60% sale price reduction near where I live. Although in early 2008 it was purchased for $2.97m AU. Current sales data only reflects the former sale price. Then to go further bank valuations are coming in lower which in effect may not reflect either if based on recent sales data. (general lag time from sale of asset 3 months)

 

Its definitely going to be a tough game for agents. Back to the original topic, in my own experience trying to sell a house on my own was quite difficult and somewhat costly. Agents I suppose have their overheads as well, which may perhaps justify their fees.

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Just out of curiosity, so actual recent sales data is ready available to the public?

Often people base their research on public advertised listing prices as market value, which in fact may not necessarily reflect actual sale price of the asset. To give example a recent receiver tender campaign achieved a 60% sale price reduction near where I live. Although in early 2008 it was purchased for $2.97m AU. Current sales data only reflects the former sale price. Then to go further bank valuations are coming in lower which in effect may not reflect either if based on recent sales data. (general lag time from sale of asset 3 months)

Available when: almost immediately. You really have no concept of how quickly this market operates. I look at the UK market, and it seems to me as if it is operating in the stone age, not the 21st century. I will give you some examples....

 

A new sale usually gets published on the Agent's websites within a day or two. If your agent doesn't tell you about a relevant sale (and sometimes you have to ask), then you can find it on another agent's site, or it will show up in the bank valuation fairly quickly.

 

Let's run through a example based on fact:

 

photo-1_revised.jpg

Caribbean Coast in Tung Chung

 

SELLING PROPERTY IN HONG KONG - how to get the agents to work for you.

==========================

 

Suppose you bought a CC* property in January 2007 at HK$1.86 million

...and it was 729 sf - You paid: $2,551 psf.

 

You might make a note of the index at that time:

: Centaline's Mass Mkt Index was : 52.09 (and x46 would be: 2,396)

and the

*Caribbean Coast average was $2,530 psf (Estimate, I don't have the actual figure)

 

The flat was new (never lived in) and on a high floor, so you thought you got quite a good deal,

by paying only a tiny premium to the index figures

== ==

 

Later, you want to sell it, and so you check the index levels and you see (5 weeks ago):

: Centaline's Mass Mkt Index was : 78.65 (and x46 would be: $3,618)

and the

*Caribbean Coast average was $3,575 psf (actual figure)

 

So you decide that a "fair value" might be: $3,750 psf or HK$2.73 million.

But you think the market looks healthy and is still rising, so you put it on the market at $2.88 million,

by listing it with three or four agents in the local area, telling them: "I know it is above market, but lets see if

the market moves up. But I have very little room to come down on my asking price."

 

At first, they show no interest, but a week or so later, they start phoning to ask you: "What is your bottom price?"

 

You respond: "Do you have a real interest, or are you just asking me to lower my Offer?"

 

One or two say they have a real interest, and you might tell them, "If I sell today, my price is $2.86 million.

If you want me to accept less than that, you will have to take something off your commission."

 

You get offers ("almost firm, but no contract signed yet") at $2.80 and $2.82 million, which you decline, saying:

"The market still looks firm to me, and I would rather wait, thank you."

 

.... Meantime, you note these changes in the market ...

 

WeekEnded : HangSI- SQx22: Hk12 :: CCLI : MMIdx ... MMI x46 / CaribC

07/25/2010 : 20,815 - X,xxx : 48.65 :: 81.88 : 79.35 ... $3,650 / $3,777 :

08/01/2010 : 21,030 - X,xxx : 48.35 :: 82.14 : 79.73 ... $3,668 / $3,834 :

08/08/2010 : 21,679 - X,xxx : 49.60 :: 83.51 : 81.26 ... $3,738 / $3,850e

08/15/2010 : 21,072 - X,xxx : 49.90 :: 83.36 : 80.86 ... $3,720 / $3,757 :

08/22/2010 : 20,981 - X,xxx : 48.00 :: 83.57 : 81.03 ... $3,727 / $3,809 :

 

The market has moved higher, with MMI up maybe 2%, and the CC index less than that.

But the agents are telling you that there are few flats on the market, and there is real demand

for 2BR flats, so you creep your asking price up to $2.9 Million (= $3,978 psf.)

 

Several agents are calling, and you hint that you might accept a bit lower, like $2.88 million

to one or two that you are most friendly with.

 

Then another agent, from the office of an affiliate calls and says, "Will you still accept $2.9 Million."

 

You say, "Do you have a real buyer?" He says he does.

 

You reply, "Okay. That price is still good today but I am seeing other interest, so I may have to

move the price tomorrow." He confirms with you that you will pay 1% commission on $2.9 million.

 

He calls back later to check the details, and you agree to accept a $100,000 deposit, with the

balance of 10% to be paid within 2 weeks.

 

The buyer is happy to close in 45 days (which is normal in HK), and you say you prefer a longer close,

like 3 months - because you want to go on collecting the rent for a few more weeks. The buyer

agrees and accepts your further condition that he pay another 5% in September, meaning that

85% will be paid on closing in November.

 

That's how it works in HK. Do you think I need an agent "to advise me on the market?"

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Available when: almost immediately. You really have no concept of how quickly this market operates. I look at the UK market, and it seems to me as if it is operating in the stone age, not the 21st century. I will give you some examples....

 

A new sale usually gets published on the Agent's websites within a day or two. If your agent doesn't tell you about a relevant sale (and sometimes you have to ask), then you can find it on another agent's site, or it will show up in the bank valuation fairly quickly.

 

Let's run through a example based on fact:

 

photo-1_revised.jpg

Caribbean Coast in Tung Chung

 

SELLING PROPERTY IN HONG KONG - how to get the agents to work for you.

==========================

 

Suppose you bought a CC* property in January 2007 at HK$1.86 million

...and it was 729 sf - You paid: $2,551 psf.

 

You might make a note of the index at that time:

: Centaline's Mass Mkt Index was : 52.09 (and x46 would be: 2,396)

and the

*Caribbean Coast average was $2,530 psf (Estimate, I don't have the actual figure)

 

The flat was new (never lived in) and on a high floor, so you thought you got quite a good deal,

by paying only a tiny premium to the index figures

== ==

 

Later, you want to sell it, and so you check the index levels and you see (5 weeks ago):

: Centaline's Mass Mkt Index was : 78.65 (and x46 would be: $3,618)

and the

*Caribbean Coast average was $3,575 psf (actual figure)

 

So you decide that a "fair value" might be: $3,750 psf or HK$2.73 million.

But you think the market looks healthy and is still rising, so you put it on the market at $2.88 million,

by listing it with three or four agents in the local area, telling them: "I know it is above market, but lets see if

the market moves up. But I have very little room to come down on my asking price."

 

At first, they show no interest, but a week or so later, they start phoning to ask you: "What is your bottom price?"

 

You respond: "Do you have a real interest, or are you just asking me to lower my Offer?"

 

One or two say they have a real interest, and you might tell them, "If I sell today, my price is $2.86 million.

If you want me to accept less than that, you will have to take something off your commission."

 

You get offers ("almost firm, but no contract signed yet") at $2.80 and $2.82 million, which you decline, saying:

"The market still looks firm to me, and I would rather wait, thank you."

 

.... Meantime, you note these changes in the market ...

 

WeekEnded : HangSI- SQx22: Hk12 :: CCLI : MMIdx ... MMI x46 / CaribC

07/25/2010 : 20,815 - X,xxx : 48.65 :: 81.88 : 79.35 ... $3,650 / $3,777 :

08/01/2010 : 21,030 - X,xxx : 48.35 :: 82.14 : 79.73 ... $3,668 / $3,834 :

08/08/2010 : 21,679 - X,xxx : 49.60 :: 83.51 : 81.26 ... $3,738 / $3,850e

08/15/2010 : 21,072 - X,xxx : 49.90 :: 83.36 : 80.86 ... $3,720 / $3,757 :

08/22/2010 : 20,981 - X,xxx : 48.00 :: 83.57 : 81.03 ... $3,727 / $3,809 :

 

The market has moved higher, with MMI up maybe 2%, and the CC index less than that.

But the agents are telling you that there are few flats on the market, and there is real demand

for 2BR flats, so you creep your asking price up to $2.9 Million (= $3,978 psf.)

 

Several agents are calling, and you hint that you might accept a bit lower, like $2.88 million

to one or two that you are most friendly with.

 

Then another agent, from the office of an affiliate calls and says, "Will you still accept $2.9 Million."

 

You say, "Do you have a real buyer?" He says he does.

 

You reply, "Okay. That price is still good today but I am seeing other interest, so I may have to

move the price tomorrow." He confirms with you that you will pay 1% commission on $2.9 million.

 

He calls back later to check the details, and you agree to accept a $100,000 deposit, with the

balance of 10% to be paid within 2 weeks.

 

The buyer is happy to close in 45 days (which is normal in HK), and you say you prefer a longer close,

like 3 months - because you want to go on collecting the rent for a few more weeks. The buyer

agrees and accepts your further condition that he pay another 5% in September, meaning that

85% will be paid on closing in November.

 

That's how it works in HK. Do you think I need an agent "to advise me on the market?"

Gosh no, when you put it that way you are quite right that I have no idea outside my own system. So really your local agents are maintaining sales data always updating. Here it relies on the state governments stamp duties to process the sales data. I think local agents here in Australia can learn alot from this system; having said that though we do have the big internationals mainly in the CBDs, but they don't really share data unless you are a seller of a shopping centre or similar.

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Gosh no, when you put it that way you are quite right that I have no idea outside my own system.

So really your local agents are maintaining sales data always updating. Here it relies on the state governments stamp duties to process the sales data. I think local agents here in Australia can learn alot from this system; having said that though we do have the big internationals mainly in the CBDs, but they don't really share data unless you are a seller of a shopping centre or similar.

Sure they maintain data.

If they cannot talk convincingly about what is happening (transaction wise) in the local market, and in an up-to-date way, why should anyone speak to them? Otherwise it may be better for the client to try to sell a property himself, a la HouseWeb.

 

Here's an example of the data that the biggest agent (Centaline) offers on the Tung Chung market where most of my flats were located:

 

http://www.centadata.com/pih09/pih09/estat...PP&lang=eng

chart000072.png

Transactions: http://www.centadata.com/pih09/pih09/estat...PP&lang=eng

 

There are about 5,000 flats in Caribbean Coast, and maybe about 100 sales transaction in Tung Chung a month, so it is worth doing.

 

Do agents in Oz do less for big estates?

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Sure they maintain data.

If they cannot talk convincingly about what is happening (transaction wise) in the local market, and in an up-to-date way, why should anyone speak to them? Otherwise it may be better for the client to try to sell a property himself, a la HouseWeb.

 

Here's an example of the data that the biggest agent (Centaline) offers on the Tung Chung market where most of my flats were located:

 

http://www.centadata.com/pih09/pih09/estat...PP&lang=eng

chart000072.png

Transactions: http://www.centadata.com/pih09/pih09/estat...PP&lang=eng

 

There are about 5,000 flats in Caribbean Coast, and maybe about 100 sales transaction in Tung Chung a month, so it is worth doing.

 

Do agents in Oz do less for big estates?

 

Depends on price, for the really big estates 1% is not uncommon, but usually around 1-2% plus advertising. Difference being the inital consultancy usually the commission fee is negotiated up front. It has been known for agents to reduce comms to get the deal over the line.

 

At the moment it appears property prices both residential and commercial are heading south, more so land.

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Depends on price, for the really big estates 1% is not uncommon, but usually around 1-2% plus advertising. Difference being the inital consultancy usually the commission fee is negotiated up front. It has been known for agents to reduce comms to get the deal over the line.

 

At the moment it appears property prices both residential and commercial are heading south, more so land.

In HK, there's a commission (1% is normal - sometimes negotiated a bit lower) on both sides: Buyer and Seller pay.

Have you got the same in Oz?

 

BTW, did you notice in Blue chart above, that volume has dried up as the index hit new highs?

That in itself is a bearish indication. This is why it is so great to have this sort of data. Else you are operating blindly.

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In HK, there's a commission (1% is normal - sometimes negotiated a bit lower) on both sides: Buyer and Seller pay.

Have you got the same in Oz?

 

BTW, did you notice in Blue chart above, that volume has dried up as the index hit new highs?

That in itself is a bearish indication. This is why it is so great to have this sort of data. Else you are operating blindly.

 

 

Actually you can employ a buyer's agent. So in essence its basically quite similar.

 

Yes I did notice the chart. I do think it does reflect a cooling market. Real estate in general seems to be showing a world pattern of price decline; plus takes longer to sell.

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Actually you can employ a buyer's agent. So in essence its basically quite similar.

 

Yes I did notice the chart. I do think it does reflect a cooling market. Real estate in general seems to be showing a world pattern of price decline; plus takes longer to sell.

Why would you do that?

If you have time, and know how to negotiate, part of the fun is in the chase.

 

"Buyer's Agents" are for lazy rich people IMHO. Do you think they can really do better than a smart buyer can do on his own?

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Why would you do that?

If you have time, and know how to negotiate, part of the fun is in the chase.

 

"Buyer's Agents" are for lazy rich people IMHO. Do you think they can really do better than a smart buyer can do on his own?

This is the key point; to your debate, "if you have the time" and "know how to negotiate". Many don't have either the time or the experience/s. Some people prefer the services of an agent. I wish there were ways to remove so of those expensive legal fees.............as it seems when making any sort of asset purchase there seems to be always fees (fleas)

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This is the key point; to your debate, "if you have the time" and "know how to negotiate". Many don't have either the time or the experience/s. Some people prefer the services of an agent. I wish there were ways to remove so of those expensive legal fees.............as it seems when making any sort of asset purchase there seems to be always fees (fleas)

A good agent can save money for rich folks in a hurry.

 

Question:

What test should a buyer use to choose an agent (for buying or selling) ?

 

As a seller, I can just take my transaction to several, and see who delivers the best buyer. No problem.

But as a buyer, I think I need to invest some serious time in researching the market, and viewing myself

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WILL WE SEE A SEA CHANGE in how UK EA's talk to their clients?

 

Significant fall on Nationwide Index.......

Average Price £166,507

MINUS 0.9% MoM

Combined with the very sharp drop in transactions, this means that Housing Demand is disappearing fast.

If EA's want to stay alive, they are going to have to get VERY AGGRESSIVE at talking down selling prices !

 

I have a simple theory:

+ In a bullish market, the job of the agent is to talk the buyers up to/near the Seller's price, and

+ In a bearish market, the job of the agent is to talk the sellers down to/near the Buyer's price.

 

I am sure that all agents know this, whether consciously, or unconsciously.

 

Anyway, I think you are about to see a DRAMATIC CHANGE in how EA's describe the market, especially to sellers, compared with how they approached it 2-3 months ago, when some still though the market was rising.

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It's the EA's responsibility to get the best price for their customer (seller). Of course the best price may well be 15% off todays asking price (if that is 15% more than they would get in 12 months time). It's just a matter of interpfretation.

I get your point, of course.

But you could also they, their real job is to get the sale done.

And in a FALLING market such as the UK now, where Buyers gain by waiting, it means:

 

+ Get the Buyer to bid firm, and stay firm (at a "reasonable" price not too far below last done), and

+ Talking the Seller down to hit the "reasonable" bid

 

ALL ELSE, is basically a waste of time and energy, and a denial of the realities of the current market.

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Estate agent tells me they have rejected an offer of 240K.

 

Conversation:

 

You : "We liked the property, and might consider making an offer.

E A : "That's great. But I want to tell you that they have had offers already."

You : "Is that right? What sort of level was that."

E A : "They have rejected an offer of 240K."

You : "Well that surprises me. Sounds like a generous bid. When did they get it?"

E A : "About three weeks ago."

You : "I see. I think the market is showing signs of weakness now. Have they had any better?"

E A : "No. They are awaiting better offers. Do you want to make one."

You : (laughs) "Not at that sort of price."

E A : "What price?"

You : "Quite a bit lower, actually. In fact, here's what i'd suggest: Call me if and when they drop their selling price."

E A : "I doubt that they will. But what is your level? I'd like to go to my client with something."

You : "It would be below 240K. So when they are asking that much, I will counter it with an offer."

E A : "You are not able to give me a price?"

You : "Not now, you'd just laugh. And your client will reject it. He needs to see how few buyers are around,

and then he might get serious."

 

E A : "Okay. I will talk to my client."

 

Looks who is running this negotiation. It doesn't need to be the Estate Agent.

The real trick is... not minding if you don't get the property. There's a load of supply on the market.

So why worry?

 

If he does come back, what then (assuming you are willing to pay 230,000...

 

E A : "I have good news for you. My client is now willing to accept 240k."

You : "Good. I am happy to hear that they have become more realistic."

E A : "Can you match that old 240k bid?"

You : "Not now. That's above our budget. But we are also looking at another property now."

E A : "I see. So what can you pay?"

You : "I can make you an offer now at 225k."

E A : "That's all?"

You : "Well, I can come a little higher, but not much. Your client is going to have to make the big move."

E A : "I think he is stuck at 240k."

You : "Oh, that's too bad. I suppose we should chase that other house then?"

E A : "No. I want to try this. Can you give us your best offer now, and save time."

You : "You can probably get me up to 228K, maybe a touch more."

EA : "Is that an offer?"

You : "No. I just want to give you an idea of where we may be headed. I can give you 225K firm

for the next three hours. If you want to counter it, let me know. But if I don't hear anything back,

we will be inspecting the other property for the second time (tomorrow)*."

 

== ==

 

*I think it is best to be honest. I assume that most buyers will be looking at more than one property.

But you need not be as serious about that other property as I am suggesting here.

 

 

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MORE ON NEGOTIATION

 

/this is from HPC: http://www.housepricecrash.co.uk/forum/ind...50344&st=30

 

Bubbs strategy is pretty similar to ours - you have to be ready to walk away at the drop of a hat.

 

We start evaluating the property from similar properties sold and basically ignore asking price. Obviously if similar properties are selling for 240K and the vendor is asking 300K there's a huge disconnect with reality and it's probably not even worth a go. However, if they're asking 10% more, we'll sound out the agent and find out if there's any indication of financial stress, etc. which may motivate a quicker sale at less than asking.

 

H: I'd like to drop by tomorrow morning to discuss placing an offer on property X.

EA: Great. Can I ask what price you're thinking about?

H: I'd prefer to discuss that in person tomorrow. Can you ensure that the vendor is available tomorrow to review the offer?

EA: OK.

 

Next morning:

 

H: Here's our offer (usually about 90% of market value).

EA: Oooh. It's a bit less than they're hoping for. I'll certainly present it to them, but if they're not happy what would you be willing to pay?

H: I'm willing to pay what's on the offer. It's non-conditional but for the following: We require 7 days for a survey. The offer's good till midnight tonight. If they accept we have financing arranged and can complete in 4+ weeks.

EA: I'll give it my best shot.

 

Later:

 

EA: The vendor is a little disappointed in the price offered - would you consider upping it to X?

H: No.

EA: Well you see - blah, blah, blah....

H: Well thank you for trying. As mentioned, the offer is still good till midnight tonight.

 

Basically, we go in with a price we're comfortable with, no conditions on the offer, financing and a very short time period to contemplate the offer. The price is usually less than perfect for the vendor but the security of a chain-free sale is worth something to a lot of people. Plus, there's no value to the purchaser to give them a bunch of time to counter-offer: There are few unique houses so why waste time negotiating with Vendors when you can simply move on. Selling a house is stressful for most people so give them very little time to think about the offer, and no reasons to think it'll fall apart if they accept it.

 

The notion of lecturing the vendor into submission, or offering X-2% per week is ludicrous. They'll mark you as a goofball and won't take you seriously. The best negotiation strategy is a cool head, know what you want to pay, pile on the pressure, and be very, very, very quick to walk away.

You sound like an experienced negotiator.

In Hong Kong, where we bought 10 properties, and sold 9 so far, I think it makes sense to keep a little room for negotiation.

 

The local market custom here is that both the buyer and seller pay a 1% commission. One trick we use here is to get to our "target" price, and then tell the EA that if he wants us to move further, then he must take HALF the amount we move off his commission.

 

As an example, if we were SELLING AT 240k, and he wanted us to come down to, say, 236k, then in some circumstances we would consider it, but only if the 4k difference was split 50/50, with us cutting the price to 236k, and the agent reducing his commission by 2k. The point of this, is that the agent will work extra hard to bring the buyer up to our target price, since it will make a significant difference on his commission.

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... more ...

QUOTE ===

TheCountOfNowhere, on 03 September 2010 - 09:47 AM, said:

Anyone buying or thinking of buying should read this...learn this scenario and act it out.

It put's the shoe on the other foot.

Best post on HPC i've seen,well done.

UNQUOTE===

 

Thanks. Actually, I have had a bit of experience in this area.

 

My aim is to be sincere, clear, and respectful of the agent and the vendor too. This makes for a more relaxed atmosphere in the negotiations, and maybe a more fruitful one too.

 

I even go to the extent of not being disappointed when I fail to complete a negotiation, because someone else comes in at a better price. In those cases, I hide my disappointment, and I congratulate the agent on getting a good price for his client. I want to disarm the agent, and make him feel that I am someone easy to deal with.

 

But through all this... I AM VERY FIRM on my price ideas. I let the agent know that I have made my mind up on price, and I tell him that he doesn't need to waste his energy in trying to persuade me to move my price.

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