The Times went to town with an all-out attack on estate agents at the weekend.
On Saturday’s front page, the story was run under the headline “Estate agents dupe sellers”.
The sub-heading was: “Owners misled into paying higher commission after properties overvalued”.
The story accused agents of routinely over-valuing “by up to a fifth in a practice that can mislead sellers into paying higher rates of commission”.
It said that the practice is “rife”.
The front page story went on to say: “The properties then sell at lower prices, but the agents take big fees.”
As well as a front page story, The Times devoted a leader to it, and there were pieces by property editor Anne Ashworth and from the anonymous agent who writes the ‘dodgy London agents’ blog.
The story specifically picked out Foxtons, saying that nearly two thirds of its properties had price reductions.
Second behind Foxtons was Express Estate Agency, which sells homes quickly.
The ‘top ten’ price-slashing agents out of a list of 45 were named as:
Foxtons
Express Estate Agency
Chancellors
Romans
Barnard Marcus
Gibbs Gillespie
Cubitt & West
Hamptons International
Fox & Sons
Leaders
NAEA chief executive Mark Hayward was quoted as saying that not all price reductions were due to over-valuing, although some unscrupulous agents would win business by quoting a higher asking price.
Hayward said: “It may be the seller requires a quicker sale.” But he added: “These figures do not put the industry in a good light.”
Anne Ashworth’s comment piece appeared under the headline “Desperate agents and vain owners need reality check”.
The anonymous agent – quoted for the second week running by The Times – claimed that agents “will often over-value a property and allow it to languish on the market for months and sometimes years”.
He claimed that agents are “happy for the price to be too high for the first eight to ten weeks” of marketing where they have exclusivity for 12 to 16 weeks.
The Times also on Saturday launched an interactive tool based on 200,000 homes sold subject to contract on Zoopla in December.
The database is searchable by postcode, allowing you to see which local agents have reduced houses the most.
When EYE searched our local postcode, we found that Waterfords’ “average price change” was a reduction of 14.3%, followed by Purplebricks with an average reduction of 9.1%.
In both cases, the firms’ “average” price reduction was based on the sale of only one property.
The damning coverage by The Times – with its central claim that owners are misled into paying higher commission after their properties are over-valued – may have partly backfired.
Comments included some showing utter incredulity.
One poster questioned: “Why isn’t commission paid only on the price the property sells for?”
To which another responded: “It is paid on the actual selling price. The article is misleading, over-valuing does not increase commission, but it does induce some sellers to go to one agent because he is suggesting a higher selling price than another. The answer is to get say three valuations and compare.”
One poster said over-valuation was driven by “human nature – on the part of sellers”.
Another said the accusations by The Times were “wildly inaccurate, sellers only pay commission on the achieved sale price, not the asking price so they are not overpaying anything”.
However, there were also a number of comments damaging to the industry, calling agents ‘spivs’ and similar, with one suggesting that estate agents go on training courses on “how to fleece their customers”.
A spokesperson for Zoopla told EYE: “We can confirm that we did not work with The Times on their investigation.”
Comments (27)
I only agreed to pay a fixed fee when selling my last place as it was through the company I worked for, and it was £1k including VAT. It was a small flat, so round about 1%, which I was fine with.
I would never choose to go for a fixed fee, always a percentage!
Guessing agents NOT on Zoopla breathing a small sigh of relief?
Naughty tactics… we work on a percentage of the actual sold price, not the original asking price. Therefore its in our interests to get the best price for the vendor/s!
The biggest culprit in our area at the moment is Purplebricks – they are massively overvaluing. The obvious reason is so that the local rep gets his £250, for listing, and he isn’t that bothered about his £25 that he gets IF it sells.
Most agents seem to be missing the point. And that point? The Times is going after estate agency, and any amount of whining won’t make them go away. The next article? My guess is agents inflating their Google scores by cherry-picking ‘happy’ clients to write reviews.
Sensationalist nonsense.
Why are the public always assumed to be incoherent vegetables? They’re as much to blame as the stupid agent trying to meet some daft directive from up above.
In this day and age, with the tools at everyone’s fingertips, you frankly need your head examining if you sign up to a fixed fee.
Nice to see Mark Hayward doing nothing again to support agents, the NAEA is so weak.
Fair Play to the agents listed in getting higher fees. Agents moaning about it are probably the ones dropping their fees.
Maybe the Times should accuse the Instant Valuation Tools and AVMs on ZPG and the rest for some of the causes of supposed overvaluing! Ive lost count the amount of times I have turned up and the seller has researched Zoopla and pushed to get a high price to go on. Despite overwhelming fact that the price will be too high. The Times yet again are not reporting with any degree of accuracy. In all cases a property has 2-3 weeks to find the market reaction at its first listed price and then with the evidence of feedback adjusted closer to the right level causing a sale. No one agent puts a gun to the sellers head over price or comms.
We all know there are serial offenders, but fundamentally sellers hear what they want to hear. I’m amazed how many times when querying my “low” valuation I discover the other agents had provided no comparable evidence at all, but the line “they must know, they’re all local agents” is a satisfactory defence.
That list of agents could be utilised for those that caused the tenant fee ban
When I first start at Connells as a lister, I can clearly remember my area director telling me to ‘always add 10k to the true price’ to make sure I won the instruction ‘and then get them to reduce a few weeks later’. I tried it a few times, felt terrible lying to people, and so never did it again. The fee was always fixed as well.
I had exactly the same experience at Connells. add 10k and bring it down and tie them into long sole agency. Never again.
Sadly t’was ever thus. Prostitution and over valuing by agents are as old as time. An agent prostitutes his professionalism by telling a gullible and ignorant potential client what they want to hear or what they feel it may take to win their instruction.
No offence intended to the client, but without transparency and a position of knowledge at the time of instruction, they are hopelessly ill equipped to distinguish the professional from the “Johnnie come lately” or bullying corporate with his/her ludicrous valuation.
I recently encountered a truly distressed widower who was locked into a 4 month agreement, with 1 months notice, who realised his fee was locked. The recommended price was completely untenable, then he was promptly beaten down to accept a figure some 30% below, yet the fee remained at the original price.
Some agents may argue that this is a just penalty for ambitious clients; to which I have some sympathy, as we all encounter time wasters on occasion.
If an agent is confident in their ability and in performing their role to their client’s satisfaction, why do they need any fixed term? I’ve not had one for 15 years.
Prostitution requires an upfront payment as there is not necessarily a guarantee of a satisfactory experience and even if there is, no one really wants to pay afterwards. Proper Estate Agency still offers the public an opportunity of an initial free advisory service and plenty of time, for vendors to research, post sale epithets of “you sold it to the first person who looked”, “I know the buyer, he is my 10th cousin” and “the property is held in Cayman Islands Trust to which I have no connection”(Source: http://www.Vendor Don’tWannaPayCreativeSolutions.Com)
Its up to the vendor what they agree if they don’t like it then don’t sign up Simples… Banned Tenant fees! what next Ban Vendor commissions??
Er…probably. Unless the profession cleans house.
From the blog referred to above:
“I looked at the 100 agents with the most listings across North London (N1, N4, N5, N7, NW1 and NW3). For each agent I gave myself 1 minute to find an example of a relisted, manipulated or very Old listings. What I found was that 62 out of these 100 agents had engaged in one or more of these practises.”
This was covered last week by the Times.
The Times is a Red Tabloid nowadays. They are misleading their readers (clients) by still claiming to be a serious black headline newspaper. Shame on you lazy editors for not understanding or learning more factual evidence…
Can anyone else smell a distinctive, over-powering whiff of ‘Essexy Ego’ about this? An unpleasant pong of resentment and failure perhaps? Where on earth is it coming from I wonder!
Can none of you guess who is behind the series Times articles knocking honest tradition estate agency?
TBH no idea at all, but it certainly is a Quirky approach.
I’ll put my neck out here and say good effort to those 10 firms. Whilst no one is saying over valuing doesn’t happen and has been around for decades, any good firm should be price reducing to get their client a sale once they’ve sobered up to the fact that their house isn’t worth what they initially thought it was… especially in the current climate.
Yep. It’s the evolution of the client expectation. Reason those agents were named is because they haven’t gone bust.
No seller instructs the cheapest agent.
Maybe we should have surveyors value a house first and take all market forces out of the equation. What a joke.
I dispair at the increasingly shabby standard of reporting by the Times and ST. This tatty article took 4 reporters to assemble some information that a GCSE student could have achieved. It only uses Zoopla data, so is woefully short of being authorititive on the matter. And what of Zoopla’s involvement in this?
Head. In. Sand.
The fact is we’re encouraged to offer a fixed fee, for the reasons of duping the customer. After overvaluing their homes they were then hitting them hard with price reductions (encouraged by upper management).
FWIW, I’ve worked for three of those on the times list – all did exactly the same.
Some of us still play with a straight bat
In regards to comments made agents only get paid when it sells. This is true.
However I know a number of agents in this story fix their commission as a percentage on the price the property comes on the market. If the vendor reduces or accepts a lower offer this is not reflected in the agents commission.
Another case of agents being an easy target. Antiagentism ..
Iam totally confused. Purplebricks and the payanyway model is rife in our area for overpricing property. The model is totally guilty of it.
Total populism by the times. I don’t be buying it again.