Now be honest

On Wednesday 8th July 2020 stamp duty land tax was eradicated – well, almost.

The temporary reprieve will have the desired effect – to inject a big dose of adrenaline into the property market. However those commentators that think that Rishi Sunak must just have a soft-spot for estate agents and that his motivation was one of nicely increasing transactions, are wrong. Obviously.

I’m sure Rishi is a nice bloke and all that but his decision to wipe another £4bn or so from the Treasury’s P&L is much more contrived and is of course purely designed to push up house prices.

This is bound to delight agents and home-owners alike but will, as ever, antagonise would-be first-time buyers, Guardian readers and the ‘anarchists’ at Shelter.

You see Rishi has to be a big picture guy and knows the importance of the housing market to the wider economy.

Not only do rising property prices feed positive sentiment and make owners feel good about spending money on consumer goods but also, monthly reports of a buoyant market fuel the government’s rhetoric that ‘things are going to be ok’.

The prospect of repeated gloom in the monthly stats may be welcome to some of the doom-mongers out there (you know who you are and I’ll be cashing in my bets soon) but it’s certainly not great for economic optics.

Yes, the consequence of this beautiful interference in our market is that buyer activity will soar. In fact it’s already soaring and the Rightmove and Zoopla PR spinners et al are consequently now locked in battle, churning out news of ever bigger daily increases in traffic/enquiries/impressions and so on.

I think On The Market may even have had a couple of website visitors too and so things must be looking up.

It’s certain that this increase in buyer demand will lead to a subsequent rise in prices as homes sell faster and choice becomes scarcer.

Positive sentiment will translate to those that had sat on the fence for a while, previously plagued by Brexit, Covid and political tomfoolery and who were hesitating as to whether to buy a property.

All good…

But wait, the upbeat news now presents a problem for you as an estate agent. Because with great power comes great responsibility.

If you thought that your competitors were already minded to provide exaggerated values to would-be sellers in order to secure an instruction, even in a fragile market – just wait until you see what fantastical ‘values’ they place on each property they appraise now in what is to become a much hotter market.

It’ll make Aesop and Enid Blyton look like amateurs in story-telling. Grimm even.

I reckon the next few months is yours to lose if many of you try to trump each other by placing higher and higher values on your appraisals in order to bag the listing.

In the small window of opportunity that now exists it’s sadly likely that instead of selling more homes as a proportion of your stock, you instead list a load of properties at too high a price and consequently simply grab defeat from the jaws of victory.

Why not just be honest instead? A novel concept for some perhaps, but nonetheless rather important in the coming months.

Because did you know that around 60% of properties listed, sell via the second agent subsequently instructed, not the first?

In other words, by overpricing and trying to boast to your Regional Manager that you’ve ‘listed ten this week’, your collective obsession with vanity metrics rather than with actual banked completions, merely hands victory to the next agent.

Anyway as I type this I can already picture the comments racking up below, anonymous of course, that state ‘We never purposely overvalue. It just doesn’t happen’. Well, genius, it does.

Or else please explain to me why so much stock a) languishes on the market for months even in ordinary times and b) a massive proportion of stock is reduced in price before it sells?

We all know the swerve – exaggerate the valuation, insist on a 16 week sole agency agreement and then push for a reduction after a few weeks.

Corporates are especially good at this and I hear that some are even formally trained to do it. I call it the ‘sole agency trap’ and it’s sprung on unsuspecting home-sellers day in and day out.

Be honest. And of course not just honest with yourselves but also with your vendor.

Yes, I know they say they ‘need [x] pounds’ because of [insert ridiculous reason] but isn’t it actually your job, rather than to pucker up and take the pain, to explain professionally using comparables and data, exactly why the true value is actually something a little different to that which their mate in the pub has told them?

I used the word professionally just then. I don’t do so very often when talking about UK estate agents. But I continue to live in hope for a future outbreak of such.

Rishi Sunak, Chancellor extraordinaire, has just handed you a golden goose of opportunity. Now it’s up to you whether you look after it and keep it healthy. Or whether you kill it.

What’s it to be?

Russell Quirk founded emoov, is PropergandaPR co-founder, and a director of Keller Williams (Essex).

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33 Comments

  1. Hillofwad71

    Priceless only Headphones would have the brass neck to waltz up here again with  another throwing of stones in a glasshouse

    ” Be  Honest”

     

    “If you thought that your competitors were already minded to provide exaggerated values to would-be sellers in order to secure an instruction, even in a fragile market – just wait until you see what fantastical ‘values’ they place on each property they appraise now in what is to become a much hotter market.”

     

    This is of course from someone who  valued Emoov  with the   fairytale value  of  £104m in the summer of 2018 to  sucker in some punters on Crowdcube to part with £2m .Then hastily reduced the valuation to £51m at the end of the crowdfunding

    They  then unfortunately  found out it was worth half of SFA   a few months later

     

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  2. mattfaizey

    I wonder how much he is paying PIE to post this drivel? I also wonder how bad PIE finances are that they need to publish this tripe

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  3. DerekSharpham

    Why make this personal? Smarten up and listen to the message.

     

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    1. Hillofwad71

      What is the message  other than personal and hypocritical ? The voice of experience? Ye of little faith  “Experience is a hard school but fools will learn no other”
        That all agents are essentially dishonest and that they are incapable of acting responsibly  or reacting to changing market conditions . Patronising at best  to many readers  here who successfully run their own  businesses  who havent had to go cap in hand  to investors with overblown valuations  
      Going about their daily businesss of giving good service and appropriate valuation advice   
       
       

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    2. Robert_May

      Why make this personal? Smarten up and listen to the message.

       

      A comment, as patronising as the article. The  Eye audience has been the target of Quirk’s disparaging negativity for 12 years, if anyone believes that audience needs or wants  advice from someone who has operated their business affairs far less successfully than most people in the industry they’re mistaken. They certainly don’t need to smarten up.

      In the past 5 years we have had the market uncertainty of  multiple elections, the referendum, the protracted uncertainty of  Brexit and Covid. What makes anyone think the industry, which has survived all that needs verbose, patronising advice from someone who didn’t?

       

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    3. smile please

      How anybody can take whatever RQ seriously is beyond me.

       

      He changes his narrative / opinion to suit himself.

       

      If he could sell his granny for a few quid he would.

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  4. Simon Bradbury

    Shouldn’t readers and posters debate the issues raised in this article rather than post insults about an experienced businessman and estate agent? ( and as for questioning P.I.E.’s financial motives for publishing these items… words really do fail me! )

    I was always taught to… “tackle the ball, not the man”. Address the issues not the provenance of the author.

    Which of the points raised in this well written article do you genuinely dispute?

    Personally, I think that persuading a prospective vendor to list at what we ( as a professional estate agent ) think is a realistic asking price to achieve the real market value ( whatever “real market value” actually means ) is a much underrated skill, particularly as the vendor can so easily be seduced into testing the market at an unrealistic asking price.

    I can see very little to argue with in this article, but I look forward to reading other contributions addressing the issues raised.

     

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    1. Simon Woodcock

      I would agree with you, Simon.

      Now more than ever a over priced listing is a liability, too many agents pride themselves on winning the business rather than actually helping the client.

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  5. Essjaydee51

    But it isn’t drivel, is it.

    i don’t like the man anymore than you for how he goes about his business but let’s be honest, on this he is whole heartedly correct, that is exactly what 90% of you do.

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  6. Countrybumpkin

    I am sure that RQ runs these articles with the full intention of winding everyone up in debate. I should imagine he has side bets as to who kicks off the blocks first in responding. When I got half way down the article and read the word honest, I had to stop and just double check that if surely wasn’t written by…

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  7. Property Poke In The Eye

    This guy waffles too much!!!  Dont see why PIE gives him this space.    PIE must be struggling for content I suppose.

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  8. Sunbeam175

    The fact that 60% of properties sell with the second agent is of no consequence to listers of corporate backgrounds because they are only interested in the listing as that’s where their bonus lies. The fact that it never sells and the poor negs back at the office get all the flack for their ridiculous overvaluing is of no consequence so long as they get their fee for listing. I’ve only this week found an agent getting vendors to sign 26 week tie in contracts which gives them plenty of time to get the price down to a saleable level and with corporates charging fees based on ‘initial listed price’ rather than ‘eventual selling price’ this practice will never end unless some sort of max tie in periods become law.

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  9. AndSotheStoryBegan

    I’m subscribed to property alerts on RM for KW Essex and more often than not, it’s a reduced price notification. Are they bad at valuing? Are they bad at marketing? Or perhaps they’re just not being “honest” with themselves?

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  10. padymagic

    Interesting, to a point.

    A: Value the property at it’s highest possible price based on supply and demand.

    B: Tell the vendor (if you are honest ) that you might have overpriced it, BEFORE YOU GO ON THE MARKET, Why? Simple, no matter how long you’ve been in the industry (and I count close to 4 decades) you never really know how well a house will perform until it’s actually up for sale and you’re generating buyer feedback.

    C: I’ve seen time and again colleagues shouting at the competitor saying “he’s over priced the house just to win the instruction”. It’s all very well being “Quirky Honest” but you wont win the instruction if your the lowest valuing agent.

    I have a very simple valuing system, I tell the vendor the truth. I actually say “So vendor, what happens if the price you and I think might sell at doesn’t in fact get any interest, what you gonna do? And lets talk about it now, not 6 months down the line”

    Guess what. Vendors sit up, listen and talk. They don’t need a valuing monkey, they need an estate agent.

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  11. brokerofexcellence

    Quirk and Smith’s continuous rambles on here are bringing the reputation of the site down.

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  12. MarkJ

    Patronising and fairly obvious …..Im not sure that PropergandaPR would be my first choice of PR agency.

    However I take the point….

    Option 1 – Overvalue to get the instruction/ delay a launch date 2 or 3 weeks trying to get valuations from prospective viewers/ end up with 20 potential viewers/ chain build

    Option 2 – Value realistically in local market you are in / launch quickly / shorter the chain the better.

    In current climes Id go with Option 2 every time.  Cash(flow) is king….

     

     

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  13. teddy

    Click bait title and troller content to provoke replies.

     

    If you don’t click on his posts and don’t post replies then he will be worthless to PIE.

     

    Last time I click on one of his articles.

     

     

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  14. NotAdoctor32

    Just because you don’t like the postman it doesn’t mean the letters are rubbish.

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  15. mark lock

    I laughed out loud at this article, then sent it to my team…who did the same.

    We love the agents that over-value, quote cheap fees and offer s*** service…it’s those agents that helped us become No.1 in our area.

    In my humble opinion, some of what he has written is of course quite correct…the rest is probably attention seeking.

    P.S. No anonymity here.

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    1. SoldPal90

      Good to hear Mark.

      We’ve all gone head to head with the listing agents and I don’t know about you, but I often go home and chunner to myself  about the jockey from up the road who makes my life so much more difficult.  I feel for the selling client at times I really do.  Some of the stuff they offer up would have made great TV for Ester Rantzen.

      Far too many listers about still for my liking.  Hopefully this market will flush them out forever.

       

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  16. scruffy

    Ignoring the personal jibes, justified or not, the issue for me is the distinction between an estate agent I would describe as a professional,and an agent who markets property amongst much else; whereby the sale instruction and its fee potential consequently represents a much less significant income stream and so his efforts on behalf of his client are proportionate.

    The former can be regarded as a professional in that the service and ethos of his company is to act in the best interest of his client at all times, earning his fee as a direct result. Those whose staff are targeted on referral business cannot make such a claim as their aim is to drive the maximum business opportunity from the instruction, be it from the client with bolt-on services and from all who show interest in it. The sale becomes almost incidental.

    The professional will give accurate advice on pricing, as his livelihood depends on it. The same cannot be said by those with other motives in mind, i.e. their own best interest.

    Indeed so diluted is the role of these “agents”, I fear that the term “agent” (defined as acting for another) is borderline inappropriate. Perhaps “property advertiser” might be better, although I am sure there are better suggestions out there

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    1. SoldPal90

      Yes, Double Glazing and Cavity Wall Salesmen many of the wrong ‘uns

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  17. Sdaltaf93

    Optimisim is good and although Russell has highlighted some of the industries dark practices (which will never change) he is wrong about the resurgence of the housing market, what we are witnessing are the final steps of the bull run before the collapse of the housing market which will be caused by the collapse of the fiat currency and will inevitably reset the housing market enabling the first time buyers to enter the market without receiving Government induced loans to propup a sector which forms the balance sheets of Banks which are insolvent. The housing sector is only one domino of many which will fall once the stock market bubble pops, Banks will go bankrupt, fiat currency will be replaced will a digital alternative underpinned by Gold and Covid will take the blame.

     

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    1. PeeBee

      Oh, looky here – more predictions from the one and only Prophet’n’Loss.

      If his words of wisdom (or should that be wisdoom) for the future are anywhere near as accurate as those posted a few short months ago about the imminent meteoric rise for PB shares. then we as an industry will have absolutely bot-all to worry about as the next megaboom is about to land – and stay with us for the next trillion years.

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      1. Sdaltaf93

        You are looking at a beautiful tropical view of a golden beach two hours before the tsunami arrives.

         

        The good agents offering service will survive but many will fail, the first to go will be those who fail to clear their overdraft each month followed by those hybrid models who rely on  crowdfunding or additional investment to fund their model without earning any money and that will include Purple Bricks and others.

        Once the stock market bubble pops everything will follow.

        Thank you peeb for those kind words and good luck in the future, you will need it.

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        1. PeeBee

          That’s quite a change of direction on the Purple front, Prophet’n’Loss.
           
          I doubt you’d be prepared to expand on why – but nevertheless, it’s good to know you’ve finally seen the light.
           
          As far as luck goes – I’ll take what comes my way.  I haven’t got a bad track record as far as good fortune is concerned – I’ve been lucky several thousand times in the past forty-odd years of my working life which is waaaaaay more times than when the luck didn’t run my way – so hopefully my lucky streak will continue for the next decade or so.

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          1. Sdaltaf93

            https://www.bbc.co.uk/news/business-53431056#

             

            Its started……..BOOM!

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            1. htsnom79

              Sweet Jesus it’s you again, sdaltaf93, welcome back 🙂

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      2. Ostrich17

        Same cowboy – different horse !

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  18. Mrlondon52

    This is old news. We know agents over-value and we know its a problem for the industry. We also know that often clients over-value their own properties and if they are fixated on a price it is very difficult to win the instruction by suggesting a lower figure.

    The bigger issue is that in this age of so much property data, we still see large variations in valuations. The market moves and people get caught out.

    As for RQ writing for PIE – he is there to stir the pot and he’s succeeding. Personally I don’t like his ethics from his crowdfunding at emoove but good luck to PIE.

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  19. James White

    A bit of a “non-piece” this Russell

    Overvaluing and long lock in Agency terms have been around for many many years, so nothing new here.

    Here’s a revolution though – our Agency terms have no time tie in – yes it makes us vulnerable to touting, but it also makes us easier to list with and easier to leave, thus creating an air of trust; and the stick  or carrot to get the job done properly from the get-go……

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  20. Sunbeam175

    Not exactly a revolution James as many agents do it but I do agree with you about creating trust. Far too many cowboys out there peddling nonsense just to gain a dishonest listing!

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  21. Thinker89

    “it’s sadly likely that instead of selling more homes as a proportion of your stock, you instead list a load of properties at too high a price”

    Why do you assume this Russell? I am the only ‘not overpricer’ in my small town and sellers are starting to see that we don’t have tons of unsold overpriced stock, we have regular turnover of properties.

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