In recent months there has been a drive by some property vendors to move away from the traditional estate agents and to look to sell their property by other means. Previously, many private websites had to be treated as Estate Agents by law but new government plans could be set to do away with that legislation and make the whole process much simpler.
The benefit of selling privately is obvious and anyone who is able to complete a sale in this way is able to dispense with estate agents’ fees. Private Websites offered a money saving alternative until they were brought under the estate agent classification but the government now plans to allow both types of business to operate under entirely separate rules.
This could lead to an even bigger move away from traditional forms of selling but there are those within the industry that are concerned over the proposals.
“These [planned changes] mean that prospective homebuyers and sellers will find it harder to distinguish between intermediaries and traditional estate agents,” said Peter Bolton King of the Royal Institution of Chartered Surveyors.
“Consumers could, perhaps unknowingly, be left responsible for undertaking their own detailed sale negotiations without the advice and guidance of a property professional.”
Mr Bolton King also felt that a greater move towards private sales could lead to more aborted transactions which could, in turn, impact on the property market as a whole.
“This could lead to delays, increased costs and even sales falling through, causing frustration and stress for all involved,” he added.
However, the government believes that the moves are necessary and that they will encourage and increase transactions in the months and years following their implementation. In short, there is a clear suggestion that lower fees might attract more vendors and lead to quicker completions.
One of the problems under previous legislation was highlighted in the case of Tesco. The supermarket giant had a website back in 2007 that charged a flat fee of just £199 for sellers to list their properties. However, once that site came under the estate agent umbrella, Tesco couldn’t justify the additional costs or time that was involved and the portal inevitably shut down.
“These intermediaries help buyers and sellers contact each other at a low cost, but do not engage in other estate agent activities, so it is unfair to expect them to go out and check all the property details of all the sellers on their websites,” said Jo Swinson, Consumer Affairs Minister.
“Reducing the regulations for these businesses will open up the market and increase choices for consumers looking to save costs when buying or selling a property.”
At first glance, it does seem that there are clear benefits for both buyer and seller but will the proposed changes really give a boost to the housing market once they are put into place?
Letting agent rip offs are under the spotlight once again after new findings from Shelter released this week. In a survey of 5,000 tenants, the organisation found that 23% claimed that they had been unfairly charged by an agent at some point for contract renewals, repeated credit checks and even for viewing a property.
The poll found that the most common complaint was in regard to ‘administration’ – a term which covers a wide range of charges and tends to average at around 14% of the tenant’s property charge. In some cases, this amounted to a non-refundable, one-off fee of up to £540.00.
Typically, a 10% charge would then be applied for an initial credit check and further 8% fees levied for contract renewals. Incredibly, charges for repeated credit checks of up to £150.00 were made while some tenants were even asked to pay £100.00 simply for viewing a property.
“It’s scandalous that some letting agents are creaming off huge profits from the boom in private renting by charging both tenants and landlords fees that are totally out of proportion to the service they provide,” said Kay Boycott, Director of Campaigns, Policy and Communications at Shelter.
Jane Ingram, who is president of the Association of Residential Lettings Agents (ARLA), acknowledged that standards needed to be raised and pointed to her organisation’s repeated requests to the coalition government.
“Standards in the lettings industry do need to be raised. That’s why we have long-called on the Government to act swiftly and introduce a robust licensing system designed to protect consumers,” she said.
The figures have led to an attack on the government by the Labour Party who accused the coalition of standing by and doing nothing while the crisis deepens.
“Unscrupulous lettings agents are ripping off tenants by charging them fees they didn’t know they would face, and exploiting landlords and tenants alike by failing to protect the money they hold for them,” said Jack Dromey MP, the Shadow Housing Minister.
Mr Dromey went on to underline the effect these charges in having at a time when many families are struggling to cope financially.
“As the growing housing crisis and double dip recession put the one million families in the private rented sector under pressure, this is the last thing they need,” he added.
Shelter also found that some agents were double charging their fees to both landlords and tenants while some renters asserted claims that they feel vulnerable in the current climate.
Calls for the government to act are increasing and the only certainty is that this situation will only be repeated until action is taken.
A survey from property website Rightmove has shown that asking prices for homes across the UK rose for the third month in a row as buyers sought to choose from a fairly restricted availability. Additionally, Rightmove claim that the average asking price for UK homes has risen by 2.4% in the past twelve months and currently stands at £246,235.
It’s questionable however as to what this statistic really means because, according to the Land Registry, the housing market at the moment is static at best. In simple terms, vendors can ask what they want for their homes but the market dictates that there is no guarantee they will achieve the figure they really desire.
Additionally, with a set of new builds about to enter the market, a dip is now predicted as supply starts the catch up with demand.
But the overall message for vendors is to not get excited about the new figures and to not become complacent about realising a fair asking price that suits both parties. Property experts advise that cutting prices and promoting any unique features in your home will both be vital factors for anyone looking to sell in today’s climate.
“While the national average price of property coming to market has set new records in each of the last three months, sellers should not break out the bunting in celebration until they have done their homework,” said Miles Shipside of Rightmove.
“It remains a very local market ruled by property style and location. Cutting your asking price to be cheaper than your competition and promoting your selling points better will be the key to avoid being an also-ran in the race to sell.”
In addition, Rightmove claim that there is a confused, two tier market at present: On the one hand there are sellers who price at a realistic figure while others have so little equity in their home that the numbers are increased in a desperate hope to sell.
“‘Agents report a two-tier market where those who can afford to price realistically are selling, while those who are equity-poor are struggling to sell as they often have to price up to make any prospect of a move viable,” Mr Shipside added.
Any summer of optimism is also expected to tail off as the London Olympics approach. Major events such as these have traditionally led to a slower market which causes sales to stagnate at best and it is felt that further estimates in 2012 will reflect this.
The housing market is unsettled at best and among the victims of the current property climate are Estate Agents. In March, the Times newspaper revealed that 80 agents had closed their doors in February of this year due to low sales volumes and the increased costs of running their business in the first place.
That would tend to indicate a gloomy outlook for Estate Agents as a whole as we enter the second quarter of the year but Richard Murray from Eurolink technology limited – a market leading consultant to agents in the UK believes that if businesses are pro-active, they can deal with the current situation and stave off the threat of closure.
“The screws are tightening and estate agents who can’t run a tight ship are sadly diminishing,” Richard Murray warned.
“We are often called in to estate agencies to find solutions to cutting costs and increasing productivity and we find that simple changes can make a huge difference.“
As they continue to provide assistance to help agents thrive in the current market, Eurolink have issued a list of top ten tips for an efficient and cost effective property business.
1. Automation: Streamline your processes, in particular, the repetitive manual ones which take up valuable time that is better spent on negotiating and closing deals.
2. Setup a solid IT infrastructure: Ensure your systems are functional, reliable and easy to navigate and that staff are well trained in using them.
3. Maintain a dependable IT support network: Use a reputable IT support provider to ensure consistently quick access to data and to prevent being caught out when systems go down.
4. Keep staff knowledge up to date: Provide regular training sessions and news updates for staff, advising them of new legislation changes, local events and your key point of difference from local competitors, and how these might affect business practice and your varied client base.
5. Customer Relationship Management: Ensure that your software application can deliver all of the relevant contact information for every individual client you deal with. Understanding who the person is and what they mean to your business will ensure that all potential opportunities can be explored.
6. Integration: Utilise one software system for both estate and lettings work. This allows for the cross sharing of customer data, reduced data storage and is cost effective (you only pay for one license, one technical support team etc.)
7. Familiarity: Implement a software system that is familiar to your staff, as a complicated and unfamiliar interface will make adoption difficult. A product like the Veco-onesystem™ which appears similar to Microsoft Outlook allows for easy navigation and will mean staff take less time to embrace the latest and most innovative technology.
8. Organisation of data: A complete software solution allows your business to free itself from the restraints of filing cabinets and storage units and is also environmentally friendly.
9. Streamline customer communications: Link your network phone system to your software solution to enhance customer communications by delivering a fast and knowledgeable service.
10. Security: Store data in a secure software storage facility. Information can still be easily accessed by authorised staff, and access can be monitored.
By following these tips, Eurolink are confident that any agency can thrive through the harshest of market conditions.
“Your offering needs to provide more for less – that is, less cost to you, the business and less cost to the customer,” Richard Murray added.
“Innovative technology can improve business decision-making and, ultimately, customer service, which is one of the benefits of IT advances of the last few decades.”
As the uncertainty over the housing market looks set to grind on for much of 2012, the lettings industry as a whole has attracted some unwanted media attention this week with news of a significant rise in the number of complaints against agencies.
In 2011, the number of enquiries received by the property ombudsman rose by 26% from 2010 to 7,641 and this has prompted calls for the whole industry to be reformed and regulated. At present, agents are not obliged to register with a redress system such as the Ombudsman, who feel that making such action compulsory will lead to a rise in standards and a reduction in complaints.
A parallel can be seen from 2007, when Estate Agents were obliged to register with the Property Ombudsman. As a result, it is widely accepted that standards have improved, although a 10% rise in complaints has also been reported for sales agents in 2011.
Ombudsman Christopher Hamer went on to express his dismay that 25% of the lettings related complaints in 2011 were against landlords and agents not registered with the redress scheme and he was therefore powerless to act.
“I am concerned that, for those consumers, they may have little alternative but to undertake potentially costly legal action to pursue their complaint, a daunting prospect in the current financial climate,” Mr Hamer declared.
He also went on to point out how rogue agents, who were unregistered with the scheme were a threat to landlords and tenants alike.
“Knowledgeable landlords already check if an agent has a separate account for client money and has signed up to a redress scheme, before allowing them to market their property,” Mr Hamer added.
“However, landlords who are new to lettings, will no doubt be attracted by lower fees and may not enquire what protection the agent can provide both them and their tenants should problems later occur,” he concluded.
Reports received throughout 2011 claimed a rise both in property rentals and the cost of renting and many agents confirmed that demand was far outstripping supply. That trend seems set to continue for 2012 and therefore the Ombudsman’s reports are a worrying development.
Ian Potter, of the Association of Residential Lettings Agents is one of many who is backing the Ombudsman’s call for a compulsory redress system.
“It was interesting to note that only 10% of those complaints merited adjudication by the Ombudsman, and it should also be noted that there were almost 900 new lettings members despite some consolidation in the industry,” Mr Potter said.
“That said, it comes as very little surprise given there is no national regulation in place to stop rogue agents setting up shop and taking advantage of what is a fragile market.”
Tis the season to be jolly, unless you are an estate agent or vendor maybe! Traditionally, the festive period always means a drop in house sales and viewings.
However, it doesn’t have to be a completely dry month. Many vendors are attempting to make the most of the yuletide period and making the sparkly season work in their favour. If you’re looking to sell your property, you can still attract viewings during the month of December. It’s all about playing on the season and with romantic notions of the perfect family home.
A house looks more inviting when it’s decorated. A warmly lit room with fairy lights and candles can really welcome a viewer and give them a sense of what it would be like to live in your home and how cosy it could be. Christmas trees surrounded with presents and a well decorated fireplace can also add to this effect. It’s all about gift-wrapping your home and presenting it in a really happy and welcoming way. All of these individual touches say that your home is very special and hopefully that feeling will rub off on viewers.
It’s important when using this approach that you get the look just right. Using cheap and tacky decorations could send your viewers running in the opposite direction and even laughing about that ‘awful house we saw the other day’ when chatting with friends. That’s exactly the opinion you’re not looking for.
Lucy Inskip from The House Doctor, a company that gives advice to vendors on how to dress and present their homes when selling, waned against overdoing the seasonal effect.
‘Avoid the cheap and cheerful approach,’ says Lucy. ‘Things like “Santa Stop Here” signs are great fun for the children, but they don’t exactly entice people to buy your home. ‘Only use white fairy lights and try to create a muted effect.”
This is sound advice as you don’t want to draw attention away from your home too much. Every room should be tastefully presented with a warm and welcoming hallway, living room and kitchen. It wouldn’t be going too far even to greet your viewers with a mince pie and glass of mulled wine. If you’re planning an open house this is a great idea and will really make people feel welcome as they wander around your home.
Whilst you might be sitting there thinking the idea is a bit far-fetched, these approaches do sell houses. You don’t need to erase December from your year just because it tends to be a little quiet. Get that For Sale sign up and make your home look warm and welcoming inside and out. You’ll be surprised how much attention you get!
Halloween is the time for tales of ghosts, ghouls and things that go bump in the night. Everybody loves a terrifying yarn about a haunted house and ghastly goings-on, but have you heard the one about the ghost streets of London? There’s a problem in London being created entirely by its own success as a global capital city and it’s got nothing to do with paranormal activity.
Many northern and central prime properties are standing empty right now and continue to do so for months on end creating what could be seen as billion pound ghost streets that are lined with second and even third homes of the world’s super-wealthy country-hopping elite from Dubai, Hong Kong, Russia, Bahrain, Russia, and Singapore.
Many estate agents say that up to 70% of property sales in central London have been because of foreigners buying second homes. That’s an astonishing figure and is a result of the favourable exchange rate and London’s popularity with the super-rich.
But in spite of these properties rarely playing house to their registered residents, the streets on which they are situated still tend to look busy, but how?
The simple answer is that the rich owners of these London properties turn to others to keep their homes running either by employing staff or hiring professional house sitters.
An extreme example of this is a large house in North London that is owned by the ruling family in Bahrain. The house features 10 bedrooms and is located in a very salubrious district. The family use it as their London address “should things get sticky back home” apparently. Every morning the team of staff looking after this house clean and air the house, turn over the limo engine and retire back to the kitchen or elsewhere in the home to take care of things.
These second homes are a distinct contrast to the other side of the property market where first-time buyers and homeowners are struggling to manage one home let alone two. Prime property like this is an investment however so it’s easy to see why the owners want to keep and nurture their homes even if they don’t live there.
Put simply, Below Market Value or BMV properties as those that are available to purchase below their market value. Normally this is because the previous owners experienced financial difficulty or needed to dispose of their property quickly without the protracted sales process. The reason for this is usually the threat of repossession.
The official guidance from the Royal Institute for Chartered Surveyors (RICS) about how a surveyor should value residential property is contained in Appendix 5.1 of the Royal Institute for Chartered Surveyors Appraisal and Valuation Standards (Red Book). The foundation for the valuation of a residential investment property is normally its market value. Market value is defined in the Chartered Surveyors hand book as:
‘The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.’
If a property was marketed properly and then a sale agreed, a landlord might consider that they got a BMV bargain. But this isn’t always the case. For instance, let’s say an investor buys a property for £180,000 and a year previous to that a similar property sold for £200,000. The landlord may consider that they have bought the property at 10% BMV. If we look at the guidance set out by RICS the investor has just actually paid the market price.
So, do BMV properties really exist? They do and it all depends on whether the property was fully marketed before sale or not. These situations occur when buyers are given access to ‘motivated or distressed sellers’ who don’t want to go through the normal process of sales and marketing or cannot afford to.
Locating motivated sellers is usually quite simple if you are in a good position to buy. Targeting your local area with adverts or leaflets is one way. You could also contact your local estate agents highlighting your interest in property bargains and that you are a potential cash buyer of residential investment properties. Even if you need to arrange a mortgage for a bargain property it’s still possible to flush out some good deals. Persistence pays in the current market. Make your name and number known and make it clear that you are serious about making a purchase.
As with any industry, the BMV industry is rife with rogues and dishonest middlemen. Those posing as BMV gurus are often anything but and just after preying on those desperate to sell and in a distressful financial position. Their main concern is with making a massive profit between desperate seller and landlord. It is much better and easier to search for BMV properties through local estate agents or by offering your own direct service to local customers.
Of course, there are dangers with buying BMV property and this is mostly down to the provisions of the 1986 Insolvency Act. These provisions could result in a landlord who has bought BMV property legitimately being sued by the previous seller. If several years down the line the seller has become bankrupt they can take out a court order to reverse the sale or claim the difference back between market value and the agreed sale price. The reason for this is because the Insolvency Act allows the trustees of a bankrupt to prevent the bankrupt from giving away or selling assets below the normal market price. A landlord who purchases BMV properties can be exposed to these provisions for up to 5 years. However, there is a way to protect against this instance by asking the seller to execute a Deed of Solvency. This declaration states that the seller was solvent at the time of sale.
In my last article on internet marketing for estate agents I introduced PPC or Pay Per Click advertising using Google Adwords to put your business at the top of search results.
Today I’m going to be explaining how you can use Google Places to do the same thing – but for free!
The fundamental aim of SEO (Search Engine Optimisation) is building your website’s credibility in a way that Google sees fit to place it at the top of its search results for a given phrase. For example if you are an Estate Agent in Knightsbridge and you think you’re customers are looking for estate agents on the web by typing in ‘estate agents in knightsbridge’ then you want to be top of the search results for that term – don’t you?
Luckily for small businesses Google has changed the way search results appear in recent years and we now see videos, news and other types of media streams within search results. One introduction is Google Places – essentially the information about busiesses or places stored on Google Maps now finds its way into search results – and generally ABOVE natural search results for ‘localised’ searches (like ‘estate agents in Knightsbridge‘).
So a Google Places entry can put you at or near the top of search results and help clients find your website in this way. But Google Places results will display a number of estate agents in your area, and you want to be top!
Here we go again – more optimisation to get to the top of search results. Read on to find out how (it’s easy).
Firstly - do you have a Google Local listing? If not create one here. If you do, have you claimed it? This means you identify yourself as a representative of the business so you can edit the listing.
Second, add information to your Google Places business listing. This will not only help Google decide to place your business higher in the search results but it will increase the number of visits from customers who instinctively click the business listings with more information. The more photos and videos (yes videos) the better.
Third, reviews. Yes its a dirty word in many quarters and many business owners shudder at the thought of disgruntled customers (yes at some point every business will have one) ranting about a poor experience online. But you have lots of contented customers too – right? Why not ask them politely if they’d submit a positive review of the experience and let other potential customers read about how great your service is?
I hope you enjoyed this basic introduction to Google Places, of course there is more to it than this but for now – go and claim your listing and add information!
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If you are just starting out in your career or thinking of a career change, becoming an estate agent could be for you. It’s unfortunate that some individuals have given the profession a bad name, and indeed the large majority of estate agents today are honest, hardworking, and ambitious to learn more about their industry and how they can help their customers more.
Before we talk about a typical life in the day of an estate agent, it’s important to know there is never a typical day, and this can make the role exciting, challenging, and perfect for somebody stuck in a rut and bored with their current job. If you are serious about a job as an estate agent, property negotiator or lettings agent then why not pop across to our Property Jobs board to find some inspiration and browse hundreds of jobs across the UK. You could find a local role that’ll take you out of the daily humdrum and push you into the exciting world of property negotiation!
Okay, let’s take a look at the role in a little more detail…
Getting the Day Started
Your working day will probably start off in the office where your start time will usually between 8.30am and 9.00am. A morning meeting is usually held first thing to kick the day off, discuss new properties, give updates on existing listings and transactions, and talk about any other business that anybody wants to discuss. Once the meeting has finished, your day as an estate agent will commence!
Playing Catch Up
A lot can happen in a day and you’ll be spending a large amount of your time on the phone catching up with a variety of people. In addition to dealing with paperwork, existing accounts and advertising new listings, you’ll also be taking calls from anxious clients and dealing with potential new buyers and sellers walking in off the street. The morning is a great time to make phone calls as it’s usually a little quieter. A large proportion of your time will be spent calling solicitors to check the stages of each of your outstanding purchases and sales, and if you are also handling lettings, dealing with tenants and landlords to get lettings paperwork, tenant agreements etc. finalised and agreed.
Perfecting the Sales Pitch
Another large part of your role will be to inform any buyers on your books about new properties that you think might be of interest to them. This involves giving out property details and liaising with the vendor and the buyer to set up appointments for viewing. A major criticism of estate agents in the past is a breakdown in communication levels and it’s vital that you interact with your existing clients regularly. A large aspect of your role as an estate agent will involve a lot of ‘selling’ – you need to make a property sound attractive to a buyer and in some cases you also need to ‘sell’ a buyer to a vendor. For example, first-time buyers are always highly sought after as the property chain will be invariably shorter.
Build a Rapport
Paperwork and phone calls aside, it’s the property viewing where an estate agent really comes into their own. This is the point where you can really push the good points of a property to make that all important sale or encourage a letting. Accompanying applicants on property viewings will take up the rest of your day and it’s important to build a rapport with your client straight away. Find out what they are after, what they don’t want, and what is likely to tick all the right boxes for them. You’ll be expected to have your own car in most cases and a clean driving license. Carrying passengers is also a requirement from time to time.
If the applicant falls in love with a property then they will usually make an offer. This is the time to close the deal and it can take a lot of hard work and negotiation on behalf of both parties to do this. Once an offer has been accepted, it’ll be your responsibility to handle the transaction and see it through to exchange of contracts. This will involve lots of liaising with financial advisors, solicitors, surveyors and of course the clients themselves and anything can happen at this stage! Pre-empting or preventing problems is one of the many skills you will learn as an estate agent.
Is It For You?
In summary, the role of an estate agent is an exciting one! The atmosphere in the office is usually charged with adrenalin and moods can sometimes fray, but when you make a sale it can put you on top of the world. The job can be challenging and frustrating, but helping a client move into their dream home, is ultimately very rewarding!
Remember, you can view lots of new estate agents jobs on our Property Jobs board to find out more about the role and whether it’s for you. We’ll also be featuring lots more articles and guides on a career in property so watch this space!