Property Gold: Playing the agency game

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With more than 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. 

This month, Alex discusses the pros and cons of instructing more than one estate agent. 

 

Two heads are better than one, but in estate agency terms this isn’t necessarily the case when it comes to instructing agents.

Some vendors feel that by instructing two (indeed sometimes more), they think that they will have greater exposure in the market and more likely to sell for a premium. However, unless this is done under the right circumstances, in the right way and with great care, having two or more agents working for you can be counterproductive. Not only could you run the risk of appearing desperate to sell, but agents behind the scenes could be arguing about who found the buyer and not necessarily working in your best interests.

So under what circumstances should one instruct another agent(s) and how do you play the game?

Sole agency is as it sounds. One agent working on your behalf and for straightforward sales, usually the best route.

The polar opposite is multiple agency, where two or more agents are instructed, but only the winner gets the fee. This route is not worthwhile and actually dilutes your sale efforts, as agents will see the risks versus reward as too high and won’t bother selling your home!

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The middle option can be used if your sale is losing that original sparkle. To beef up your marketing, create a ‘marketing spike’ or just to get the original sole agent re-energised, instructing a joint agent could be worthwhile… but proceed with care.

Critically the new agent must be very different from the original agent, so that they fill in any gaps that may have been missed. The downside with two agents is that there is a higher commission rate, yet this needs to be balanced with what you could gain on sale proceeds.

Now here’s the tricky bit – how does one split the commission between joint agents? Yes 50/50 can work and both agents then collaborate and work together for you, the client. However in some circumstances it is worth weighting this towards the winning agent.

An extreme example of this I did recently, where a vendor asked me to get their original agent back on track, but they didn’t wish to disinstruct them given the work they had put in thus far. I brought in a joint agent, but specifically chose them as I knew both agents had a major personality clash and there was fierce rivalry.

I then weighted the fee 80/20 to significantly up the ante. The new agent aggressively went about their new instruction to prove a point and the original agent had a serious wake-up call. Needless to say we got a great result and the new agent won.

Instructing a joint agent can be useful to rejuvenate your sale, however it must be used with caution and done in the right way, otherwise you could be up in a worse position than when you started!

If you have any comments or questions for Alex, please feel free to contact him on alex@alexgoldstein.co.uk

 

Property Gold: The hidden time options when selling your home

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With over 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. 

This week Alex looks at how you can control the sale of your property if you haven’t yet found your new home. 

 

Time. It is one of the most important factors when trying to buy or sell your home. More often than not, matters do not move at the pace you want. Don’t even get me started on local authority searches and mortgage lenders!

One of the most regular obstacles I come across is when vendors are unsure about selling their home, as they haven’t found a property they wish to move to. Their default thinking tends to be that they will be kicked out on to the streets by their buyer, before they are ready. This is not the case.

Putting transactions together on the right basis is key and there are some lesser known options that sellers (and indeed buyers) need to have up their sleeves when negotiating. Just how do you build in extra time into a transaction and still be in control of it, whilst keeping both sides happy?

Yes going into rented is the ‘go to’ option, however try looking at AirBnB. Many landlords have lost income during the restrictions and therefore if you wish to secure their property for a period of time, have the freedom to pick your own dates and at more favourable market rates, this could be an answer.

The other known strategy is to exchange and then delay completion by a several months, however, suggest completion ‘if not earlier by prior mutual agreement’. This means that both buyer and seller can make completion earlier, should they require, however neither side can go beyond the backstop date.

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The lesser known angles and which are also win-win scenarios for both sides are:

Licence back agreements. This is where the property exchanges and completes, however the ‘former owner’ then rents the property back from the incoming buyer at more favourable rates. This means the vendor can stay in-situ in their home, has more time to find their next home and most importantly are in a top buying position. In contrast, the new owner has secured the property and has a reliable tenant already there.

An alternative angle is that once a seller has found a buyer, is to issue the memorandum of sale to all parties. However you then ask the solicitors to stop working on their respective files. This gives the buyer reassurance that you are taking their offer seriously and means that the vendor is instantly put into a proceedable position, as they can prove their property is now Under Offer.

Yes these options can prove to be useful to break impasses, however they can only be deployed when you know what the buyer and seller are trying to achieve. Indeed I have done transactions where I have used a number of these options all together. The key is to find that key middle ground and think laterally.