How To Select An Estate Agent
Below we’ve produced a guide on the most pressing points you’ll need to keep in mind when selecting an estate agent. Selecting the wrong one could cause delays, loss of money and not to mention stress, so it’s worth taking the time to make sure you’re getting it right.
To get you started - shortlist 3x agents
As a general rule it’s a good idea to meet with 3x different agents so you get a range of different options and valuations presented to you - then you can weigh them up against each other.
It’s much harder to evaluate a single estate agent when you haven’t got anything to compare them to.
What to look for when shortlisting
For larger estate agents you can take a look at their listings on Rightmove to see if a lot of the properties they’re currently listing have been reduced. If there are lots of reductions it could mean they are overvaluing seller’s houses in order to secure their business. But, equally, they might be overvaluing on purpose in order to ‘test the market’ and see if they can achieve a higher than expected price. Clearly you have to take these reductions with a large pinch of salt, but if the agent comes in with a high valuation for your property, and they have a lot of price reductions it could be a red flag unless this is a very deliberate strategy that you’re happy with.
Reviews of the estate agent
These can be useful to take a look at, but one major thing to keep in mind - buyers (and tenants) commonly leave reviews also, leading a distorted picture of the service. Remember the estate agent acts on behalf of you, the seller, not the buyer. Whilst the agent should certainly strive to be professional with buyers, ultimately they should be trying to achieve the best price for the seller. This is exactly the opposite of what the buyer is trying to achieve so you can imagine why, in some scenarios, the buyer may feel unhappy enough to leave a negative review, even though the seller (the actual client who pays the fees) is very happy.
Their flexibility in carrying out viewings
Buyers, like anyone, will have set times that they’re available outside of other commitments - work, kids etc. The greater the flexibility of the agent (and your own) in being able to carry out viewings at different times the better. In particular some agents won’t carry out viewings on weekends, which can significantly hamper the number of viewings (and therefore potential buyers).
Occasionally an agent will have someone interested in a viewing but are unable to carry it out themselves -they might ask if you can do it. If you’re happy to undertake viewings then of course you can fill in these gaps, but remember if you’re paying for a full estate agent service (rather than online estate agent) you should be concerned if this keeps happening since, ultimately, you’re not getting the service that you will eventually pay for.
Large vs small
Seeing how many listings an agent has on the property portals within your area gives you an idea of the relative size within your local market.
You might want to shortlist both large and small estate agents to get a feel for their different benefits which are, broadly speaking:
Often a smaller estate agent will sell themselves on the ‘personal service’ they can offer. Whilst it’s certainly not guaranteed that you’ll get better service, engaging an agent who owns their own business means, in essence, more of your fee goes directly into their pockets. Compare this to an employee at a larger estate agent who works on a set commission, the incentives for good performance are not as high.
Database of local buyers
The bigger an agent is within the local area the more likely they are to have a range of buyers registered with them. Buyers typically register with an agent because they’re interested in viewing a specific property, but very often they don’t buy the first one they see so remain ‘on the books’. If your property is similar to what a buyer is looking for the estate agent will get in touch with them to drum up a viewing.
Of course this database of buyers is somewhat of an intangible - no-one can verify how big their database is, if the buyers they have registered are still looking etc. But, nonetheless, it can be very valuable if the agent has a big presence in the area.
How to assess the estate agent when meeting them
Their local market knowledge
When valuing your property the agent will typically produce a list of ‘comparables’ - basically properties in your area (ideally your road) which have sold which you can compare your own against.
However, unless there is a like-for-like house that has sold recently this is simply a general guideline and the agent will have to use their knowledge of the area, the selling points of your property and demand in the market as a whole to make an educated guess on the price your home could potentially command. Without a strong knowledge of the local market it’s impossible to do this accurately.
So how do you assess whether the agent has good local knowledge? They should be able to convey this to you without you having to ask specific questions - they are, after all, meant to be salespeople. But, if they’ve only highlighted comparable properties within your road try asking how your property stacks up within the wider area to probe their knowledge.
Ask questions to get a feel for their service
Here are some ideas to get the ball rolling:
- How will you be marketing my property to attract buyers?
- Will you be accompanying all of the viewings?
- If someone makes an offer how will you be making sure that they can actually afford my home and complete within the timescales I need?
- Are you a member of any redress schemes?
Getting the valuation right first time
For an estate agent valuing your home is a tricky proposition. Many potential sellers are not realistic about the value of their home and cling to the idea of a specific price they’re often unlikely to achieve. Unfortunately, to win their business, agents often agree to market at this price in order to hook the seller in, and may well reduce the price further down the line.
One of the biggest issues with listing too high initially is centered around property alerts. Once a seller is signed up the estate agent will be contacting their database of buyers to attract interest. They also list the property on portals (Rightmove / Zoopla) where anyone who has an alert setup in your area will get an email notification.
Often you’ll only get one shot at attracting a buyer’s attention (they may ignore your property if they see it for a second time) and if it’s priced too high you could miss out.
Weighing up the valuations
One of the biggest reasons to meet with 3x estate agents is to weigh up the respective prices they think could be achieved for your home. If one is much higher or lower than the others you should proceed with caution (though it doesn’t necessarily mean they’re wrong).
We have a full article on valuations here, with all the information (and more) you could possibly need - worth reading to power yourself with the knowledge and help determine if what you are given by the agents is accurate. At the very least it should help you gauge if the agent is making an informed decision or operating on pure guesswork, the more you know the more you can ask.
As we mentioned earlier in the article, probably the #1 thing to remember is that agents can provide inflated valuations in an attempt to gain your business. So be candid with the agent, let them know they should give you a realistic valuation and, initially, don’t tell them what you think the property is worth - let them come to figure themselves without your influence for a truly independent assessment. You can then discuss this figure afterwards.
Down to the nitty-gritty
Fees the estate agent charges
Going with the cheapest isn’t always the best idea, since there can often be hidden costs. Saving £1,000 on estate agent fees sounds good, but if you sell for £5,000 less than you could have it’s a ‘false economy.’ Weigh up your confidence in the estate agent’s ability to maximise the value of your home vs options with a lower fee.
Traditional estate agents (who charge a fee only once your house is sold) will typically tie you in for a period of weeks, potentially a couple of months. This is totally understandable, as they need time to sell your property but, if you’re unhappy with the performance of the agent, tie-ins can be a problem.
Contracts can be ‘sole-agency’ whereby your property is only represented by one agent, or multi-agency, where you can potentially hire two or more. Typically a sole-agency contract will have lower fees, as the agent is more likely to sell without competing, so they’ll lower the rate.
In an ideal scenario you don’t want a long contract, as you can be more flexible when you’re not tied in, but acknowledge you’re likely to have some form of tie-in unless you pay upfront (see below).
Paying upfront will typically remove any tie-ins, which is good, but then the estate agent has no strong incentive to perform, since they already have your money. So the level of service achieved can be very different. Online estate agents commonly charge upfront fees so we’ll delve a bit deeper into this below.
Some advice on traditional high street estate agents vs online
The appeal of online estate agents basically comes down to the reduced costs involved. On the face of it you could potentially save £000s, but the key word here is potentially. There’s a range of factors to consider:
You need to check this for yourself (since it can vary), but often the local representative of an online estate agent covers a wider area than a traditional estate agent, which can lead to a weaker local knowledge (not always, but sometimes).
If you’re confident in creating a pricing strategy for your property (i.e you have a good grasp on how property prices are determined + can make a realistic determination based on timescales needed) then a lack of knowledge from an online agent isn’t necessarily a problem. Essentially at this point you are then paying for access to the property portals (Rightmove, Zoopla etc) and the administrative function - accepting offers, validating them and chasing conveyancing through to completion.
What can make the selling process more complex (and where it can be useful to have a good, local estate agent) is when time becomes a factor - typically when you have to sell quickly to secure your next property. If time isn’t an issue you can afford to overprice your property a little and gradually bring the asking price down if you don’t see any interest. But, on a tight timeframe you’re essentially walking a tightrope - you don’t want to put buyers off by overpricing but equally you don’t want to lose out by asking too little.
This is where the more personal attention an estate agent can give you the better - crafting a strategy and adapting it to your unique circumstances as they’ve usually seen these scenarios time after time = you’re paying for experience.
Carrying out viewings
This is typically the biggest missing piece from the online estate agent’s service, and why they can afford to offer lower fees than traditional agents.
If you’re a people-person (be objective about this) and feel you could do a job job then it might be worth considering the lower fees an online agent offers. Going into someone’s home is always a bit strange for a buyer, and if you don’t put them completely at ease they won’t get a positive feeling, no matter how good the property actually is people often buy with their heart rather than their head.
With the above in mind it’s time to weigh up whether you feel the added-value from a traditional estate agent is likely to be worth paying. If a traditional estate agent comes across well, and you get a good feeling that they’re trustworthy and can offer a good, personal service then it may be worth paying the premium.
One final thing to remember, online estate agents often charge upfront fees (though this is changing) so you have to be fully-confident the service will be excellent even when they’ve been paid and have less incentive to perform.