First Time Sellers Guide
25 May 2019
The guide for first time sellers....and for anyone who hasn’t done it for a while!
Much advice is bestowed on first time buyers about to embark on their most expensive acquisition but what of first time sellers - those who bravely took the plunge, invested their hard earned savings into bricks and mortar for the first time and now wish to take the next step on the ladder? Arguably, the decisions facing these individuals and families are more daunting than before as two transactions will, typically, need to be coordinated. And, almost inevitably, discussions for the first time with an agent will need to be arranged over disposing of their most valuable, prized asset.
What, then, should determine the first time seller’s choice of agent? A number of factors come into the equation but most will be motivated by how best to maximise their investment. Other scenarios will also influence the outcome. A relationship may have been forged during the buying process – good or bad! There may be the dream home, currently on the market, where the interested buyer and prospective seller will be cajoled into engaging the agent involved to improve their chance of success. Location is also key; a local agent with a proven track record is a persuasive influence. In recent times, the option of an online agent has become a legitimate one where low, fixed fees are a distinct appeal.
To help simplify matters, the decision process could be divided into the following:
Step 1: Determine the property value
It is commonplace that a seller will invite two or three agents to offer a ‘sales valuation’ or ‘market appraisal’ - generally offered by the agent free of charge and without obligation. Beware the agent who seduces the seller with the highest valuation and lowest fee. If unsure, it’s entirely appropriate to challenge a valuation and insist that the agent provide comparable evidence to support their proposed figure. Establish what success the preferred agent has with selling similar properties.
Step 2: Agree a fee
Agree a fee. Most traditional, high street agents will operate on a percentage commission basis but may also offer a fixed fee - always on a no sale, no fee basis. The online agent will quote a low, fixed fee which is payable at the outset, regardless of whether the property is sold. This remains the fundamental difference between the traditional agent and online competitor. Establish whether the agreed contract is restrictive or, in other words, whether it prevents the seller from instructing another agent within a specific timeframe. If the property remains unsold, and another agent instructed with the original agent retained, check what impact this has on the fee level. Agents will refer to ‘sole agency’ and ‘multi agency’ fees in respect of the above.
Step 3: Securing the best outcome for the client
Establish what service is on offer which is, perhaps, the most significant determining factor. Many sales collapse after a sale has been agreed due to a lack of agent’s diligence in identifying the strongest buyer and complacency in monitoring the transaction thereafter. The traditional agent is incentivised to deliver as they will not earn a fee until a sale completes. A skillful negotiator can justify their fee by ensuring that the best price is achieved for their client and is motivated to steer the transaction through to contract. The online competitor is paid for merely listing the property on the various property portals.
At the end of the day, it’s essential that a property seller has faith and trust that their chosen agent will look after their best interests and deliver a successful sale. At Hollands Smith, the directors – Simon Hollands and Rob Smith – are directly involved at every stage in the process. For what it’s worth, the only commitment which this popular agency ask of their clients is to pay their agreed fee on the day of the move – a concept which many satisfied homeowners have bought since 1992.