Overseas Property Agent stupid? Or the economy?

March 4, 2012

I have conversations with new clients who want to sell their properties and they sometimes bemoan their incumbent agent. But when I delve further and ask about what their agents have done, the picture becomes clearer.

European Property SoldQuite often the incumbent agent has got the property on their database and possibly syndicated it (if they collaborate with other agents), maybe got it on relevant portals and they may even have generated some viewings, but perhaps the agent has not been sending e-mails to the client or telephoned them regularly, which has disgruntled them and evidently the property has not sold.

Now I grant you, not all property agents are great at nurturing relationships with clients, building databases and proactively marketing property for sale. However there are challenges in the market that cannot be blamed on an agent and it helps to be realistic about what is not in an agent’s control, for example

  • Global recession
  • A downturn in property market prices
  • Lack of mortgage finance, either because banks are tightening lending criteria or because governments are imposing stricter capital adequacy requirements e.g. Spain
  • Squeezed disposable income, affected by inflation, oil prices and taxation increases
  • Unrealistic buyer expectations, fuelled by stories of 50%-70% discounts, believing their ideal property is now achievable, with the maximum possible market discount.

What’s more there are lots of sellers caught with mortgage debt they want to cover, which is driving many to “cost plus” price their property, so they can cover meet their debts, rather than “market-price” their property, based on what a buyer is likely to pay.

So how can a seller tell if it is the economy, in other the words the state of the market, as opposed to their agent’s lack of proactivity? Or something else?

  • Have you priced the property realistically?
  • Are you paying a fair commission level to the agent? Resales are generally not as profitable for agents as new sales, so whilst you might think you have negotiated a great deal on commission, if it is out of kilter with other sellers, or demotivating the agent, that isn’t going to help you sell your property. In a re-sale situation, commissions can be between 3% and 5%. In some countries, it is normal practice to charge a buyer and seller commission, e.g. countries like Poland, Turkey, Bulgaria, in Spain it is the buyer who pays commission
  • How long have they been an agent? Some enter the market when it is on the up and so may not have as much experience or knowledge as a more established agent, or a database of clients they have nurtured a relationship with.
  • Have they got any professional qualifications or are they a member of a professional body? Whilst this is not the “be-all-and-end-all”, it indicates if a company is open to continual learning and improvement and seeks to have a degree of knowledge in their market. In many markets the sale of property is not regulated, so it is helpful to find an agent that is prepared to submit themselves to an independent appeals process, through an independent or professional body such as the AIPP or National Association of Estate Agents (NAEA).

Don’t assume selling abroad is the same as selling in the UK, unless you are familiar with the process, you are likely to need some help or guidance.

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