Now that the property market is picking up, across the UK and for some overseas markets, what tends to happen is an influx of new property agents to the market, sensing money to be made. It is an industry with low barriers to entry and one where it is assumed ‘anyone can do it’.
I thought it was timely to do a ‘full frontal’ on estate agencies and property agencies to ‘strip bare’ the disparity between perceptions and the reality of their role.
What’s more, with the latest Pension reforms in the UK, enabling individuals to make more choices about how they invest their money, this will help stimulate the property market both in the UK and overseas. Property as an investment class has the potential to give total returns significantly higher than many investments or savings. Take a 6% rental yield or return and add to this capital growth of 6%, you end up with total gross annual returns of 12%. Yes there are costs involved, not least financing costs through a mortgage, which have to be deducted from this gross amount. But let’s not forget, property returns are based on the total value of the property, which is much more than the money invested as a deposit.
Overseas Property Agencies – what are they like?
After asking property owners and buyers what they think of Estate Agencies or property agencies, these are some common negative perceptions (qualitative research but nevertheless these should chime with many):
‘White sock salesman’, who doesn’t really know what he is talking about, has little expertise, is ‘wet behind the ears’, out of school.
‘Greedy and unethical’ – they are just after the money, not the welfare of the client or their needs. They don’t care who buys and can play some buyers off against each other to get the best price for a property.
‘Overprice the valuation’ – so a selling client is persuaded to go with them because they think they are going to get the best price, only to then find they have to regularly retreat on price because the property isn’t moving
‘Underprice their fee’ to win the sale instruction, only to put no effort behind the sale because it is less profitable than other instructions, or charge for lots of extras.
Reactive versus proactive -have to constantly chase them to see what is happening on a property sale. They are dismissive when the market is getting ‘hot’ but become your ‘new best friend’ when the market slows and they are desperate for business.
But it doesn’t have to be this way. Whilst it is difficult to tell the good guys from the bad, particularly in overseas property, those who are members of a professional body will have undergone some kind of vetting and have a certain amount of professional knowledge and expertise, to have been accepted as a member.
Professional Overseas Property Agencies?
Now there is no guarantee that a member of a professional body will be more genuine in their client dealings than a non-member, but there is more at stake for a member. They are more likely to be conscious of their reputation, working in a more tight-knit community and there are commitments to operate with integrity, avoid conflicts of interest and not mislead. If that professional body is located in the same country as you are based, say the UK, that adds more reassurance in terms of recourse, should things not go according to plan.
Now a client might be thinking, why bother using an agent at all, when there are now plenty of internet services around? Well, for an overseas property purchase a lot more guidance might be needed, so it is clear how the buying process in Spain or Poland or Turkey differs from a property transaction in the UK.
Buying Property in Spain, Poland, Turkey?
In the UK an Estate Agent may perform a straightforward hand-holding role, or more, but when you’re buying property abroad a property agency may fulfil a number of additional roles from: country guide, to point-person for crucial service providers like independent lawyers or official translators, or highlighting optimum ways of dealing with a different currency, to general advisor on the buying process, as well as guidance on the ground in-country.
It can be time-consuming finding reliable service partners, so a good property agent can fast-track that process and save a lot of wasted time, energy and frustration. What’s more, no matter how cost-effective an internet solution might be, there is no substitute for good salesmanship. It’s really a question of making sure your agent is ‘up front’ about what they will do, is motivated and capable.
As with all things in life, it has to be a win:win situation. At the end of the day a client should pay a fair fee, for a fair service. That’s what I have always been taught is a ‘win: win’
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Property Venture® is an award-winning, UK-based agency for overseas property who helps people buy investment property and holiday homes in Europe, more easily and safely than they can on their own, because we offer grounded common-sense advice.
The focus is mainly greater Europe: Poland property, UK investments, Spain property, Turkey property, Cyprus property
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Tags: AIPP, European property, First Time Overseas Buyer, overseas property agent, Property Abroad