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Wednesday, 6 January 2016

Estate Agents

I am not going to rant about estate agents and I believe that they can provide a valuable service.  I understand that this is not a universally held opinion though so let me explain.

I like the village I live in but my house is too small.  Everybody else in the village thinks it’s a great place and would very much like to stay.  Therefore, villagers who want to move, have a very limited market to deal in.

Typically, on Rightmove, there’s no more than one page of homes advertised but this masks the fact that a substantial number of village residents would consider a move.  I know this because of the village grapevine embodied by social groups, pub frequenters and a village newsletter.

Many homes, therefore, change hands privately.  Having made little progress from the traditional market, I’ve tried to do the same thing.

This has been an odd experience although admittedly one that has brought me closer to actually moving that taking the traditional route (fingers crossed it actually happens this year!)

It’s been odd because I’ve had to deal, face to face, with other folk in giving an opinion on their homes, hearing their opinion on mine and negotiating.  This is frequently very awkward.  Much as I like to think I can strike a deal, I’ll admit that I find negotiating uncomfortable and especially so over something as personal as my own, and someone else’s, home. 

If negotiating with one person is bad enough, negotiating with several buyers or sellers is worse.  In my view we’re just not suited to it in the UK.

This is where having an intermediary has value and something Estate Agents are ideally placed to provide.

In my earlier post ‘Armchair Analysis’ I suggested that the property market suffers from poor information flow between buyers and sellers.  When I’ve discussed this with friends and asked them to imagine a world of unrestricted contact throughout a potential chain their first reaction is “Great! Then you’d be able to cut out the Estate Agents and save a fortune!”.

My view, tempered by experience, is now more measured.  Yes, you could cut them out and save on some transaction costs.  Be warned though.  You’re unlikely to be a skilled negotiator.  You’re going to have to have some very awkward conversations with strangers and, if you’re lucky, you’re going to be trading-off one person against another to get a decent deal.  This can be uncomfortable, very distracting, and I just don’t believe many of us are very good at it.

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