The first thing I have ever done when I have had an offer accepted on a house is to ask for a gurrantee that the house is taken off the market. I will check advertising and for sale signs. If I am going to put down a (refundable granted) deposit as a sign of good faith to a vendor, the least they can do is pull it from the market.
If you came across me as a buyer, you would have just lost a sale.
Me too. When we were buying a house in Woking, England the EA didn’t take down the sign and left the property as for sale on the internet. I pulled out of the sale as he refused to budge. He rang me the next day and complied. Of course I pulled out in the end anyway.
I very much doubt that agents lingering with the sold slips is the explanation. What we are seeing is a collapse in demand across much of the market. The chart below shows what happened in Palm Beach Florida last year.
And since then (2006) prices have continued to fall
There are more properties on the market.
It is taking longer to sell properties.
Properties are selling for less than they were in the second quarter of 2006
Properties that are sale agreed this year are more likely to fall through than those we agreed last year.
Since July I have sold more properties than i did in the same period of 2006 but no where near as many properties as in the 1st half of 2006.
Once sale agreed I do not show a property to anyone else but i do not take it of the internet or change the sign until contracts are signed and if the buyer doesn’t like that i will let them walk. I do not work for them i work for the vendor and it is in their best interest.
If you are not planing on messing the vendor around what is the problem with EA taking names and numbers of interested parties and storing them so they can show them the property should you not sign contracts within a reasonable time frame.
Over the past six months this has become common practice in several top EA and I have heard of no buyer pulling out because the property was left on the internet.
As a quick respionse to the latter point. Maybe too many agents just out of short trousers who have no experience of anything but a bubble and hence have no sensible benchmark for ethical professional behaviour.
On the former point. I can think of more than one reason:
As you state, you are an agent acting for vendor.
You are talking of misrepresentation. Is the house “for sale” or is it “under offer”. These are well accepted conditions in the industry.
Because I am about to put down a deposit, incur cost of legal work plus surveys etc. I want it off the market. If you think you can ignore the wishes of a buyer for no cost, see my answer in the paragraph above.
As Geckko said the buyer will hire a surveyor to supply him with a report. You also get your solicitor to check the deeds and give a report on the area. The report I got from the solicitor for Woking detailed all the commercial units, power stations, dumps etc in the area. Then it went on about the pending construction in the area, the historical flood areas etc. Then the rights and boundaries of the house owner. I also got a sewage survey as there were some concerns raised by the solicitor. Then an asbestos survey. In total I spent a little over £1,500.00 for all this. There was no bloody way I would give the go ahead to have this work done if I though someone could come along and outbid me. (I know someone could, even if it was sale agreed but 99% don’t look at properties that are sale agreed.)
I have to say I’m starting to doubt your credentials given your flippant attitude to this practice. You would need to have a really suppressed buyer to put up with that carry on.
If you were going out with a girl (assuming your a man and not gay) and when she was out with you she happilly took numbers from other blokes she met, how long would you continue to see her?
That could be part of the explanation but how does that tie in with the idea that some estate agents won’t accept too many properties in one area as they don’t want a glut of “For Sale” signs. Or is that not really happening?
I have to say that I was under the impression that EAs wanted to give the impression that things were moving (Permanent “Sold” Sign). So more “Sale Agreed” signs would be desired. Maybe though it’s better (from a EA pov) to have no “Sale Agreed” sign than having to replace one with a “For Sale” sign.
On the other point being discussed if I was a buyer I too would demand the sign taken down … and let’s face it buyers are in the driving seat these days. It won’t be too long before the majority of buyers realise this and become a bit more demanding. About time!
Brianmac, we rarely agree but I can confirm that this does go on.
A friend of mine put his house in west dublin on the market in July 2006. He son reached sale agreed with a buyer, and everything was to be signed within a 9 week timeframe.
That 9 weeks came and went, and I’m told that no matter how many times my friend’s solicitor pestered the other solicitor, the other buyer kept saying they were still interested in hosue but were still waiting to sell their own house.
So the estate agent put the house ‘back on the market’ while still holding onto the buyer’s booking deposit. Anyway after almost 20 weeks, it transpired that the buyer was merely trying to delay as long as possible so as by the time of signing, the price would have fallen, and they cold force the seller, my friend to renegotiate.
Therefore seeing the stress that my friend went through, I can understand Brianmac, why estate agents do this, but that doesn’t mean I agree with it, I do think that a better solution would be to make booking deposits non-refundable.
There are very few agents in this country who have any decent training in or experience of a healthy, normal market. They have been abl to make things up as the go along and of course, it was almost impossible to balls it up because punters were queueing out the doors.
Now they are fishing around for ploys that might help, when the truth is they should give firm reasonable and realistic advice to their clients (e.g. “If you really want to sell within 3 months I would suggest taking 25% off the price”).
So here are some of the completeley contradictory things that I have seen practiced or described:
Putting up fake for “sold” signs to garner client interrest
Leaving up “fake” for sale signs to garner more client interest (brianmac)
Listing an inflated asking price to allow for room to meet a lower offer.
Listing at a deflated price to generate interest and a bidding war to achieve a higher price.
What was stopping your friend, via the agent, from informing the buyer that because of the time lag they were putting the house back on the market and would be open to accepting another offer? Also to offer to refund the deposit?
IMHO that would be an honest and professional way to handle the situation and potentially the best for your friend - keeping good terms with the current prospective buyer, but open to getting a new buyer.
Brian - With reference to the above quote Id be curious to know what areas do you operate in? Also when you say you have sold more properties in the months following July this year as opposed to last year, what type of levels are you talking about - for example is it a small increase on zero or a substantial increase on an average figure?
at the very start I did not say there were not more properties on the market but one part, maybe a small part, of why there are so many more properties on the market is the above.
Of the 80 or so properties that we have on the market roughly 10 - 15 of them are sale agreed but are still on the internet and have for sale signs on them. we are not showing these properties but if anyone enquires we take their details and offer to show them the property if the contracts are not signed withing a reasonable time frame.
As I have consistantly sold houses in the most expencive areas of dublin and often recieved record prices for these properties and am still doing so, I would hazard a guess that most of my clients are happy with the way i handle the sale agreed process and negociations. Further more it would be in my best interest to have up loads of sale agreed signs as often people call me up and give me business when one of these signs goes up but i have to put my clients interest before my own.
As i also said there are more properties on the market.
they are taking longer to sell and they are often selling for less than they were in Q2 07. I am not trying to suggest that things are wonderful but i am putting across a diferent point of view and stating one or two facts that some of you haven’t thought about.
It was a practice first brought to my attention by two older EA, who have been very successful for well over 20 years.
As stated when I go sale agreed and do not put up a sign straight away I do not show the property to any other potential purchasers, i simply take their names and numbers, if the purchaser goes through with the sale as agreed in the time frame agreed I do not show the property to anyone else, however if the purchaser starts messing about and doesn’t sign and return contracts I then and only then start showing the proerty to other people and only after informing the proposed purchaser that I am about to do this.
I do not agree that I am misrepresenting the situation a property, if a property is sale agreed technicaly it is still for sale if an offer comes in on a sale agreed property it is our legal obligation to pass that on to the owner, most EA’s discourage this type of activity and discourage our clients from gazumping
Simply put, if someone insists on me taking a property of the internet and putting up sale agreed even after I agree not to show the property to anyone else then I must ask the question why and in general it is because they are messers. I put all offers and conditions over to the vendors, but in general they listen to my advice, so technicaly they let the possible purchaser walk.
Anyone who i have heard of who has threatened to pull out unless sale agreed is put up has never walked away from the house that they wanted.