Property Gold: How to be an attractive buyer

Property Gold is a monthly column written by independent property consultant, Alex Goldstein. With more than 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. This month, Alex shares his advice on how buyers can put themselves in the best position – and it’s not all about offering the highest price. 

Ask any estate agent how many potential buyers come to them and say they are ‘cash’ and they will usually sigh and roll their eyes. This term is often thrown around quite nonchalantly and buyers need to be wary of their phrasing.

Cash in the eyes of an estate agent, really does mean cash. It is sitting in a UK bank account ready to be transferred to their solicitor. However, to some buyers it can mean part is from their savings account and the rest from their bank – in the form of a mortgage. Why is this a problem? Whilst having a mortgage isn’t an issue per se, it does mean that an agent (and their vendor client) have extra hoops to jump through, which usually creates time delays. This more prominent currently as lenders are being even more cautious, plus staff cutbacks and backlogs don’t help. So in other words, you are deemed to be a higher risk as a buyer.

Another misused phrase is ‘I am sold’. This could mean several things: ‘under offer’, ‘exchanged’ or ‘completed’. This one phrase with three possible interpretations, all of which have different meanings, can damage your reputation if misused. Being under offer (or sold subject to contract) is where you have agreed to accept an offer from a buyer and memorandums of sale have been issued. Having exchanged is the legally binding part and is what property professionals always push for, as there’s rarely any going back after this point. Completed means you are formally over the line and own the property.

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When it comes to being a property buyer in the current market, everything boils down to how risky the agent and vendor perceive you to be. You may be thinking at this point that to secure your dream home, you need to be all cash and offer the most amount of money. Not true.

It is the reliability and security of your offer, versus the monetary amount. In other words, you can offer cloud nine money, but if it is subject to a chain of several people and a high loan to value mortgage, then your risk will be seen as too high. However, if you have a limited or no chain and sensible mortgage borrowing, then you are more likely to transact – which is what actually counts.

Interestingly another element has become more important recently and that is time. If a buyer can offer additional time to a vendor to help them find an onward property, then this can be the ultimate ace card as it takes stress away from the vendor.

The key as a buyer is to get yourself into the best possible position and be prepared to think laterally to overcome any obstacles. Get this and your phrasing right with estate agents and they will judge you in the best possible light.

If you have any comments or questions for Alex, please feel free to contact him at alex@alexgoldstein.co.uk

Property Gold: Playing the agency game

Property Gold is a monthly column written by independent bespoke property consultant, Alex Goldstein. With more than 17 years’ experience, Alex helps his clients to buy and sell residential property in some of the most desirable locations in Yorkshire and beyond. 

This month, Alex discusses the pros and cons of instructing more than one estate agent. 

 

Two heads are better than one, but in estate agency terms this isn’t necessarily the case when it comes to instructing agents.

Some vendors feel that by instructing two (indeed sometimes more), they think that they will have greater exposure in the market and more likely to sell for a premium. However, unless this is done under the right circumstances, in the right way and with great care, having two or more agents working for you can be counterproductive. Not only could you run the risk of appearing desperate to sell, but agents behind the scenes could be arguing about who found the buyer and not necessarily working in your best interests.

So under what circumstances should one instruct another agent(s) and how do you play the game?

Sole agency is as it sounds. One agent working on your behalf and for straightforward sales, usually the best route.

The polar opposite is multiple agency, where two or more agents are instructed, but only the winner gets the fee. This route is not worthwhile and actually dilutes your sale efforts, as agents will see the risks versus reward as too high and won’t bother selling your home!

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The middle option can be used if your sale is losing that original sparkle. To beef up your marketing, create a ‘marketing spike’ or just to get the original sole agent re-energised, instructing a joint agent could be worthwhile… but proceed with care.

Critically the new agent must be very different from the original agent, so that they fill in any gaps that may have been missed. The downside with two agents is that there is a higher commission rate, yet this needs to be balanced with what you could gain on sale proceeds.

Now here’s the tricky bit – how does one split the commission between joint agents? Yes 50/50 can work and both agents then collaborate and work together for you, the client. However in some circumstances it is worth weighting this towards the winning agent.

An extreme example of this I did recently, where a vendor asked me to get their original agent back on track, but they didn’t wish to disinstruct them given the work they had put in thus far. I brought in a joint agent, but specifically chose them as I knew both agents had a major personality clash and there was fierce rivalry.

I then weighted the fee 80/20 to significantly up the ante. The new agent aggressively went about their new instruction to prove a point and the original agent had a serious wake-up call. Needless to say we got a great result and the new agent won.

Instructing a joint agent can be useful to rejuvenate your sale, however it must be used with caution and done in the right way, otherwise you could be up in a worse position than when you started!

If you have any comments or questions for Alex, please feel free to contact him on alex@alexgoldstein.co.uk