20 February, 2019

When do I need to be suspicious?

Responsibility of an agent when giving valuation and later

Being a real estate agent is highly responsible. Unfortunately the acknowledgement of this profession is extremely low in Hungary. Whether it is the same abroad, I do not know. While I am sorry about that and trying to work for the change of this negative attitude against agents, listening to previous experience of some of my clients, I can understand where prejudice comes from.

Unfortunately there are many agents unprofessional and unreliable. That is what I understood from the stories of my sellers and buyers.

From a seller’s point of view, the first task of an agent is usually visiting the apartment, speaking to the seller and giving a correct valuation. Many of them fail already at this point while first step is always very important in any kind of business. The same in private life but let us focus now on a fictive realtor who visits your flat and lists you all the drawbacks of the apartment to push down its price in the hope of a quick sale. Very bad. Then comes another agent – much more typical these days – who praises your flat to the skies to please you, tells you a nice high price what you like of course and you sign the agency contract. What happens then? You will not even hear from the agent for the next weeks or months. Very sad. Why do that many agents? Franchise agencies oblige all their agents to make a certain number of new contracts every month. They do not mind if the apartment is right now not sellable at the agreed price. They have a signed agency contract against other agents who told less price and failed. They will contact the seller 2 months later to decrease the price as there are no serious enquiries.

I cannot tell you any good advice how to recognize these swindlers, but be suspicious if you have the feeling that the agent wants only please you and not telling a professional objective valuation. You also have to keep in mind that the real estate market is a bit of a stock market, not so volatile of course, but the price of a property is given by the buyer at the end of the day. You can be lucky by having a buyer who seeks an apartment exactly the same style as yours but you can be also unlucky which lowers the final price. Self-confidence is important but in my experience people with too much self-confidence telling you the exact sales price of a flat or the future of the property market are usually unreliable.

Another trick of agents not having real clients to show your apartment is showing your flat to colleagues or friends and giving you low offers to make you decrease the price. Even if you do not accept the low offers, with time you will decrease most likely the initially high asking price which the agent told you at the beginning. Be suspicious if you receive only oral offers passed on to you by phone or by email. A serious buyer gives an offer in writing, signed and scanned and pays 1% security deposit.

If you are a buyer you can bump into also strange situation. I have heard from many clients similar stories. They contacted an agency to visit a selected property advertised when they were informed that the flat had just been sold, but they could be offered a very similar one. It turned out only at the viewing of the “similar” apartment that it is not a 2 bedroom flat and not on the 3rd floor with street view, but a spacious 1 bedroom flat with courtyard view on the 1st floor without much light. Why such agents do all this extra work to show apartments which do not meet the requirements of the clients? Is it simple unprofessionalism, aggressive sales tactics or they need to list every week the number of viewings done for their boss? All these together, I think. If you experience such, do not waste your time with that agent anymore.

Having an agent is very important and you can benefit a lot from his/her work, but make sure you choose the right person who understands your needs and works for the best price for you whether you are a buyer or a seller.