Wednesday, November 10, 2010

Human Nature - Wednesday

‘Not sure how much longer I can be doing with this.’ Grumbles assistant manager T as he puts the phone down after a sale has fallen through. I’m tempted to laugh in his face. Compared to me, he’s only just started toddling in this industry – but then maybe I’m the fool for trying to be a marathon man?

‘Does it ever feel any better? Asks negotiator S turning to me for advice, her breasts following a nano-second later. I’m momentarily distracted, before telling her with a heart heavier than her bra that it stings like a bastard every time. The work and time you’ve invested in a sale - not to mention the fee that was pumping up your pipeline income and tantalisingly imagined in your commission statement a month or two down the line - evaporating on the whim of a third party, feels like a boot to the stomach. It’s a pain that doesn’t lessen with exposure – if anything the contrary.

‘We should bill the sods when they pull the plug like that.’ Posits T. ‘They just take the piss with no sale-no fee.’ He has a point, at least when the worthless Home Information Packs were briefly in existence we could use their creation as a spurious fee generator, with a nice net profit on every one. I still hated them though.

‘It’s human nature.’ I inform the team sagely, briefly enjoying my role as a father figure if it wasn’t for the sagging stomach, waning testosterone and vanishing hairline. ‘As soon as someone accepts an offer they think they’ve sold to cheap, meanwhile the buyer is already wondering if they’ve paid too much.’
‘It’s a conundrum.’ States T and trainee F frowns that frown - and we all wait.

‘Isn’t that a board game?’ he eventually asks haltingly. And a brief but increasingly obtuse conversation bounces round the office involving Monopoly, how much you were charged for passing go, wasted days watching Countdown on daytime television and who would give Carol Vorderman one? When lettings lush B revealed her twisted take on the scenario it was a mix of vowels and consonants too far – so I called time.

Maybe I would miss this if I ever moved on? I think, as I traverse town later, three sets of keys jangling on the passenger seat. That thought lasts about ten minutes before I meet an obnoxious cash buyer couple who think their financial status entitles them to act like complete arse-holes.

‘We want money off whatever we decide to buy.’ Drawls the something-in-the city tosser, as his partner who as far as I can ascertain only contributes to the relationship horizontally, nods in pliant agreement. ‘It’s a buyers market you know,’ continues the shifty-eyed commodity purveyor, reeking of a dodgy aftershave that reminds me of my father’s Old Spice but probably cost more per ounce than Rhodium. ‘I expect a discount.’

You see people at their worst where property is concerned. Greedy, duplicitous, arrogant untrustworthy – and the public are no better. I invent a slightly spurious tale about an earlier price cut on the flat, then sensing the woman likes the proximity to some up-market shopping opportunities, concoct a couple of other viewing to follow. If a buyer thinks someone else is interested in a property it inevitably sharpens their interest – a sort of subconscious validation.

‘My finances are my own business.’ Growls city-boy when I quiz him further on funding. His offer is still derisory and the chances of signing a contract slim, but a bid is a bid and who knows in another six months time my vendor might snap his arm off. I still need to know how he’s going to pay for the flat though, as I have a duty of care and a sneaking suspicion this spivs definition of “cash” isn’t the same as mine.

‘So you need a mortgage?’ I clarify icily, after a terse exchange.
‘Yes but we’ve nothing to sell.’ Snipes the woman, as I’m tempted to point out she won’t have much to barter with in ten years time.

My client rejected the offer – not sure how much longer I can be doing with this.


Anonymous said...

I accept that the man in this case was probably a complete arsehole, as you put it. However it always amazes me how agents seem to regard proceedable buyers exploiting their natural advantage in a dead market as (terms I have heard) "arrogant", "vultures", and "parasites". However in bouyant conditions they think it quite reasonable for sellers with the good fortune to have a roof over their heads to expect others to engage in a competition of indebtedness and pay 5x what they paid for said roof in the previous decade "because that is what it is worth", without being seen as exploiting the next generation.
No-one has the moral highground. There is no "right" price. It is simply a transaction between two (more-or-less) willing and able parties. If someone is paying less than the market price at that time then - by definition - the seller could sell it for more to someone else.
But I strongly suspect you know this.

Anonymous said...

I believe secret agents loathes buyers and sellers in equal measure. But the sellers pay him, and are marginally less likely to waste his time...

Anonymous said...

What no purchaser seems to accept is that, just per chance, as professionals in our field, we, the estate agent, are ahead of the game and that the price the property is marketed at has already taken into account market conditions!

Anonymous said...

Ah yes, the EA already knows the market value!

Of course, what the prospective buyer doesn't know is whether the price being asked is the one the EA recommended. Or whether the EA who got the job was the one who recommended the highest price, regardless of their commercial judgement. Or even whether some EAs get it badly wrong.

Case in point. One year, when we thinking of moving (didn't take the plunge for another 12 months, but we were seriously thinking about it), we invited 3 local EAs with established offices within a mile of our house, to come and give us their "free valuation". We did not tell the EAs what our opinion was, not least because we thought we could be wrong.

The first EA said "£400K" - we were thrilled - it was more than our optimistic guess. The second EA (one day later) said "£300K" - this was worse than our pessimistic guess. Two days after that another one said "£350K". We had hoped to hear "£375", but would have accepted the "£350K" figure from any of them (including the first) as a sensible price.

Still, I have looked at claims, "the EA knows best" rather more sceptically since then.

Even so, that is a valuation for the market in general. SA has made the point that a "proceedable" offer at £xxxK may be a better offer than at £5K more from someone who has a house to sell. So, what does the EA do? Advertise it as £285K if you've got a house to sell, but £260 if you're cash buyers wanting to move in immediately?

I imagine that the EA judges these things differently in different sets of market conditions - when mortgage money is easy, you may say that the vendor can hold out for the best price.

In the market as it is at the moment, you may say to the vendor, "Look ask so much, but be prepared to drop the price substantially for a good buyer." And a sensible buyer knows this. If they're in a strong position they will bargain - just as a vendor in a strong position will hold out for the full asking price.

Oh yes, and the prospective purchaser also knows that house pricing is usually based on psychological calculations as well as simple decisions about value. Otherwise there would be many fewer houses marketed at £299,995.