Buying property in recent years has become something of a “full contact” sport with the level of intensity, competition and angst in securing your choice of new home at unprecedented levels, even compared to 2007! The unfortunate reality of every marketing campaign run by every local Estate Agent around London is that only one buyer can “win” in a bidding process – often leaving several other interested parties feeling deflated and “bruised”.
Of course, this has led to some buyers starting to focus their frustrations on the Agents involved and even some mention of the “G”-word (gazumping) for the first time since the 1980’s!
However, buyers do seem to understand that that an Agent’s primary (fiduciary) duty is to their vendor – after all, the owner pays the Agent’s fee and as such, they “call the shots” (within legal parameters). But still, some ask why so many Estate Agents are marketing their properties through Open Days?
The honest truth is simple – with so many buyers fighting over so few available properties, Estate Agents do not want to try to second-guess what the highest possible price will be! All experienced valuers will undoubtedly be aware of what the “book” price of a property should be – but with such competition amongst the buyers, most properties actually “sell” for a considerably higher figure than this – the “X-Factor”, if you will!
Due to this reality, traditional Estate Agency has rather gone out of the window, and Agents have had to re-invent their marketing methodologies to “auction” rather than “sell” people’s homes to the highest bidder.
As such, Agents are now choosing to offer properties to the market, asking for “Offers in Excess of £xxxx”, or simply setting a “Guide Price”. Of course, neither of these is, in a traditional sense, an “Asking Price” – and is rather a guide or benchmark, which very often the Agent seeks to better.
This marketing methodology, coupled with the use of Open Days ensure that the owners have very limited interruption to their daily routines, with all buyers attending a single event, whilst almost guaranteeing the highest possible price with most owners subsequently receiving multiple offers.
A “live” example of this phenomenon would be a modern flat in Hackbridge sold very recently which attracted 33 viewings at the Open Day and 11 offers – achieving a sale price many thousands of pounds in advance of the marketing price, and comfortably setting a new benchmark figure for the development. Although, this sounds impressive, it is in fact quite a common occurrence, with 25 – 30 viewers expected at most Open Days!
Of course, none of this is great news for buyers – especially with little sign that things will change much in the near future – but experienced agents will undoubtedly remember the times when the “boot was on the other foot”, and that the market is cyclical! It may be a “Sellers’ Market” now – but logic dictates that, at some stage in the future, this will turn on its head and the buyers will “hold sway” for a period. No doubt – they can’t wait!