With estate agents acting primarily for sellers and land owners, buyers get poor advice or representation all too often.
Even though they are the ones raising (and usually borrowing) the money for each transaction, they are often the last ones to be told how things are progressing, especially where chains of other sales are involved. A lot of patching up of interlinking chains is frequently going on behind the scenes, which is not necessarily to the advantage of unsuspecting buyers further down the chain. Sale prices at the lower end may require to be re-evaluated.
This is inefficient and ought to be changed otherwise the different local housing markets across England and Wales cannot begin to function more like perfect marketplaces as they should do.
All this happens because estate agents are primarily motivated to try and obtain the best price they can for whatever asset it is they are selling, since they are contracted to act on behalf of the seller. The buyer is often the last person to be told when bids in competition with their own are are being negotiated by the selling agent and then the only remedy remaining for them is to have to find more cash to increase their offer! It operates rather like a sort of clandestine bidding war usually conducted over a telephone.
House prices as a result, are now passing all time highs but also, they are increasing beyond average couples’ annual earning capabilities for maximum borrowing requirements. This is a big problem especially where earnings are falling. It’s vital that a more generally acceptable approach is available to everyone embarking on house moves, especially if they are first-time purchasers. Purchaser mobility ought to be what should be improved.
The only way this could be done would be to change the way residential property is sold by having agents acting for buyers instead of only acting for sellers.
It is clear that existing estate agents are understandably likely to be reluctant to consider such a change for as long as they can continue to control sales progress in the way they have done essentially since the 1920s.
It would require the buying public to start complaining about the anomalies they are having to contend with when using agents, as well as to prevail upon government to make the necessary improvements to bring about fairer but competitive pricing processes across all residential property markets. Only then could house prices track buyer purchasing power in the localities in which each particular property is located.
The correct solution to this problem does need further in-depth explanation in order for the concept to be fully understood.
How to Improve all local housing markets across England and Wales
Posted by: Peter Hendry, Housing Valuation Consultant
Author of:– The House Price Solution (otherwise known as The Hendry Solution).
What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?
Constructive comments are very much welcomed.