London Estate Agents |
Estate agents work for sellers and are legally obliged to achieve the highest price possible.
If you are planning to buy a property in London it is essential that you remember this fact.
It doesn’t mean that they will lie to you, although some unfortunately will. However, statistics and opinion masquerading as facts can be far more dangerous.
For example, I read this in a newspaper:
“A new round of sales has started at London’s Chelsea Creek development, part of a regeneration project by the developer St. George. The Chelsea Creek project will deliver 2,376 homes.
‘The last 15 years has seen intense regeneration come to fruition and the market appetite remains robust,” said Tom Hawkins, Partner, Head of International Project Marketing Middle East, Knight Frank, which is handling the sales. “With the limitations of expansion within central London, areas open to regeneration remain exceptionally rare and this site represents a key marker in the London property market.’”
Avoiding the Pitfalls: Navigating London Estate Agents‘ Sales Tactics So You Make An Astute Property Acquisition
This all sounds very exciting but what is a key marker? What do you consider as central London?
I mention this as Chelsea Creek is actually in Fulham not Chelsea, and I have no idea why it represents a key marker to anything as it is next to two other quite big new developments.
Now this is a fairly obvious piece of marketing which is totally legal, but it gives you a glimpse into the way all properties – not just new developments – will be presented to you, i.e. with a great deal of hype.
By the way Knight Frank are a very good estate agency and they are simply doing their job in this article because they are acting for the seller. Indeed, as one solicitor put it to me, “Even the title estate agents is misleading. They should be called sales agents”.
Unfortunately, as in every facet of life, there are some less than scrupulous London estate agents and even the good ones work in conflict with you as a buyer because their role is not to find you your ideal home or the best investment property possible.
Their role is to sell their clients’ homes for the highest price possible to whichever “applicant” (the agents’ terminology for buyers) they can.
Of course, this is only the tip of the iceberg. There are all sorts of other techniques that can be used to make you think you are making an astute acquisition when, in fact, you may be making a decidedly bad one.
For example, if the developer is offering a discount, would it be unreasonable to suggest that the discount might have been factored into their pricing model and that you might still be overpaying dramatically?
Avoiding the Pitfalls: Navigating London Estate Agents’ Sales Tactics So You Make An Astute Property Acquisition
Even if lots of other buyers have snapped up properties in a development, are you sure they have carried out their due diligence? It is very easy to get swept away by herd mentality even if you are highly intelligent and successful. If you don’t believe me, just think about how Bernie Madoff manipulated a combination of greed, herd mentality and the perception of exclusiveness.
What represents fair value in a new development? This is often very difficult to establish, so you need to be very careful when considering whether the premium you will be paying is worth it. The fact that new developments are easy to buy and supposedly low maintenance (not always the case) does not mean they will be good investments or homes.
The developers make it easy to buy for a reason, but are you aware of what else is available?
And it’s not just in new developments where this happens. It is very easy for London estate agents to manipulate statistics to make a property look better value than it actually is. The easiest way to do this is to show you comparators that seem similar to justify a price per square valuation.
Unfortunately, price per square foot valuations are an incredibly blunt instrument and it is also very easy to compare apples with oranges, thereby giving a completely false impression of what represents fair value.
Conclusion
So, irrespective of the style of property that you wish to acquire, it is essential that you undertake the necessary due diligence to ensure that you have found the best property your money can buy and that you have a clear understanding of values so that you can negotiate intelligently.
Frighteningly, the vast majority of buyers fail to do this. The good news is that this creates an opportunity for you, if you approach acquiring a property in London correctly.
So, to ensure that you don’t fall into the common traps and expensive mistakes the typical buyer makes, please follow my “best in breed” strategy. To discover the tested and proven strategies and tactics I use, you can request a complimentary copy of my book, The Insider’s Guide To Acquiring Luxury Property in London.
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“Jeremy… I really find your book eye opening…. lots of fabulous information… I have to say I appreciate your fine work in this book. Very informative, crisp and factual.” Michael Morgan
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To request your free copy of The Insider’s Guide to Acquiring £1m to £100m Property in London, simply click here, email dee@mercuryhomesearch.com or call 02034578855 (+442034578855 from outside the UK).
