Do we really need estate agents?
Once the buyer and seller have reached agreement, the sale via a notaire seems simple. So why do we need estate agents?
AROUND 3,000 estate agents closed their doors in 2012 and, with roughly the same number shutting in 2013, it is thought that about 10% of agencies are closing each year.
The key contributors to the decline are the global slowdown in the property market and the growth of websites that make it easier than ever before for sellers to contact buyers and save thousands of euros in estate agents’ fees.
In fact, it is so easy to upload some photographs to a free advertisement site like leboncoin.fr that some Connexion readers have been asking why do they an estate agent? After all, once the buyer and seller have reached agreement, putting the transaction in the hands of a notaire is straightforward.
YES: Agents are experts in negotiations and provide security for viewings
We asked the president of Fnaim, (Fédération Nationale de l’Immobilier), Jean-François Buet, to explain the benefits of using an estate agent. He replies:
“The answer depends on the seller. Firstly, sellers often don’t know the exact value of their property, they don’t know how long it will take to sell it, and they don’t know whether or not they can trust prospective buyers. An experienced estate agent knows these things.
“I know someone who placed an advert, got lots of replies, showed one couple round the house, everything went well, the couple took photos, asked lots of questions about the house, the security system and whether they could come back with their children at the weekend. The owners said they would be away and fixed a date the following week, but when they got back from their weekend away, they found that their prospective buyers had completely emptied the house. Everything was gone.
“I’m not saying that happens a lot but showing total strangers around your house can be a risky business and the estate agent’s job is to check out prospective buyers, make sure they are serious, that they have the money, that they are really looking for this type of property.”
Mr Buet said this was done by getting prospective buyers to sign a form with the agency before viewing and, if possible, getting some details of financial arrangements so only real prospects see the house.
He countered the misconception that estate agents just ‘stick a picture in their window’, saying a good agent drew up an individualised marketing strategy for each property.
On one side agents know what type of pictures attract target buyers, on the other they also know “the moment to strike, which season is best and which time of day shows a property off to its best advantage”.
Getting the best price was the aim but also to smooth the sale for both sellers and buyers. Smoothing the sale meant “an experienced estate agent can negotiate prices and dates and small things like whether the new owners want to buy the swings in the garden.
“It gives time to think during the negotiations: no-one has to answer immediately.
“Also, estate agents can prevent couples arguing about the way they are selling their house. This is especially so for divorcing couples because a canny buyer can slip between their arguments and get a good bargain ... and also, houses in which people are arguing have a bad atmosphere.”
The question of agents’ fees is a major one for buyers (they can be up to 8% although negotiable) and, asked where agents earn their fees, he said:
“Whatever anyone says, and I agree it’s wrong that estate agents fudge this issue, the seller pays the agent.
“I think our bills should be presented as an itemised list of services rendered: photographs taken, advertising placed, advice given, visits undertaken, paperwork completed, negotiations concluded, etc.
“The average estate agent’s fee is €7,000, and that has to cover all the work they also did for sales they didn’t make, as well as the ones they did. They can’t charge for services rendered to clients when they didn’t sell the house. But perhaps that needs to change, as it gives the impression that bringing people to visit is free. We need to make our charges clearer and more transparent.
“I don’t think the internet has revolutionised things that much, there have always been good and bad agents, hard-working and lazy ones.
“But the evolution of the market, especially during the economic crisis, means people have had to pick up their game and that’s a good thing for consumers.”
NO: We did not have to bargain or drop the price, everything went completely smoothly
In Paris, Dominique du Paty de Clam sold her three bedroom flat for €791,000 in just three days using the website pap.fr (Pap stands for particulier à particulier).
“The first time I put the flat on the site I had an offer in two days but the buyer called the deal off a week later, so I put it back on the site. We had 25 visits in three days, and took the first offer we had. We didn’t have to bargain or drop the price, and everything went completely smoothly.”
She would not go as far as to say that estate agents do not have their uses however.
“When you don’t have time to deal with it yourself, or you live in an area where properties don’t sell easily, or there’s a major fault with the property, sometimes an estate agent is justified. But if you have a property that is in demand, in good condition, and at the right price, then you can sell it easily yourself.”
Price is the most important element, she says. “I got three estimations from three estate agents and then I took their commission off, and decided on a price a little higher than what they had advised.
“I think estate agents try to make you sell as cheaply as possible. But of course, if a property is overpriced, it won’t sell and then you have to drop the price.
“There’s no point in dreaming, you love your home, but to other people, it’s just a house, just an apartment. You have to look at the market and be realistic.”
She says that she was not afraid of being robbed or cheated.
“We all have different temperaments. I’m not a person who is frightened of things.
Obviously, I took some precautions. I asked people for their identity cards before showing them the flat, for example. I also set up a gmail address especially for selling the house, in order to protect my identity and my private life, and I didn’t give out my telephone number. But all the replies seemed honest and straightforward to me.
“I don’t see why you can’t use an estate agent and a private sale site like I did simultaneously. As long as everyone knows what you’re doing you why not try both? You just have to be honest with everyone.
“We are now looking to buy another three bedroom flat in Paris, and we’re searching in both private sales websites and agencies because when it comes to family flats in Paris there’s so little on offer and so many buyers. Prices are through the roof, it’s totally ridiculous but demand outstrips the supply so the prices stay sky-high.”