In the first part of the text, which deals with the biggest dilemmas in buying and selling real estate, we looked at the following problems that apartment buyers have:
PURCHASE OF REAL ESTATE OR SAVINGS IN A BANK?
APARTMENT UNDER CONSTRUCTION OR USED?
HOW REAL ARE THE PRICES IN THE ADS?
WHY NOT NEED TO NEGOTIATE DIRECTLY WITH THE SELLER?
As I mentioned before, these are the most common dilemmas that are not unsolvable but can lead to wrong decisions that cost you a lot. In the following text, I will mention some more of the problems that apartment buyers and those who plan to become one face.
So let’s start with the oldest dilemma!
How to easily find your second home in the United Kingdom:
1. SHOULD I HIRE A MEDIATOR?
Unlike western countries, where there is no dilemma of this kind, in our country, there are still those who want to finish the job of buying and selling real estate. The biggest, if not the only reason for this decision is the agency commission, that is. misunderstanding of the role that the intermediary has in the process of buying and selling real estate.
Sellers, are you ready:
To take care of your ad yourself (photos, description of the property), as well as to update it regularly (agencies pay for advertising on numerous portals and in the print media, so the offer of intermediaries is extremely visible),
To answer countless calls from agents with offers for cooperation (that will certainly be the case),
To talk to direct customers, at any time of the day (of course, while you are at work),
To receive complete strangers in the apartment who would like to look at it and at the same time you do not have any records of who was in your apartment (unlike intermediaries, to whom potential buyers sign that they have seen the property),
To negotiate the price yourself and for negotiations to sometimes turn into a discussion or even an argument…
If you are a customer, do you know that you will:
The largest number of suitable properties can be found in the offer of intermediaries (although you are carefully looking for owners)
Be mistaken that the offer of real estate worth seeing is large and you just need to choose what you like the most (experienced agents analyze ads much more realistically)
Going through portals and print media yourself, often losing patience with the same apartments advertised in different ways, and you won’t realize it right away,
Schedule your own viewing of apartments, matching your obligations with the obligations of the agents who show them
You will have to take care of yourself, whether the “papers are clean” or you will hire a lawyer for these needs…
The largest number of real estate purchases and sales is done through intermediaries. The reason is simple, important to everyone, and fits into one word – security. How much does a secure service cost? Usually 2% of the agreed price… But when you think about it a little better – security doesn’t really have a price!
2. HOW TO CHOOSE THE RIGHT AGENCY (AGENT)?
As for all other, important activities in life, a recommendation is the best way to a good mediator, but if it is not there, you should schedule an interview in several agencies and choose your agent based on your personal impression. Ask intermediaries anything you want because there are no stupid questions, there are only bad answers.
3. IS THE AGENCY AGENCY OBLIGATORY?
There is no dilemma here, the Law on Real Estate Brokerage says that the conclusion of a Brokerage Agreement is mandatory! This Law calls the buyer and the seller in the same way: the principal.
Each principal concludes an Intermediation Agreement with its intermediary. In one purchase and sale, two agencies usually participate, but it also happens that both clients have Intermediation Agreements with the same agency.
4. SHOULD I SIGN AN EXCLUSIVE REPRESENTATION AGREEMENT?
This question is not asked in countries that have long-established, developed real estate markets, which have been operating for decades with smaller or larger oscillations but still survive. There, it is completely normal for the client to cooperate with one intermediary and for the job to be completed to mutual satisfaction.
In our country, the issue of the Agreement on Exclusive Representation is still creating resistance. Why?
In practice, it happens to me that the seller says: “I will not give the apartment for sale to anyone but you, but I would not like that Exclusive Agreement… somehow it limits me…” And it should not feel that way.
An exclusive representation agreement means secure earnings for the intermediary. Because of that, the seller who signs it has a better treatment compared to the sellers who entrust the sale of their real estate to a larger number of agencies at the same time.
Real estate with exclusive contracts is always advertised in the so-called “Top” or “premium” ads that are easy to spot. Also – you can talk about the amount (reduction) of the commission and that is why you should always have a conversation with an intermediary on this topic because the exclusive really allows for special status.
On the other hand, there is another, very important reason for sellers to sign the Agreement on Exclusive Representation, and that is – achieving the highest possible price!
What happens when a seller entrusts the sale of his property to a number of intermediaries?
All hired brokers advertise the same property trying to differentiate each other and trying to find a buyer. Of course, the buyer will first contact the agency that has the lowest price in the ad. Because of that, sellers often find themselves under multiple pressures from agents to lower the price, experiencing the situation as if they had “fallen into a machine”.
And what happens when a seller entrusts the sale of his real estate to an intermediary?
Knowing that he has no competition and that his earnings are secure, the intermediary will pay special attention to such sales, especially when it comes to advertising. In case there is no customer response, the price is lowered only when the seller is suggested that it would be good to take such a step. No pressure and no nervousness. This approach allows the seller to get the highest possible price for his property because it is corrected “little by little” in the ad. Since the sale is led by one agent, the seller easily negotiates the terms of the sale and always has an insight into its course.
The contract of exclusive representation does not limit the seller in anything, on the contrary, it gives him the status of a privileged client!