The Times They Are a Changing
Which business sector employs the most negotiators but does the least negotiating? Answer: Real estate agents. Everyone from the Principal Partner to the 18 year old spotty youth employed to make the tea and erect the ‘For Sale’ signs revel in the title, but our perception is that most of them might do a bit of soft-shoe haggling when selling a house and that’s about it.
But times are changing. Property prices in the recession haven’t fallen as much as was anticipated, and that is because of a dearth of property on the market – scarce supply keeping prices buoyant. As a result, agents are resorting to some interesting negotiating tactics to get prospective vendors to commit to selling through their offices. Foxtons have offered a 0% commission rate from time to time before, usually limited to the first few who applied. They are doing it again, from several offices in North London. So other agents in these areas have had to up their game to compete with this; you can’t do cheaper than free.
How do they do it? The tricks include subterfuge – for example over-valuing the property to ‘flatter ’ the owners, and ‘blozzing’ – talking up the state of business and their agency’s successes. This latter is endemic in the industry – in the last 2 years I have not seen a single property supplement in a newspaper with a headline that reflected the current state of the market.
There are also some negotiating techniques which solve the problem with integrity as well as success. Agents, who recognize that the prospective vendor is buying them, and their expertise, do well, as do those who know that the commission is only one of the considerations vendors take into account. An estate agent’s contract has lots of variables, all of which can become negotiating chips useful for trading. The more expen