Posts Tagged ‘Property Developers’
The term estate-agent is a generic term and refers to any person or company that deals in the selling, buying, renting, and managing of property. In the UK, people and firm that deal with renting and managing rented properties are known as ‘Letting Agents’.
Originally, the term estate-agent referred to a person who was managing a landed property. Those who dealt in buying and selling of houses came to be called housing agents and those who dealt in buying selling of land were known as land agents. In America, the term real estate broker is used for estate agents.
There is a lot of competition among estate-agents and they are not the most trusted by the people. In the UK, an estate-agent has to be registered with the Office of Fair Trading and their activities are defined by this office as well. Individuals and property developers use estate-agents to help them sell their property.
The estate-agent evaluates a property and puts a price on it. He or she will then inform the owner of the price they can expect to get for the property. They also inform the seller of the terms at which they will be ready to handle the sale of a property.
Registered estate agents are required to use the services of a registered surveyor to evaluate property. A number of regulations in the UK protect clients against fraud by estate-agents. Then, there are a number of unregistered estate agents also. When a property is sold the estate agent is required to arrange the necessary papers and the transfer of the property.
Estate agents have further divided their roles in the UK. Some only deal in commercial properties, others in houses and apartments. Some estate agents only work with property developers and help them sell their upcoming projects. In addition, estate agents have divided the areas in which they operate. Like an estate agent in one suburb of London will be unaware of property prices in another area. You have to be careful when selecting and dealing with estate agents as their livelihood depends on commissions and they try to maximise that. So if you need the services of an estate agent make sure you run a background check on them. An estate agent’s business depends on their dealing and if their dealing is unfair, they gain a bad reputation very fast.
People don’t have the time to get their property surveyed and try and put a price on it. You will know how much you bought it for, but you won’t know its current market value. Market prices are a factor that is determined by estate agents. They look at property price trends, the age of the property and its build qualities. It’s the value of the land that forms a major factor in determining the price of property and not the house built on it. It’s the area that determines the price of properties and several financial conditions. It’s a common knowledge today that due to the financial crunch property prices have plummeted.
Estate agents have been badly affected by the financial crunch as there are very few buyers in the market today.
By: James L Harrison
Comedians have their minds full of lawyer jokes, such as “What’s the difference between a lawyer getting run over and a snake? A snake has skid marks in front of it!
One step down from lawyers on the ladder of shame are estate agents. They are the people who sell property. This article talks about how they privately push deals to cash buyers, and how developers get property with “no money down.” Property is a hard business, and there are millions to be made and lost!
The free market rests on the common principle that the best price is found for a product or service. Attempts to interfere with that are seen as illegal in many countries.
I have for years seen properties sold under market value by estate agents. Those sales are done via social and business contact to cash buyers that the estate agent has obtained over years.
Recently, I attempted to buy a house and the estate agent refused to provide any sales details, as I was not a cash buyer. I was so stunned by this, that I complained. Following my letter, I was banned from visiting the estate agents (a national chain) and told they would call the police and charge me with trespassing if I breached their ban. This example shows how far people will go to make money and motivated me to write this article.
I will briefly outline how financing is arranged for a property purchase.
A cash buyer is someone who does not need a mortgage. That means someone who has assets that can be sold for a cash amount, or he has a house being sold and the proceeds will be available before the new purchase.
There are plenty of mortgage products available in the current market. The principal types of mortgages are buy-to-let, let-to-buy, and a normal homebuyer’s mortgage.
A common practice by property developers is to attempt to buy under value by 15% (the mortgage deposit) or to obtain a 125% mortgage based on the first valuation. The concept is that after the developer bought 15% below market value, the developer can quickly re-mortgage or obtain a further advance and recover the deposit sum. This has meant the developer obtained the property without any deposit after the re-mortgage by using the equity. A 125% mortgage makes the assumption the property is undervalued.
A common way of finding properties undervalued is to find properties recently inherited following death (probate), properties being re-possessed, and when the owners are overseas (and hence out of touch with current pricing).
The Land Registry often provides the sale prices of houses by postcode, so you can check what is a market price within a local area. There are several commercial services offering a similar service, e.g. Nethouseprices.
Once armed with the financing and market details, you are in a strong position to find a good deal.
The estate agency business has been rife with misrepresentation. In an attempt to stop that, the Ombudsman of Estate Agents has been created and also there is a professional membership scheme of the National Association of Estate Agents.
The 1979 Estate Agents Act also offers protection. There have been several prosecutions on the basis of discrimination against purchasers. The 1979 Act states that an estate agent cannot discriminate based on additional services (e.g. mortgages) if could offer.
Finally, you cannot trust the estate agent.
By: Trevor Oakley
