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A week in the life of a business transfer agent.

publication date: Nov 10, 2007
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I am clearly one of a kind – a sensitive Yorkshireman!! OK, maybe sensitive is pushing it a bit far, but I do find myself frustrated that while the majority of agents offer an excellent service, we are constantly viewed with suspicion due to the public perception of the industry. I thoroughly enjoy my work and the industry, but my average week always highlights that we must find ways of moving our industry forward, and changing the way in which agents are viewed. What’s happened this week?

MONDAY

Went to appraise a business for sale in Yorkshire, unfortunately following an agent who specialises in the ‘premium pricing policy’. Monopoly position, nice accounts, bit of potential to increase income, seems fairly sustainable. Give Vendor indication of likely sale price to be told that agent X has indicated more than twice as much!! Decide to research market again to make sure my marbles haven’t completely gone. After analysing the last 50 similar businesses offered for sale I find that the only agent indicating sale prices at such a high level is agent X. Cross reference with one of the UK’s leading Valuers to be told that my indication is correct, if not, possibly a fraction on the high side!!

As a result, I try and guide the potential Vendor to look at the market for themselves, and ask agent X for a justification for their estimate. Potential vendor is not interested, and has instructed agent X. Beggars belief that a sensible Vendor could instruct an agent who has so blatantly ‘over-egged’ the appraisal, although it could be that there was a diamond mine in the cellar that I overlooked!!

TUESDAY

Tried to get agreement on a price between Vendor and interested party who had had a valuation. RICS Surveyor had valued at £750,000 and purchaser was willing to go forward at such a figure. Pass offer to Vendor who tells me that he has a valuation, acceptable to his Bank, at £900,000 and only a few months old.

Advise purchaser who is more than happy to revert to her Bank with an alternative valuation, so I ask Vendor to forward me a copy. Vendor agrees, and sends me a single page, with names scribbled out, which is from his Bank instructing the Surveyor and ‘suggesting’ a value of £900,000. Ring Vendor and point out that this is not a confirmation of valuation at £900,000, and ask for the actual valuation.

Nothing forthcoming so track down instructed Valuer to find valuation was £750,000!! Ring Vendor to discuss and he promptly feigns surprise and claims not to have read the Valuers report, although he can give me a lengthy list about comments in the report with which he disagrees. Give me strength!! Estate Agents get dragged through the mud for sharp practice etc etc. but some of the Vendors do nothing to help!!

WEDNESDAY

Took a call from a purchaser making an offer on a business already ‘SSTC’. As required, passed the offer forward to the Vendor who instructed me to accept the new, higher offer and cancel the previously agreed sale. Rang initial purchaser who was incandescent that he had been ‘gazumped’, which, in his opinion, was solely due to our unethical practice of continuing to market a ‘sold’ property. I politely pointed out to him that we have to follow our Vendor’s reasonable instructions and that, in the absence of a deposit, as we had advised in writing, the property would remain ‘On Market’.

If he had been willing to give a 100% refundable deposit as a sign of goodwill, as requested by the Vendor via our office, then the Vendor was willing to give us written instructions to refuse all further offers, and he would not have been outbid. After he had employed the full range of expletives, and questioned my parentage, I decided to hang up. This work gives me such deep joy!

THURSDAY

Go to appraise a fast food business, taking great care not to fall foul of the Money Laundering regulations. I wish the Association could have done more to resist this legislation. These regulations give very little problem to the vast majority of residential agents. However, they are a huge problem for BTAs. I run the risk of breaking the regulations almost every day, and I simply do not understand how the legislation got through.

Over 30 years ago I tried to join the police force, and while I consider myself a bit of a ‘tower’, I was rejected as I was not tall enough. Thanks to the NAEA, I now find myself seconded to law enforcement, with a duty to report any instances where I am ‘suspicious of a financial crime’. I previously called HMRC and asked ‘How many cash businesses do you have trading just below the VAT threshold, and how many just above? The answer was ‘Many thousands just below, hardly any just above’. HMRC don’t need me to report instances where I may be suspicious, they just need to work their way through the phone book!!

FRIDAY

Contacted by a lady who has been ‘stung’ by agent Y. Basically been duped into signing a contract, but only given fees later. The lady tried to cancel the contract once she realised her mistake 2 days later, but agent Y insisted that to cancel she would need to pay 50% of the commission upon sale i.e. £4,500. Spent the morning drafting a reply to the Court covering the grounds on which we believe the contract is flawed, primarily 18.2. Fortunately, the lady insisted on a neighbour being present at the ‘appraisal’, so hopefully the Court will accept independent testimony that 18.2 applies. Companies like agent Y need putting out of business a.s.a.p.

SATURDAY

Had a day off.

SUNDAY Read article by Phil Spencer in the Sunday Times about estate agents measuring incorrectly and, as a result, giving wide variations in value for the same property. Is this guy antiestate agent, in business with the Sunday Times, or both? Today’s tome rattles on for about 90% of the article about how a valuation can be hugely distorted by inconsistent measuring techniques. Only in the last paragraph does Mr. Spencer comment that the size of a property does not alone dictate value, but that the value will incorporate many factors including location, condition, character, layout, ceiling height and aspect. Every article I read by Mr Spencer always seems to harp on about poor performance of the industry, have huge gaps and inaccuracies, yet there never seems to be a reply.

The solution to most of the endless problems the average ‘bona fide’ agent has to suffer?

In my opinion – legislation.
If the industry was properly regulated by an independent body, with the necessary powers to act against those who operate unprofessionally, then we would not have to endure the constant belittling of our efforts. Commercial and Business Transfer practitioners would have a meaningful voice and Vendors could have confidence in their agent, rather than be suspicious of them. The opportunities to criticise agents would fall away as the ‘shysters’ are driven from the industry, and the perception of our worth would be enhanced.

In reality, most of the criticism of estate agents is levelled at those who are not members of the NAEA or ICBA, but the reputation of the legitimate agent is impaired as a result. The NAEA and ICBA do a great job, but can only police those who volunteer to abide by the relevant Code of Conduct.

Ultimately legislation will arrive, and the industry will polarise into fewer large, nationwide agencies, and a number of niche agents, either by business type or location. In the interim, in the absence of legislation, every legitimate agent should look to persuade his professional colleagues, and competitors, to join the ICBA and distance themselves from those of suspect standards – our voice will be louder if there are more of us. There are significant benefits to membership so, if a professional agent is not a member – why not?