Professional professionals or make a quick buck profiteers?

Monday’s Daily Mail headline about an estate agent attempting to fleece a dying gentleman out of  the thick end of a million pounds did nothing to enhance the professional reputation of our industry.  London-based Bargets had written to Mr Owen Hill who owned a property in St John’s Wood, claiming that their agency had a ‘genuine buyer’ interested in buying his home.  Under the erroneous impression that the letter had been written to him personally, he contacted Bargets who dispatched Mr Malcolm Collins to visit Mr Hill in person.  According to court documents, Mr Hill was in a ‘fragile and vulnerable physical and mental condition’, [sic] and was deliberately misled and exploited by Mr Collins, who failed to carry out a valuation merely asking the gentleman how much he wanted for the property and failing to point out that the answer he recieved was substantially lower than its market value.  Further more, he then contacted his brother-in-law to buy the property at the reduced rate.  Following a year long legal wrangle orchestrated by a number of concerned neighbours, the matter was  settled out of court, with the agency’s insurers meeting the costs of the case. Initially, Mr Collins was allowed back into the Barget’s fold, but this was rescinded when his boss/the owner of the agency was door stepped by  a national newspaper with one of the largest readerships. Profuse apologies were offered coupled with a fervent claim that no such nefarious behaviour would ever happen again. Uh-huh.  Mr Collin’s and his behaviour were only denounced when he and more appositely his employer, were publicly outed. Firstly, none of us have squatting rights on the moral high ground, but such shenanigans are indefensible.  This behaviour rightly gives our industry a bad name.  A poll released last year showed that estate agents rank fifth on a series of professions the public doesn’t trust – just below bankers, politicians, journalists and car salesmen.  Illustrious company indeed.  Why do people regard us with such distaste? Stories such as the one above are evidence enough, but in our time-poor, property obsessed society, we are a necessary evil.  Of course anyone can sell their house themselves, saving a considerable amount in fees, but this is time-consuming and requires a certain amount of savvy.  We are professional salespeople who serve a useful function; of course we are there to  make money for ourselves but also to get the best price for somebody’s property.  Like any good deal, a house sale should benefit all parties.  The story mentioned above raises some pertinent pointers for those venturing into the shark infested waters of property selling:

  •  Any letter claiming that an agency has someone who wants to buy your house-yes, your particular house- not anyone else’s, is to put it politely, propaganda.  Interest in the area is one thing, a list of ten proceedable people who want your house and only your house is akin to my claiming that I had to get out a restraining order against Miss Minogue.
  •  Unless you as the vendor have to sell your house by a week on Friday, always be conscious that an agent who comes in quickly with a low, but very proceedable offer that they are pushing you to accept may have some ulterior motive or connection lurking in the background.  Always remember that your agent should, (having discussed the parameters of the sale) be working to get you the best price, not necessarily the quickest sale.
  • An agent must always declare an interest if a property is bring purchased by them or a family member.
  • The world is full of shysters, regardless of the profession.  Various world religions are evidence of this.

 

 

“I sometimes think that God in creating man…

…somewhat overestimated His ability.” Oscar Wilde  After events of the past week, I have to admit that I am with the fop-haired, syphilitic aesthete.  To celebrate Valentine’s Day last week, I extended Mrs Cheshire’s contract and as a reward for her endeavours bought her a brand new 2004 Mondeo diesel, (well she believes the descriptor…).  Yesterday, some ne’er-do-well keyed the entire side of her car whilst she was at work. On most occasions of her returning with a vehicle covered in scratches I have learnt to accept the tale of woe of the bollard/tree/old lady on a mobility scooter that deliberately leapt into her path just as she was coming down the road (admittedly on the wrong side).  However, on this occasion, a coterie of vagrants had been seen loitering in the area of her vehicle and if she had flattened someone on a mobility scooter (and neglected to tell me), the amount of damage to the car would have meant she might be facing a small sojourn courtesy of HMP.   The guilty party was undoubtedly the type to feature in a typical hysteria-driven Daily Mail headline or a Channel 5 documentary; on the dole, father/mother of 12 kids, waistband of their trousers sitting approximately half way down their thigh, you get the less than salubrious picture.  But to qualify people’s behaviour by their employment, dress sense and use of contraception is a foolish one; as the behaviour of a professional gentleman -who works hard, drives an executive car, and wears the waistband of his trousers in the area from which it take its name -and who has employed us as the agents to market and sell his property, this week exemplified.  Having willingly signed a contract, that was discussed with him at length, at an agreed rate plus VAT, he has now chosen to renege on the contract in an attempt to gain a reduced fee. This was accompanied by the classic line of, “If you don’t reduce your fee, I’m pulling out”. Ok.  So he is choosing to forsake the sale of his property, (that incidentally has been on the market for an eon, with a number of our competitors, with no hint of a sale), for the sake of £400 VAT.  He clearly believes that he could coerce us into doing his bidding. Wrong answer.  May I take this opportunity to remind one of the legal definition of a contract: “An agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration” [sic] Law.com 2009, New York  We undertook the task of selling his property for the best possible price that could be achieved, and if successful in doing so, he would owe us a specified fee. Yes, he says, but now I don’t want to pay what I agreed to (by signing the contract). Again, Ok.  That is why we have £5million worth of legal expenses’ insurance. 

When not studying the form of the 17.20 at Wolverhampton I have been known to dip into the works of the Confucian philosophers… stop laughing at the back.  In the words of Xunzi, “Mencius said that human nature is good.  I disagree with that”.  So do I.  You should have been in Cwmbran last week Mencius.

“God grant me the serenity to accept the things I cannot change….

… the courage to change the things I can, and the wisdom to know the difference.”  Reinhold Niebuhr.  I don’t think that the eminent American theologian, ethicist and public intellectual was possibly contemplating the whims of a capricious tenant when he said this; but I have on occasion recently had to find the mental fortitude not to either a. allow my blood pressure to ricochet off the scale or b. put myself in the frame for an attempted murder charge as I bash someone over the head with a bundle containing the latest figures from Rightmove, a Section 21 notice, an EPC and a FENSA certificate (there’s a prize if you can identify the acronym).   For whatever reason, tenants do, having just moved into a rented property, (that they have viewed seventeen times; with mum/partner/aunt/nail technician/probation officer to name just a few), decide that they can’t/won’t live there and they want to move now (or yesterday, if it could be arranged).  All parties have signed a six month contract in, “upmost good faith”, but that has absolutely no relevance or import in the mind or thought process of the tenant.  Okey dokey, the landlord/agent says through gritted teeth; here’s what we will do.

Option 1.  Nothing.  As a tenant, the individual has signed an agreement for 6 months and that is what they will pay for.  Whether they choose to actually live there is wholly irrelevant as long as the money keeps coming in.  This is totally within a landlord’s legal rights. Nasty landlord.

Option 2. The landlord states that they will put the property back on the rental market and as soon as a new tenant is found, the current tenant will be released from the contract.  Nice landlord.

Option 3.  The landlords states that they will take one month’s notice from the day the tenant moved in (all of a day ago).  Because the landlord has turned away other tenants and has incurred expenses, they do not wish to be out of pocket if they release the tenant from the contract straight away.  Again, nice landlord.

As an agent who has heard all manner of reasons as to why a tenant cannot possible stay in a chosen location one minute longer, “Oh, you don’t like the tree? What that f+&^ off big thing that was standing there on all the occasions that you came to view the house…?”, I always tell tenants that they are not in a position to negotiate.  It rests wholly with the benign and accommodating nature of the landlord/agent.  And if the latter has just had his car pinched, Wales got hammered in the Six Nations or his wife has been withholding all favours because he forgot her birthday, then unlucky, learn to live with the tree.  As always, the advice that I offer before any contract is proffered, is to make sure that it is the property that you really, really want before you sign the tenancy agreement.  After all, if you had just bought the property, would you stomp indignantly back to the Halifax and say that you don’t like it, can we cancel the mortgage?

Speaking of change, my mate Mark (Carney), head honcho at The Bank of England, this morning stated that The BOE was powerless to stop the soaring prices of the prime property market in London.  Firstly, note the use of the word, “prime”.  This is the market that only the uber wealthy can afford and the majority of those wielding the chequebook are foreign investors who have the cash ready, burning a hole in their Dior.  As Mr Carney said on the BBC’s Andrew Marr show, “We as the central bank can’t influence that.  We change underwriting standards – it doesn’t matter. there’s not a mortgage” [sic]  A point that many of the more wild-eyed commentators forget to acknowledge; Mr Niebuhr obviously don’t feature on their bedtime reading list. 

The demand for housing, a kichen that isn’t flooded and a man with a good pair of legs…

It is on occasion difficult not to roll a jaundiced eye at the selective editing and manner in which events are presented to us, the great unwashed, general public.  Last Thursday saw the announcement, with much feverish emotion , that UK house prices showed their biggest rise in three months in January 2014.  The data supplied by the Halifax (part of Lloyds Banking Group – that bastion of business efficiency – as experienced by all those who had their debit cards declined a just over a week ago), produced data demonstrating that house prices in the three months to January were 7.3% higher than a year earlier, a slightly slower rate of increase than December’s 7.5% but still close to November’s six-year high of 7.7%. “The Strong Halifax data will fuel concern that a house price bubble is developing” [sic], said Howard Archer, chief UK economist at IHS Global Insight (no, me neither).  Mr Archer also commented that the concern over the strength of house price rises has been primarily focused in London, but that data from a number of recent surveys shows, “that the strength in house prices is becoming more widespread” [sic].  If ever there was an instance of making a comment that means something, but at the same time means nothing, this was it.  Hedging one’s bets and giving the most general view possible spring to mind.  Without a doubt, there is more activity in the housing market, but it is the same percentage driven outpourings that when drilled down to establish the actual facts, establish that whilst London careers away on its own supersonic trajectory (a huge amount of it funded by foreign buyers), the rest of the country is improving, but at a steadier, and crucially, healthier rate.

The hysteria over an impending housing crisis was further fortified by headlines vociferating that the Chancellor of the Exchequer, no less, “has admitted that UK housing supply will struggle to keep up with demand for the next decade..” [sic] Financial Times February 5 2014.  Before I go any further, may I just point out  what I deem to be a housing crisis.  Take a look at the poor beleaguered souls in Somerset who have been cut off from the rest of the civilised world for weeks.  These people are in the midst of a crisis with no foreseeable end to their woes; not least because as a result of the pseudo-biblical,  ‘natural’ (aided and abetted by the Environment Agency), disaster that has befallen them, the value of their homes has plummeted on a par with the rising levels of the flood water.  Anyway, back to George.  What he actually said when giving evidence to the House of Lords Economic Affairs Select Committee, was that the Office for Budget Responsibility forecast a rise in house prices but with far less gusto than my counterparts in other parts of the country i.e. local estate agents, referred to by Tim Harford in the Financial Times, as “private sector forecasters”.  Of course, this  title can be awarded to many; your mate down the pub, his mother, his pet dog, his mother’s pet dog…   Mr Osborne did predict a continued shortfall of supply and commentators immediately pounced upon this as a certainty that house prices can only go up and that this is intrinsically linked to low interest rates. According to the experts, low interest rates are encouraging people to spend and high interest rates will put the kibosh on this.  Trust me, when the country has ‘confidence’ and lots of overtime, people don’t give a f&%$ about interest rates.  Would anyone care to join me in remembering how many Mercs and BMW’s were parked on people’s driveways during the house price boom when interest rates were at high single figures and going northwards?

Last week did raise many questions on a number of issues.  I have just a couple more to add to the list for the next edition of Question Time.  Tell me Ms Weng, acknowledging your admiration of, butts, legs and tall men with piercing blue eyes, what first attracted you to the billionaire, not-so-tall, bespectacled Rupert Murdoch? And Tone, what could the Lucy Liu-lookalike Ms Weng offer you compared to the not so Lucy Liu-like Cherie?

 

 

Year of the Horse…

The lunar year has begun and 2014 is the Chinese Year of the Horse.  The horse is part of the 12 year cycle that makes up the Chinese zodiac (as well as the 3.40 median auction stakes over 6f at Wolverhampton).  These interact with the five elements; wood, metal, fire, water and earth.  To give it its full title, 2014 is the year of the wood horse, replacing 2013’s water snake.  Those who know about such things foresee 2014 as being a ‘fast’ year, with astrologers seeing wood as providing fuel for the energetic horse sign. If one should try hard enough there is a cheap joke in there somewhere about supermarket ‘beef’ burgers on the barbeque; but that would be very 2013.  Far eastern philosophy and astrology aside, 2014 does retain some of the characteristics of 2013, (and all years preceding); namely being the year of the chancer and make a quick buck merchant.  This was perfectly exemplified by the experiences of a new vendor who last week asked several questions on the much misinformed and misguided subject of EPC’s. Energy Performance Certificates (EPC’s) are the last remaining vestige of the ill-conceived Home Information Packs (Hips) that were introduced in 2007 and then dumped in 2010 – not a moment too soon may I add.  The aforementioned gentleman who has chosen Cheshire and Co to market and hopefully sell his property had been told by another agent that as he was putting his house on the market for a second time within a two year period, he would require a new EPC and of course the said agent would be more than happy to organise the necessary EPC assessor.  The cost of this would be added to the vendor’s fee and would be in the region of £150.  To hit the repeat button on last week’s blog, may I just say, what a load of bollocks.  For the purposes of elucidation, the following is factually correct as regards EPC’s:

  •  EPC ‘S are needed whenever a property is bought, sold or rented.
  •  There are some exceptions, e.g. places of worship but a ‘normal’ domestic property requires one.
  •  An EPC show the energy efficiency and the environmental impact of the property.
  •  An EPC is valid for ten years and can be used time and again within this period.
  •  Every EPC is given a unique reference number that can then be found on the EPC register.
  •  An EPC will show the top actions that can betaken to save money/make the property more efficient, plus a recommendations report on the said suggested improvements.
  •  Neither the vendor or the landlord are in any way obliged to carry out these works.
  •  If an EPC isn’t available, a landlord must instruct an EPC assessor and this must be done within 7 days (although this can be extended up to 28 days) of the date the property was first put on the market.
  •  A copy must be made available to every prospective tenant and a copy must be given to a tenant before he/she signs the tenancy agreement.

An EPC is a necessity and like many necessities of life, a complete waste of time and ink.  But you have to have one.  The grading of a property is on a scale of A-G with most properties coming in at about a D or E (rather like my O-level results). This is reflected in a pretty chart that is coloured red, yellow and green.  Anyone who has bought a fridge or a washing machine in recent years will have seen the traffic light coloured stickers on the said appliance.  Has anyone actually ever read and understood what the pretty chart means? Probably not.  Has a poor grading ever stopped you buying the fridge?  Thought so.   Does the fact that one brand of fridge is more energy efficient than another but does not match your kitchen/your wife hates it make you more likely to buy it?  I guessed as much.

Any professional agent should be able to recommend any number of domestic energy assessors to provide you with an EPC and this should not cost three figures. 

Finally, there was an example this week in politics of  how changing the aesthetics of something does not dramatically increase its value.  Danny Alexander, MP for Inverness, Nairn, Badenoch and Strathspey and Chief Secretary to the Treasury is apparently being groomed to make a bid for the leadership of his party.  Success could in turn lead to his competing for the hottest seat of them all.  In an effort to make him more appealing to the electorate he is increasingly being seen without his trademark Nana Mouskouri horn-rimmed glasses and is instead sporting rather trendy contact lenses.  How exactly does this make him better qualified to lead either his party or – god forbid – the country? Just as a two bedroom mid-link with no off-road parking will always be limited to a certain price bracket because of what it hasn’t got, (despite it having a £30,000 bathroom and a bespoke kitchen with real Italian marble), a ginger rodent from the I’m not really sure party will always be limited in his appeal to the voting public, facial furniture or not.