Buying
How An Estate Agent's Incentives Shape Your Purchase
The agent showing a buyer round is engaged and paid by the seller, and understanding whose interests the process serves explains most of what happens during a purchase.
Buyers spend more time with the selling agent than with anyone else in a transaction. The agent's obligations run in one direction, and it is not towards the buyer.
The agency relationship is one-sided
An estate agent is instructed by the seller and paid by the seller, usually on completion. Their duty is to achieve the best outcome for that client.
Buyers receive courtesy, information and access, but not advice given in their interest. Anything told to the agent may reasonably be passed to the seller.
Rules on what an agent must disclose to buyers, and how offers must be handled, vary by jurisdiction and change, so the local framework is worth knowing.
Why agents ask about your position
Questions about a buyer's deposit, mortgage arrangements, chain and timescale serve two purposes: filtering serious enquiries, and establishing how much room exists in a negotiation.
A buyer who volunteers a maximum budget has provided the number the negotiation will be conducted against, and it will be remembered.
Being verifiable is a genuine advantage, so being open about funding and chain position is useful. Being open about enthusiasm and ceilings is not.
Commission structures pull in a particular direction
Where the fee is a percentage of the sale price, the agent gains from a higher price but gains far more from a completed sale than from a marginally better one.
That combination means agents often push for a deal to be agreed and to hold together, sometimes urging a seller to accept a lower but more certain offer.
It also means an agent has little incentive to prolong a negotiation over a small sum, which can work in a buyer's favour once an offer is close.
The services offered alongside
Agents frequently refer buyers to mortgage advisers, conveyancers and survey providers, and those referrals may generate a fee for the agent.
A referral is not automatically bad, and an efficient conveyancer benefits everyone in a chain. It is simply not a neutral recommendation.
A buyer told that using an in-house service will strengthen their offer should treat that as information about the agent rather than about the seller's preferences.
Using the relationship well
Agents hold information about the seller's motivation, the length of time on the market, previous failed sales and competing interest, and often share it when asked directly.
They also control access, so being responsive, straightforward and reliable makes a buyer easier to recommend when a seller is choosing between similar offers.
The independent professionals in a purchase are the conveyancer and the surveyor, both engaged by the buyer, and their role is to answer the questions the agent cannot.
Questions readers ask
Does the tenancy end when the property is sold?
Usually not. In most systems the agreement continues on its terms and the buyer becomes the landlord, which is why the paperwork must be checked before exchange.
Can I buy a tenanted house to live in myself?
You can, but you need vacant possession as a contractual term and a realistic timetable, because ending a tenancy takes time and follows a prescribed process.
