Find out more about Alex Goldstein on his website.
‘Due diligence’. It’s one of those phrases that either gets you rolling your eyes or going into forensic detail, depending on your perspective. In essence, it is about doing your homework when you come to buy or sell your home.
In this strange litigious world currently, agents are under increasing scrutiny from the Government and regulatory bodies to ensure that everything they do and their client due diligence, is very much above board. Fair enough and I completely understand why.
However, when it comes to homeowners looking to sell, or indeed those looking to buy, I feel that many are glossing over the critical area of due diligence when appointing their chosen estate agent or buying agent.
Agents are now obligated to research, analyse and critically examine every vendor and buyer. They will ask you to divulge highly sensitive personal details concerning things like your income, your financial health, where your funds have come from, evidence of your property’s chain and many other details. One of the most significant aspects of their work is around Anti-Money Laundering regulations (AML). They have an obligation to make sure people are who they say they are and can prove their funds have come from legitimate sources. They’re not going quite as far as getting your inside leg measurement, but they’re not far off.
So while you, the vendor or buyer, has all this pushed onto you, my question is how many of you put as much effort into researching the background of your chosen agent?
In today’s tougher market, few things are more important than the sector specific experience of your estate or buying agent. It will dictate how well they will handle a situation and instinctively know how to get the best out of it.
You need to find out about their career history – have they got long standing expertise in property or have they hopped across different business sectors? Have they built up their knowledge at the rugged property coalface so that when they advise you when you should sell, or more importantly when not to buy, they can explain exactly why they are giving you that advice? Bottom line, can they prove why you should trust them on such a significant transaction?
Your home is one, if not the most important asset you have and rarely do you spend more money at one given point. At the end of the day, if it all goes wrong and you sell or buy incorrectly, then it is you that has to pay the price and live with the consequences.
No more was this true than in a recent example I encountered on my travels across Yorkshire. A buying agent advised their client to part with just shy of £1m for a sizeable family home. Land directly opposite was earmarked as a possible development site. Rather than suggest their client hold off to see what happened, they convinced them to go ahead with the purchase as they had a feeling it would work out alright. The development has now started, is much larger than was first anticipated and it has undoubtedly hit the value of their home.
It turns out that the buying agent had only bought and sold a few homes for their own personal needs. Amazingly they had no property sector experience, yet despite this felt able to advise clients when to part with life-changing amounts of money.
It was a stark reminder to me that it has never been more important to get the right advice and to research your agent’s vital statistics. By researching them online and more importantly through word of mouth recommendations, then you will have the security and peace of mind that you made the right choice. Yes, agents will ask you for everything bar your inside leg measurement, but it’s time to get your own back!