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Estate agents operate on behalf of sellers so should be applauded for doing whatever they can - within reason and the law - to get that deal done at the highest possible price.
But are our numerous pricing strategies for homes on sale actually effective?
Currently we have Asking Prices, Guide Prices, Price On Application (POA), Offers In the Region Of (OIRO), and Offers In Excess Of (OIEO). The first is a definitive asking price and the last is a minimum acceptable price, so are clear. But what of the other three?
One estate agent tells me, off the record, that Guide Price is used to placate “uppity sellers” who want more than the agent is willing to recommend, so a compromise is to “add a certain vagueness to keep them happy”. Her words, not mine.
Another agent - and this seems much more thought through - says OIEO creates an “auction mentality.” Buyers are unsure what offer will secure a property, so may be offer more than they otherwise would pay. OIEO also encourages multiple bidders who can, within reason, be played off against each other to get the maximum for the vendor.
Most agents say POA is agreed, against their own instincts, to reflect the wishes of the vendor to keep their finances private. Another - and I suppose one has to credit his candour - says it allows agents to judge the financial veracity of buyers. The figure quoted may vary from interested party to interested party, depending on their circumstances.
So far, so what?
But name another business where the price of an item to be purchased is so vague - if not to those in the business itself, to the customer.
People haggle over prices of new and second hand cars (as they do over house prices) but at least have a transparent unequivocal ‘book price’ when negotiations start. There is no melodramatic ‘secret bidding’ of the kind that the property industry encourages through the (perhaps intentional) vagueness of five different prices.
One way of immediately improving the image of house selling, and all those involved in it, may be just to adopt a single, clear pricing system. Surely it could be Asking Price or Offers In Excess Of - both allow the agent plenty of scope to use her or his skill to get the maximum for the vendor, without arousing any suspicion of opaque pricing.
Is that so hard to accept?
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