My parents recently sold their place in the Netherlands. They talked to several agents about representing them. Agents take a cut of the sales price. Buyers also need to use agents and since housing is scarce in the Netherlands, you pretty much have to rely on agents to find a place.
Where it gets sketchy is when those agents are friends with each other. A lot of deals get made before the property is even listed online. So, what my parents experienced was that they were quoted valuations of their property that had about a 20% bandwidth. 20% is a lot. Nearly 100K euros in this case They went with the highest valuation in the end. It sold within a week slightly above what they asked. This is normal in the Dutch market currently. Prices briefly dipped last year and then continued growing. Even the increased interest of mortgages has so far not changed that.
So, what was going on with those other agents deliberately low balling the price?
The interests of agents are not always aligned with their clients. They are either working for the buyer or seller. And they do each other favors. Like letting each other know when something hot (i.e. priced below market value) comes up for sale or convincing a seller to agree to a lower valuation. So, there are conflicts of interest. And sometimes they just need the money and getting the property sold quickly is worth more to them than having to put in work to sell at a higher price. Another factor is that when property comes back on the market, the same agents are often involved. So, there's a bit of double dipping happening there. Help a client buy cheap, and a few years later help them sell expensive. In a market with ever growing real estate prices that's the game.
Where it gets sketchy is when those agents are friends with each other. A lot of deals get made before the property is even listed online. So, what my parents experienced was that they were quoted valuations of their property that had about a 20% bandwidth. 20% is a lot. Nearly 100K euros in this case They went with the highest valuation in the end. It sold within a week slightly above what they asked. This is normal in the Dutch market currently. Prices briefly dipped last year and then continued growing. Even the increased interest of mortgages has so far not changed that.
So, what was going on with those other agents deliberately low balling the price?
The interests of agents are not always aligned with their clients. They are either working for the buyer or seller. And they do each other favors. Like letting each other know when something hot (i.e. priced below market value) comes up for sale or convincing a seller to agree to a lower valuation. So, there are conflicts of interest. And sometimes they just need the money and getting the property sold quickly is worth more to them than having to put in work to sell at a higher price. Another factor is that when property comes back on the market, the same agents are often involved. So, there's a bit of double dipping happening there. Help a client buy cheap, and a few years later help them sell expensive. In a market with ever growing real estate prices that's the game.