Sale or auction?
Are practice agents really taking into account what’s best for their clients or just trying to get the highest practice price, Alun Rees questions.
‘It has happened again, I thought we were in a sale not an auction, what do you advise?’
A brief email on a Tuesday morning and more hopes dashed.
My clients are looking to buy their first practice.
Overseas graduates both, they have worked hard, saved diligently and want to put down roots somewhere they can raise their two children and serve the dental needs of a population.
They are on the mailing lists of all the sales agents spending many weekends travelling to view practices nationwide.
Anyone who has been down this road knows what an emotional ride it can be; think house hunting turned up to 11.
Three times in six months they have found practices that fit the bill, agreed suitable terms with the owner and jumped through the financial hoops to make offers at the asking price.
Three times they have then received emails from the selling agent inviting ‘best and final offers’, which may include ‘an offer over the asking price and this premium cannot be bank funded’.
I know that an agent’s duty is to get the best price for their client, but shouldn’t they also advise them what a sensible price is and help them find the best purchaser – not just the one who will stick their neck out furthest?
By ignoring the initial valuation, individual purchasers are being encouraged to overextend themselves.
A rise in interest rates may well see owners in negative equity and having to run even faster on the treadmill; even harder work with an NHS contract.
During property booms I grow to hate the phrases, ‘the market will decide’ and ‘it’s worth what someone will pay’, which are frequently delivered by individuals who are not putting their livelihoods on the line and taking a short-term view.
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