Real estate agents feel the pinch so drive a hard bargain

Real estate agents feeling the pinch of the property downturn still need to meet their sales quotas; so driving a hard bargain could be the way to a good investment.

And to make sure any bargain isn't hit by fluctuating currencies fix the exchange rate during the transaction, currency specialists are advising.

Although the credit crunch and the resulting economic slowdown is having a negative effect and creating jitters, the same factors are also having a negative effect on property sellers. Currency specialists HiFX believe that means real estate agents probably have some good deals. 'Buyers should remember that a drop in demand will mean vendors are also feeling the pinch,' said Mark Bodega, HiFX director.

He said property investors can protect themselves being affected by any market fluctuations in between offering and completing by getting a forward contract to fix the exchange rate and guarantee the final cost of their purchase. This means buyers can purchase currency at a fixed rate and pay for it when they complete the transaction.

'We always remind clients that they'd never agree to buy a property in the UK without knowing the final cost,' explained Bodega. 'If you agree to buy an overseas property without fixing the exchange rate at the start, that's exactly the gamble you're taking'.

In the UK the National Association of Estate Agents has said the number of buyers on estate agents books has slumped. Others suggest that of the 12,000 agents in the UK, 4,000 will close by next year.

One high profile closure this week is Edinburgh-based Stewart Saunders, one of Scotland's leading estate agents. The company blamed a dramatic slowdown in the housing market for its downfall.

Formed in 1976 and based in Frederick Street in the centre of Edinburgh, Stewart Saunders had become a leading player in the estate agency sector with a substantial portfolio of clients in the east of Scotland.

The slump is also affecting agents in Spain where 3,000 are expected to go out of business in the province of Malaga alone as a result of the current economic climate.

According to Eduardo Molet, president of Spain's network of real estate experts (REI), 30% of agents will close this year, and the survivors will need to adapt their marketing to the new situation.