Robert Sayles: The property agent - friend or foe?

After much soul searching my wife and I recently came to a momentous decision; the time has come to move on.

It wasn't an easy decision to reach; turning our back on a pub that represents five years of our life. During that time it has become much more to us than just a pub, it is 'our' pub.

We have many wonderful memories to look back on, memories that we will always treasure. Good times spent in the company of good people.

That said, the downturn has hit our business hard. In truth its nostrils are barely protruding above the waterline at the moment. With little sign of any imminent improvement, we concluded the time was right to put the property on the market.

So, last week I rang a property agent, informing him we wished to sell. He promised he'd pop in the following day.

He arrived early; I took him downstairs to the office for a chat.

"So Mr Sayles, you want to sell the business. Do you mind if I ask why?"

"Well like everybody else, we're feeling the squeeze. People are reluctant to spend; when they do they invariably go to the Wetherspoon's pub two hundred yards up the road. We can't compete with that."

"On top of that the majority of shops in this part of town have closed down and relocated to the Bull Ring."

"What's that?" the agent asked.

"A huge indoor shopping centre in the city centre," I explained. "It opened in 2007 and it's taken all the shoppers. This side of the city is now pretty much a ghost town."

"And of course we don't have a viable smoking solution. Need I go on?"

"No. I get the picture. What sort of agreement are you on?"

"We're four years into a ten year lease."

"OK. I need some information from you. Firstly, we need a reason why you're leaving."

"But I've just told you, haven't I?"

"Yes I know you have, but we can't put that out there, can we? If we do, we'll never sell your pub. We need something else. Can't we say you're retiring?"

"But I'm only forty three; if prospective buyers see me don't you think they'll suspect we're trying it on?"

"Yeah...perhaps you're right" he said. "What about ill health?"

"I'm as fit as a fiddle."

"OK. Leave that with me. We'll think of something. What about barrelage?"

"It's dropped every year since 2007 and it's still falling. This is a working class pub; the smoking ban and the recession have hit us hard."

"OK. What about before that?"

"Well, I recall one of my regulars once saying that this was one of the busiest pubs in town twenty years ago."

The agent began nodding. "Good" he said, "we can use that."

"How is that relevant?" I enquired, somewhat perplexed.

"Don't worry; just leave it to me. Now then; what about turnover?"

"Not looking too good" I replied.

"Do you have accounts?"

"Of course, but I can't show them to anybody. If I did, nobody would touch the pub with a barge pole. The numbers just don't stack up at the moment."

"No problem, Mr Sayles. We don't need to show accounts, potential and location is what we're selling here, that's what we have to promote."

"OK" I replied somewhat dubiously.

"Do both you and your wife work in the pub?"

"Err..no; it's basically my wife's business, I just help out from time to time."

"Staff?"

"Three, all part time."

"It's looking good Mr Sayles," the agent replied enthusiastically.

"Is it?" I replied, genuinely confused.

"Oh yes. Now then, do you do food?"

"No. The kitchen was condemned years ago. It would cost a small fortune to resurrect it."

The agent sat down and began scribbling notes.

"What about your fees?" I asked.

"We take a percentage of the premium" he replied. "We work on a no sale no fee basis."

"That sounds very reasonable" I said. "So how do you make your money? The reason I ask is because I've been looking at the sites; the tied leasehold market looks completely dead, nothing's moving."

"Non refundable deposits Mr Sayles, non refundable deposits."

"I'm sorry, I don't understand."

"Well let's just say a buyer expresses an interest in a pub. Once they decide to proceed we ask them for a deposit; if the deal falls through, and you'd be surprised how many do, we get to keep it."

"Do you know we actually make more money NOT selling pubs than we do actually selling them, can you believe that?"

"That's a good scam, err.... I mean scheme I replied."

"It basically means we don't have to ask you for a fee up front. If the sale goes through then fine, if it doesn't we still make money. Everyone's a winner."

I suspected the person losing their deposit might not entirely concur with this view but I maintained a discreet silence nonetheless.

"Well thanks for your time Mr Sayles. I'll be in touch."

The following week a glossy brochure from the agent arrived through the post. Sure enough our pub was there.

NEW TO THE MARKET​

FANTASTIC CITY CENTRE OPPORTUNITY​

This sale represents a rare and outstanding opportunity for an enthusiastic operator to purchase a prime site in Birmingham city centre, one located close to shops and offices.

Our clients acquired this business in 2005 and have, over time, built it into the highly successful business it is today. It is now firmly established as the 'place to be' in Birmingham.

Our clients have reluctantly decided to sell as they wish to pursue other business interests.

We are led to understand that the business currently trades in the region of £7,500 per week, 100% wet sales.

• Historically renowned as a high barrelage pub.

• Fantastic opportunity to introduce a food offering.

• Great potential to further develop the business.

We are confident that by maximising the potential of this outlet through the introduction of a food offering and extending the opening hours, turnover could rise to as much as £500,000 per annum.

It would be reasonable to expect net profits of at least 20% which would provide an excellent return on your investment.

It is also worth remembering that the owner currently runs the business alone. We estimate that a traditional couple would reduce the wage bill by as much as £15,000 per annum!! Think of all that extra profit!!!

This is undoubtedly an opportunity just waiting to happen, the SKY IS QUITE LITERALLY THE LIMIT ON THIS ONE!!!

Call us now to avoid disappointment. This property has been priced to sell and is an absolute bargain. You'd be silly to miss out!!!

Price: £95,000

Our financial experts are on standby. Give them a call today and make your dreams come true.

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On a separate note I have just renewed my energy contract (electricity) for another year. My supplier offered me the following terms:

Day Rate: 8.62

Night Rate: 8.23

This might be useful to you, then again it may not. The point is if we shared information such as this on a regular basis would it not help to make life so much easier for all of us?