Estate agent comission
Discussion
Why do estate agents need to work on a percentage rather than an agreed fee?
It takes no more effort or expense to sell a house for £200k than it does for one at £100k. If at 1% agents can cover their fees and make a profit, then anything over that is just profiteering
Let's say your asking price is £320,000.
If yer agent is on 1% and has got a got a sale at £280,000 and himself a guaranteed £2800 , is he likely to advise you to hang out for the asking price? I think not!.
He's got £2800 in the bank. Is it worth the expense of perhaps another months advertising fees and the inconvenience and expense of showing another dozen punters round your gaff in the hope of getting himself another £400(less expenses). I think not. It's the law of diminishing returns. He'll advise you to take £280,000. £400 (less further expenses) isn't a lot to him - but £40k is a hell of a lot to most of us.
It's a Boxster or a Tuscan or a whole lot of other things automotive!
It takes no more effort or expense to sell a house for £200k than it does for one at £100k. If at 1% agents can cover their fees and make a profit, then anything over that is just profiteering
Let's say your asking price is £320,000.
If yer agent is on 1% and has got a got a sale at £280,000 and himself a guaranteed £2800 , is he likely to advise you to hang out for the asking price? I think not!.
He's got £2800 in the bank. Is it worth the expense of perhaps another months advertising fees and the inconvenience and expense of showing another dozen punters round your gaff in the hope of getting himself another £400(less expenses). I think not. It's the law of diminishing returns. He'll advise you to take £280,000. £400 (less further expenses) isn't a lot to him - but £40k is a hell of a lot to most of us.
It's a Boxster or a Tuscan or a whole lot of other things automotive!
sparkythecat said:To ensure they get the best price for your house, if they can sell it for more money they get more from their commission. If it where fixed they could just not bother and sell the house as cheaply as they could still gaining the same commission.
Why do estate agents need to work on a percentage rather than an agreed fee?
been in this situation last year:
its worth demanding 'accompanied' viewings. There are people who actually enjoy just nosing around others houses and im sure the agents know who these people are. Accompanied viewings go some way to 'stop' these timewasters, as you can be sure the agent cant be bothered with these people either!
I laid out a set price i was willing to pay, not an agreedd% i think it helps if you offer the agent a set £ '000 (in the end it worked out @ approx. 1.3% multi agency, adv. on rightmove etc)
its worth demanding 'accompanied' viewings. There are people who actually enjoy just nosing around others houses and im sure the agents know who these people are. Accompanied viewings go some way to 'stop' these timewasters, as you can be sure the agent cant be bothered with these people either!
I laid out a set price i was willing to pay, not an agreedd% i think it helps if you offer the agent a set £ '000 (in the end it worked out @ approx. 1.3% multi agency, adv. on rightmove etc)
stumartin said:
Make sure whoever you go with lists on the internet sites like Rightmove etc.
...and is also listed with the right industry bodies, NAEA for example. It won't protect you from dealing with arseholes, but it might get you some comeback if you do.
That will give you no protection and should not instill confidence. The Naea is a trade body much like the Federation of Master Builders, you should only use an agent who is a member of the Ombudsman for Estate Agents scheme. If you pay 1%, don't expect a professional service expect a 1% service, if you want to fix a fee most reputable agents will negotiate a fixed fee with you. Do not go to the agent who gives you the highest valuation and lowest fee, select the agent who can provide evidence to support his opinion of the price, quotes a fee of arround 2% for a sole agency and is prepared to justify his charges. Do not use an agent who drives a Mini or a 3 seiries BMW. If you do all that, the chances are, you will have chosen an agent who will provide a service which will not result on you being on here in two months time moaning about Estate Agents
You can usually get agents to offer a lower rate if they have the Property exclusively. Problem is they do not have such an incentive to market it properly.
I did a deal at 1.3% + VAT for the top three agents in my area. I really don't think you should ever have to pay more than 1.5-2.0% and only that, if the property is very cheap and in an undesireable area.
I did a deal at 1.3% + VAT for the top three agents in my area. I really don't think you should ever have to pay more than 1.5-2.0% and only that, if the property is very cheap and in an undesireable area.
Bat21 said:
...and is also listed with the right industry bodies, NAEA for example. It won't protect you from dealing with arseholes, but it might get you some comeback if you do.
That will give you no protection and should not instill confidence. The Naea is a trade body much like the Federation of Master Builders, you should only use an agent who is a member of the Ombudsman for Estate Agents scheme. If you pay 1%, don't expect a professional service expect a 1% service, ...do not use an agent who drives a Mini or a 3 seiries BMW. If you do all that, the chances are, you will have chosen an agent who will provide a service which will not result on you being on here in two months time moaning about Estate Agents
Well, I did say it wouldn't protect you. As with anything, confidence comes from having built up your own knowledge of the area in which you are dealing rather than any recommendation from a body / anybody you've never heard of. Many of the complaints about estate agents result in part from ignorance on the part of the complainant, often coupled with genuinely shoddy practice on the part of the agent. What I was suggesting was that it would be a good sign if an agency had taken the time to register with various bodies, and comply with their codes of practice.
It really doesn't matter what car they drive so long as it doesn't have f***ons down the side
sparkythecat said:
Why do estate agents need to work on a percentage rather than an agreed fee?
they do at our lot. and we're the largest independent in europe so I imagine we're not alone
sparkythecat said:
It takes no more effort or expense to sell a house for £200k than it does for one at £100k.
true...
sparkythecat said:
If at 1% agents can cover their fees and make a profit, then anything over that is just profiteering
profiteering or maximising business opportunity?
sparkythecat said:
Let's say your asking price is £320,000.
If yer agent is on 1% and has got a got a sale at £280,000 and himself a guaranteed £2800 , is he likely to advise you to hang out for the asking price? I think not!.
He's got £2800 in the bank. Is it worth the expense of perhaps another months advertising fees and the inconvenience and expense of showing another dozen punters round your gaff in the hope of getting himself another £400(less expenses). I think not. It's the law of diminishing returns. He'll advise you to take £280,000. £400 (less further expenses) isn't a lot to him - but £40k is a hell of a lot to most of us.
It's a Boxster or a Tuscan or a whole lot of other things automotive!
see estate agents act 1979...there is a legal duty to obtain the best possible price for the vendor, and £400 extra commission is not something you'll see many EA managers turning their noses up at!
Bat21 said:
If you pay 1%, don't expect a professional service expect a 1% service, if you want to fix a fee most reputable agents will negotiate a fixed fee with you. Do not go to the agent who gives you the highest valuation and lowest fee, select the agent who can provide evidence to support his opinion of the price, quotes a fee of arround 2% for a sole agency and is prepared to justify his charges. Do not use an agent who drives a Mini or a 3 seiries BMW. If you do all that, the chances are, you will have chosen an agent who will provide a service which will not result on you being on here in two months time moaning about Estate Agents
absolutely. see beyond the price. there are agents in my area who charge as little as 1.25% but my chaps charge 2.25% average and we're damn proud of our reputation for being the best and providing quality professionalism and service...and not being arses
oh and the junior negs get mini coopers and the senior negs get 320 beemers so that analogy doesn't work here! it's particularly sweet when I think how jealous the competitors are because they get offered corsa 1.0's
briano said:
We charge 5% + VAT - in Cyprus, but unlike UK Agents we do not make money on financial 'products' -mortgages, life assurance etc
Lord Briano
used to be like that in portugal too. I thought: great! until I realised how few deals they turnover
then I thought: better high turnover and reasonable yield than very low turnover and great yield 
minimax said:
sparkythecat said:
Let's say your asking price is £320,000.
If yer agent is on 1% and has got a got a sale at £280,000 and himself a guaranteed £2800 , is he likely to advise you to hang out for the asking price? I think not!.
He's got £2800 in the bank. Is it worth the expense of perhaps another months advertising fees and the inconvenience and expense of showing another dozen punters round your gaff in the hope of getting himself another £400(less expenses). I think not. It's the law of diminishing returns. He'll advise you to take £280,000. £400 (less further expenses) isn't a lot to him - but £40k is a hell of a lot to most of us.
It's a Boxster or a Tuscan or a whole lot of other things automotive!
see estate agents act 1979...there is a legal duty to obtain the best possible price for the vendor, and £400 extra commission is not something you'll see many EA managers turning their noses up at!
But you see minimax at that particular moment in time, in the absence of any further offers, he has got you the best possible asking price.
I can hear it now," I wouldn't advise holding out for any more sir, there's been a shift in the market in this area. This is a cash buyer, there's no chain you could be stuck for months. There's not much call for that sort of property now, it's a niche market property etc etc etc "
What's the point of him putting more resources (ad fees and wages) into chasing that extra £400 rather than freeing up his staff time to sell more similar properties and more chances of £2800 ?
all right, fair enough I'm guessing you may have first hand experience of this
the thing is, it might actually be a falling/slow market or the house may have been overpriced, or the vendor may have insisted on an artificially high marketing price in the first place, or that type of property is not fashionable at the moment or lots of genuine reasons. the point about there being a responsibility to achieve the best price means that the estate agent will usually keep any silly offers like the one you described on file until such time as the agency agreement has expired and use them as examples as to why the price should really be reduced - if something's not selling then it's not priced right in most situations (I accept marketing plays it's part in houses but most people are switched on enough to actively seek out good properties or ones they're interested in rather than have to be made aware of them through advertising)
don't forget that there are codes of conduct and usually company codes of conduct they follow as well
the thing is, it might actually be a falling/slow market or the house may have been overpriced, or the vendor may have insisted on an artificially high marketing price in the first place, or that type of property is not fashionable at the moment or lots of genuine reasons. the point about there being a responsibility to achieve the best price means that the estate agent will usually keep any silly offers like the one you described on file until such time as the agency agreement has expired and use them as examples as to why the price should really be reduced - if something's not selling then it's not priced right in most situations (I accept marketing plays it's part in houses but most people are switched on enough to actively seek out good properties or ones they're interested in rather than have to be made aware of them through advertising)
don't forget that there are codes of conduct and usually company codes of conduct they follow as well
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