Estate agents are often secretive about what they charge sellers, it has been alleged, whilst there is great variation in the levels of fees that they charge.
A new survey found that only one agent in London – Winkworth – disclosed its fees on its website. About 20% of London agents refused to disclose their fees over the phone or via email.
The survey, by new estate agent comparison website ipostcode, looked at 250 agents’ fees across London and found that it is not necessarily in the most expensive postcodes where agents charge the highest fees.
Some of the highest average commissions are charged in the SE1 (Bermondsey), NW11 (Golders Green) and W6 (Hammersmith) postcodes, although agents in some lower priced areas – E8 (Dalston), N8 (Crouch End) and SE28 (Thamesmead) – offer some of the lowest commission rates.
The majority of the London estate agencies surveyed quoted 1.5% commission, but 15% of agents quoted 1%. The highest commission level quoted was 2.5%.
There were several postcode areas including Islington (N1) and Clerkenwell (EC1) where commission levels spanned the range from 1%-2.5%, which means that on a property priced at the London average of £342,749 (according to latest Land Registry figures), the seller could be paying anything from £4,113 to £10,282 including VAT to sell the same home.
Estate agents’ reputation for being guarded about their fees was borne out by the survey, with one in five of agents refusing to say what their fees were, either on the phone or via email. Only one agency, Winkworth, which has 43 London offices, displayed fees online.
One in four agents said that their fees are negotiable based on either a realistic valuation of the property or depending on the price range of the property. Many agents in the survey stressed that an agency should not be chosen simply on their commission rates but on service, track record and marketing.
The survey also found that estate agent fees in London at an average of 1.7% are more or less in line with the national average of 1.8% – contrary to the perception that London estate agent fees are the highest in the country.
Domenic Versace, co-founder of ipostcode, said:“Agents can be too guarded about how much they charge and many people don’t really know what they should be paying or that some fees are negotiable.
“We want to lift the lid on estate agency fees and make the process more competitive and transparent, encouraging agents to pitch upfront for the business.”
ipostcode is one of several new comparison websites, which says it will change the way property sellers and landlords go about selecting an estate agent and creating more transparency around fees.
The site works by sellers and landlords listing their property for free and agents bidding eBay-style against the clock for the opportunity to sell or let it.
Last week, on our sister site LAT, we carried a story about lack of transparency in letting agent fees, with the idea that agents should display ‘APR’ illustrations on their sites. The link is here:
https://www.lettingagenttoday.co.uk/oldeat_news_features/Agents-should-have-to-display-their-real-APR-charges-says-Walker
www.ipostcode.com
Comments
Mike, I wasn't going to add any more to this but I notice you have left a further comment taking advantage of the fact I put my hands up over my highlighting of your faulty English.
As you readily admit, I didn't stoop to call you names like "filthy capitalist swine" (btw don't assume me to be an anti-capitalist because you would be wrong as I most certainly am not). So please don't be patronising by telling me to "write, leave it for half an hour read again" because it's not as though I used swearing or profanity. Instead I merely called things as I saw them, albeit lowering myself to do so.
You, sir, were using petty statements as some form of gotcha when you said "Incidentally we don’t have punters, we have clients". Now, when I originally used the word "punters" I was merely referring to a figure of speech but that point seemed to have either been missed on you or you understood it all too well and were being pedantic about it. So naturally, when you failed in your attempt to be clever with words (by claiming to be verbose as a positive) I found it delightfully appropriate to edify you.
In your pontificating Mike, you usually deliver matters of opinion but on this occasion you over committed yourself to a fact (in this case the meaning of a word) and hence were caught out because it was easily looked up. If I regret anything it is, as the Americans say, "taking the candy from the baby" because it was too easy to ridicule you for taking pride in being verbose.
Oh and for goodness sake don't tar me with the same brush!! If you want to set yourself apart by wanting to define yourself as "verbose" then must stand alone on that one I'm afraid. By contrast, in my posts I strive to be complete and concise. If my posts end up being long then it will have been because I have been responding to many points and with a level of detail which is relevant but there is always a precision and necessity to those words present. To quote a phrase, "not all words are equal", so please don't lump me in "verbose town" with you merely because of the word count.
Look Mike, I understand that we both give as good as we get and rightfully so but you must be careful because if you can't even use the right words when trying to big yourself up then people might wonder what else (e.g. property related) you get so patently wrong.
I normally shine against a good debating opponent, so here's looking forward to you upping your game and bringing on some good competition! By the way I did respect at least one thing in your last post. I do so with no hint of sarcasm whatsoever when I say I liked your last sentence when you said "We may have different ideas of how to get there, but we are headed in the same direction". I agree.
@Bazza.
Well at least you didn’t call me a filthy capitalist swine LOL.
Of course I would not lower myself to that level; you have revealed here. From your apology you may realised that, so every cloud eh.
I shall now withdraw that Allagents review I’ve written about you [that is a joke, so don’t start].
We all sometimes go too far, or say things in haste we later regret. We are human we make mistakes.
If you wish to taken part seriously in debating our industry, get a grip. Try answering without insulting, it detracts from which ever point you wish to make. Launching personal attacks against another poster means you admit you do not have a valid argument.
If that is your style, then write, leave it for half an hour read again you will see it differently then.
I have just finished drafting a reply to your comments in another thread; I believe it will get your goat up.
I must admit I was disappointed with your post as I believed was discussing these issues with an informed adult, somewhat fiery and just as verbose as me, [your postings are even longer than mine, and you say I waffle!!!] but just as committed as I am to moving our industry forward to face this brave new world. We may have different ideas of how to get there, but we are headed in the same direction.
Bazza;
"Friday you said to me "thanks for selectively quoting the first part of my post" but what do you want me to do? Quote the whole post???
The bit you quoted wasn't the crux of the point I was making. The important bit was the bit after the "But essentially....", the keyword being 'essentially'
Do you get the point about the percentages spreading the risk over the client base?
Take your point about the secrecy you're referring being that in the title - long thread, I was taking your single comment in isolation rather than in context of whole thread.
HN are better able to state their fees because the limited tasks they do are easier to quantify, and they also have zero risk of not getting paid.
Okay Mike, I've looked back on my previous post in hindsight and realised that it was very childish and completely off topic. I just wanted to hold my hands up and say that.
I certainly won't be requiring you stoop down to that level to provide a respond to it.
I do, however, still feel that there are inadequacies in the logic you put forward in your previous posts but I will address those separately at a later time.
Bazza-out!
Mike you really shouldn't make it soooooooo easy for me to prove that you are being waffly!! Here goes.....
You said at 17:13 "I am not being at all waffly, I tend to be verbose, always have been".
My goodness Mike do you even know what the word "verbose" means???????
No, seriously, I invite you to grab your nearest dictionary and look up the word's meaning.
------- In my Oxford dictionary it states ------------------
"VERBOSE"
MEANING: using or containing more words than are necessary
SYNONYMS: rambling, long-winded, Waffly (LOL!), circuitous, prolix
USAGE: "He was a notoriously verbose after-dinner speaker"
------------------------------------------------------------
That's hilarious Mike!!! So let me get this right you're saying you're not waffly but are verbose instead?? BUT THEY'RE THE SAME THING LOL!
If you must insist on trying to act all knowledgeable by using big words then at least know what they mean or else you risk conveying an altogether unintended meaning and be none the wiser for it, LOL!
I rather suspect you thought that verbose meant simply that you use many words to describe your point but that they all remain relevant. I'm sorry for you but that's simply not how the word is defined.
Normally I wouldn't be so childish at calling people out on something like that but you were being so condescending with your high and mighty "I employee people in your position".
So what position would that be then? I would love to know what makes you feel confident that you're above me and employ people in "my" position.
By the way, when you demonstrate that you don't know the precise meaning of the words you use it adds a delicious irony when try to be fussy about words when you say "Incidentally we don’t have punters, we have clients".
Well I'm happy to have helped you out in so much as hopefully you won't describe yourself as being verbose instead of waffly to your clients.
You're welcome!
Friday you said to me "thanks for selectively quoting the first part of my post" but what do you want me to do? Quote the whole post??? If people want to go back to read your previous post to get the context then there is absolutely nothing stopping them (a few taps of the down arrow)
You also say "What's 'secretive' about charging a percentage? It's written in black and white in the contract. The seller sees it and signs off on it". Did you actually read the article above or the title at least which reads "One in five agents 'won't reveal their fees'". That is the secrecy to which I refer. I wasn't stating that all percentage fees are secretive but instead was referring to those percentage fees that aren't disclosed up front (like the ones Mike says he uses).
You say of the housenetwork "They don't just 'quote' a fee before going to the property, they have you signed up and paid the (non-refundable) fee before they visit your home". I didn't know that that but I was only drawing attention to how they openly state their fees at the top of their website rather than hiding it and what you've just said doesn't change that. There appear to be a good few vendors signed up with them who obviously appreciate their open honesty, transparency and low price.
Bazza;
"housenetwork seems to have been quite popular with the punters and they do quote a flat fee BEFORE they go to the property. "
They don't just 'quote' a fee before going to the property, they have you signed up and paid the (non-refundable) fee before they visit your home.
See, this is the point that you missed from the previous quote. HN aren't subject to the same risks. They don't go out to give free valuations. They don't market properties on the basis that they''ll get paid when the property sells, they take the money (or some upfront and some at conclusion for their more expensive pricing plans). They don't spend time with viewers. When someone takes their house off the market from them, they've still been paid. Not the same risks.
Bazza;
" ..... the days of the secretive % fee are numbered.
I tend to agree with Happy Chappy, I feel he has got the balance just right. He would charge an honest fee based on his actual costs and make sure he was making enough profit on top. "
What's 'secretive' about charging a percentage? It's written in black and white in the contract. The seller sees it and signs off on it.
What makes you think that a percentage fee DOESN'T just cover "actual costs and make .... enough profit on top" What's the basis of Happy Chappy's fee structure, once you get beyond this vague and woolly definition?
Bazza; BWAHAHAHAHA!!!!!!!!!!!!
Yeah, thanks for selectively quoting the first part of my post and ignoring the crucial bit - you know, the paragraph I put after "But essentially....."
Bazza,
Thanks for taking time to read my post, think on it and formulate a decent response as opposed to just calling me names.
I am not being at all waffly, I tend to be verbose, always have been. And as for smoke and mirrors, I and a lot of others did think my posting quite clear.
If going to visit a house is common sense, then why ask if I had to do so when you know damned well that for every instruction taken you have to visit. As for lifting data from another agents website, if you are as seasoned as you claim, then you know there are agents who actually do this, it’s not rubbish, it’s damned annoying. Any idea how many vendors give us instruction and then say, it’s with Foxtons the details are on their site you can get them there…….Right, then the only time you find out about that stream running though the basement is on your first viewing.
As for my example, it actually happened because one of my agents, did exactly that, quoted a fixed rate over the phone. The Vendor did record the call; he did contact his solicitor and tried the breach of contract angle. It did not work but it cost me money to get rid of the nutter, the only thing fictitious is the address. This is why we always visit first, when we get a call and someone tries to get us to commit to a fixed price or %, it raises flags, why not invite us round and let us see and agree the fee, are they hiding something about the building, is the property really theirs etc…..
If you are not happy with my answer as to why I price the way I do, then don’t allege it isn’t real, I have given my genuine business reasons why we do not operate a fixed, come one come all price. If you cannot understand or disagree with it that’s fine, you may do business differently, I would not call your reasons unreal, maybe unreasoned, maybe ill thought out [in my opinion] but it’s your business decision and it works for you, so rock on.
I agree the days of individual, [not secret that is another scourge on our industry, it make us sound somewhat sinister] pricings are over; I also know why this has gathered momentum recently and where it is leading. It will spell the demise of many independent agencies as they cannot compete with the low fixed price some of the megaportal planned online agencies will be quoting.
I have a plan for then, we will still be operational, will you be able to compete?
What puzzles me is your blasé statement that ‘you can quite confidently estimate the costs anywhere in the country without going there, and your claim that the costs are very similar regardless of the property. This may be true of just the properties you know of on your patch, but it is farcical to claim this nationwide.
Again you are disingenuous when you accuse me of tangenting my role in my company into the conversation, when you have questioned my local knowledge & customer base, and I have honestly answered we are a global corporation and my customer base is worldwide that is why I personally do not have the local knowledge you claim to have, and explained that I employee people in your position who do have the local knowledge required.
No Employer can have the job skills to carry out every task in his company, that is why when you need a safety cert you call in the gas engineer, when you need a consumer unit changing, you call in an electrician, car need a new front end, get down the body shop, audit needed, contracts need drafting, shoes need mending, suit needs pressing, office boy needs an NVQ in admin, call in the specialists….. Does that make you a Jack of all, if so please explain how.
Incidentally we don’t have punters, we have clients.
5K extra? BWAHAHAHAHA!!!!!!!!!!!!
"The £750k property is expected to be bigger, so
A longer valuation appointment
A longer photo session, floorplanning, description, etc
Longer to load it up on the system
Longer viewings
More time generally etc. "
Mike you are being a little sneaky with the waffly answers aren't you. You know a bit of magic show misdirection Paul Daniels stylee.
Because you know very well it's common sense that you have to go to the property to take photos so don't try to come out with all this lifting from another agent's website rubbish. Please don't use that to wiggle yourself out of giving the real answer to what would stop you from quoting a standard price before having to go out to the property first. And I'm praying that you do realise you can do that without committing yourself to an instruction. I believe in our lovely EA jargon talk it is also goes by the name of an invitation to treat. This is why your 27 Acacia Ave example is a complete and utter smokescreen because if your fictitious dodgy vendor knew your fee before you visited there would still be nothing at all to say you couldn't refuse the instruction when you discovered the poor state of the property during your valuation.
Also I know that it sounds fancy for you to tangent into the conversation about how you deal all over the world etc etc etc. Well how nice for you but that actually makes you sound more of a jack of all and master of none. If I get an enquiry about any property in the UK I can quite confidently estimate the costs involved with that instruction and do so quickly without going there and be home in time for tea. Why's that you may ask? Well shock horror, the cost is very similar regardless of the property!! Camera - check. Car & petrol - check. Rightmove listing - check. And so on and so on. It is certainly not going to cost £4500 extra (credit to Big Ted for the calculation).
Oh and about how long I've been in this game, long enough to know that the days of the secretive % fee are numbered. Obviously I don't know how much profit they make but that housenetwork.co.uk seems to have been quite popular with the punters and they do quote a flat fee BEFORE they go to the property. Take a look and see, their fee is at the top of every page on their site and surprise surprise they do have a few £million+ properties on Rightmove!
I tend to agree with Happy Chappy, I feel he has got the balance just right. He would charge an honest fee based on his actual costs and make sure he was making enough profit on top. But the point is that this fact would not be wasted on the vendor who would appreciate the transparency rather than scratching his head and asking why the fee is based on the value of his property. I feel I'd know where I stood with you so you'd get my instruction Happy Chappy even it was not the cheapest because I would feel that any extra I paid you would be buying my transparency and a sense of comfort or peace of mind.
Big Ted is my favourite though he says such profound stuff without all the waffle. But the funniest thing is that he has the strongest argument on here and it seems that he can't be beat. The poor soul had to even ask his question twice because nobody was brave enough to answer him with a straight answer and to the point.
Big Ted you managed to cut through all the BS waffle on here with your simple question. For that I salute you sir! LOL
Happy Chappy wrote
"Many Vendors are willing to pay some costs prior to sale. Particularly if it means reducing the total cost. "
How many vendors have you dealt with over the last year?
Many don't have the disposable income or savings to pay hardly anything upfront, and will jump at the chance of deferring payment of any upfront fees, even if it means paying more in the long run (since they'll be able to afford it once the house sells)
Big Ted; you asked;
What extra work is involved, or expense incurred, to justify the extra £4500 in fees?
Two questions actually:
1. How do you justify this ?
2. How does the £750K vendor justify this ?
====
The £750k property is expected to be bigger, so
A longer valuation appointment
A longer photo session, floorplanning, description, etc
Longer to load it up on the system
Longer viewings
More time generally etc.
But essentially, it's not the work, it's not the expenses on that particular property.
It's offsetting the losses on the lesser properties, and risk-spreading across the whole client base. It's like insurance. Assuming you to be an honest, upstanding mature person who has never claimed on either car or home insurance, you may well say "Why should my premiums go up because there's been more burglaries at the other end of the country? Why should I pay more because the young drivers have accidents?"
Because of the insurance co. spreading the risk across their client base. Similar situation here.
Past my bedtime. Toodle Pip.
@ Legal Eagle
No don't join them. Someone always will have to be bottom, and when they are bottom they will leave.
This is signing up to Russian roulette.
You all don't like RM having you over a barrel, these chuffers will have your b411$ in a vice and will be swinging a big hammer at the same time.
Don't give them the chance.
@ libel case waiting to happen
I think after Wooster & stocks slating here, it would take a brave agent to that!
Imagine the publicity and headlines " corporate estate agents try to shut up customer review site because it's getting bad reviews "
It the very least every decent agent would be taking those news clips out to every valuation.
As the old saying goes, if you can't beat them, join them!
OMG
No idea, maybe Rumour had the right idea, Allagents are planning this, and ipostcode have already built the platform.
Allagents are already advising the public not to use EAs not registered with them.
It does seem like the next step.
Can you imagine if they listed all EAs and published false rates for everyone, What do you do when a vendor calls and says, I have seen you listed at a fixed 1% rate I have a £750,000 property I would like you to sell for me. Do you grab the business [and hopefully money], Thus tying yourself to that rate.
Or do you politely tell them your rate is 1.75% and you are sticking to it, then set the hounds on Allagents?
@Mike
Just seen it, what earth are they up to?
They have also got tabs for "staff members" as well!
Do you know anymore about it?
A lot of posts, still no answer.
What extra W O R K is involved ,or expense incurred, to justify the extra £4500 in fees?
Two questions actually:
1. How do you justify this ?
2. How does the £750K vendor justify this ?
Colleagues
Are you aware of this?
Compare Agent Fees - This Section Is In Development
Your search has taken you to a section of the allAgents website that is currently in development. This exciting new feature will be available soon. If you have any questions or would like to find out more about what is going to appear here, please contact us using one of the options below.
I lifted as is from the Allagents website.
Remember these guys are already recommending to the public, to only use EAs registered with them, with the inference that those who don't might be dodgy!
Happy Chappy also wrote, in response to me asking (how will the EA pay general expenses (vehicles, premises, rates, utilities)
"It is the responsibility of the EA to keep these costs to minimum these expenses may add no value to the Vendor. "
...but they still have to be paid. If the seller can duck out of them on the basis they're not directly chargeable to him, then where's the money going to come from to pay them?
Happy Chappy wrote
"This is another assumption. Many Vendors are willing to pay some costs prior to sale. Particularly if it means reducing the total cost. "
Of course I've made assumptions in the examples I've used. In order to discuss percentage vs. flat fee, I have to assume a certain level of fees as the starting point for the dicussion. Where else would you start?
Yes, sometimes vendors pay an amount upfront, but typically round my way, that's to cover fixed costs relating to the particular sale. The sign guy will want to be paid, regardless of whether the property sells or not. Same with the printers who do the schedules and window cards. If this wasn't billed upfront the EA would be out of pocket if/when the owner took the house off the market, 8 weeks or 12 weeks down the line. If you were another client in this scenario, would you be happy to pay for a share of these costs? No, you wouldn't.
Happy;
No look at my example, the customer pays from the time the maintenance operative arrives at the job until he finishes, they have time sheets. We do not pay travelling time but they do have a modest fuel allowance.
Now about charging hourly [for sales], from accepting the call to handing over the keys: what a marvelous idea one used by solicitors for years, I wonder if I too can learn to take an hour to write a letter, charge £22 for every fax I send.....I am drooling already.
It's not the time you take its what it's cost you to sell. Set your minimum profit margins and stick to them.
Machiavelli had one sound piece of advice in The Prince. 'Pay your men with someone else's money'.
If your projected costs are low, you can pass these savings on to the vendor and still achieve your profit margin. Do not sacrifice your profits, it is a false economy and will become a habit which will bring you down.
We are all businessmen running for profit businesses.
The other side is do not get greedy, this is a double edged sword which will turn against and eventually destroy you [can get you an £8m fine and you have to sell your business].
So be fair to your client and yourself, stick to your guns and give the best service you can.
MIke - never fear - I have no toes on which to tread!
I just didn't want you to suffer the embarrassment of being accused of being me! ;o)
You are correct. 27 Acacia Avenue is 'yer average' British house. And long may it be so, with you and I keeping the memory alive!
Anyway - where have you been up to now? Have you been waiting in the wings, ready to appear just in time to vanquish the Anti-Agent hoardes...?
Not a minute too soon, Sir.
PeeBee,
Not meaning to tread on any toes...
27 Acicia ave is just part of the national psyche like annoyed from Tunbridge wells, it just automatically comes to mind,I shall remember to quote other examples.
Happy chappy:
To answer your example about doing most of the work yourself.
I would of course adjust my commission to reflect this, the easier the sale, the less work done, the less wages paid, the less expenses incurred, so it costs me less. I pass these savings onto the vendor.
I also broker introductions, where the Vendor & buyer do it all themselves and I take a small introductory fee [ the DIYers love this] and I get something out of people who would normally never touch an EA with a bargepole.
The US system is completely different, highly regulated with a complex commissions system. Basically it's about 6% split between broker, agent and other involved parties, for the sale of a $10,000,000 property we average between $20K to $30K.
Happy: "Thats time whole sales process. Not time spent by the agent selling that particular property or the expeses incurred to do so!"
D'oh! Thought I'd get away with that one...
Okay - more realistic option. You agree to pay me £15 per hour that I work on your property.
THAT INCLUDES:
ALL travelling - time AND costs (Business Class - but I won't drink the coffee...) - including initial appraisal appointment (paid regardless of whether instructed or not); subsequent frequent revisits to discuss your overambitious pricing strategy and take new photos as you have needed to redecorate in the passage of time...; viewings; checking on straightness of board... the list goes on.
ALL preparatory works (and subsequent alterations) for marketing your property including typing of details and loading of internet sites etc (watch out - Rightmove chucks you out more times than not when you click 'Save and Display' so you have to do it ALL again...)
ALL phone calls (like 118118's pricing system of rounding up for directory enquiry calls, each call will need to be charged PER HOUR OR PART THEREOF...)
ALL discussions with potential viewers (by that I mean ANYONE who comes through the door will be treated as a potential buyer - as I SHOULD do on your behalf...) - again charged PER HOUR OR PART THEREOF...
ALL NEGOTIATIONS involved in agreeing a satisfactory sale (including the preparation of statutory notifications and the taking of them to the postbox)
ALL post-agreement of sale works required to ensure that the sale proceeds to satisfactory and swift completion. Includes ALL discussions with Chartered Surveyors wanting comps in the area from the minute that the initial market appraisal is conducted in order to ensure that the figures are as positive as possible to avoid possible downvaluation...
ALL works involved with handling enquiries from potential buyers and nosy neighbours up to and including the point of issuing our Final Invoice.
Plus, shall we agree, a 'set charge' equivalent to the sum of one hour per day to cover overheads.
I mean - you wouldn't want me losing money - would you? ;o)
Mike doesnt start charging from the time he puts the phone down saying he will do the work to the point or invoicing does he?.....or does he? :0)
Sorry by this i meant for changing the taps.
That will teach me to try and mult task...sorry i may be some time replying i have something else to do!
Peebee.....dont get me started on the Airlines :0)
How about we deal with EA's first after all this is the EAT website.....an answer to my question would be nice before countering with your own.
"Let's see - according to some numpties last week 'yer average' property is taking 241 days to sell. That's... erm... 5784 hours"
Thats time whole sales process. Not time spent by the agent selling that particular property or the expeses incurred to do so!
Was the agent working 5784 hours to sell the house - NO
Mike doesnt start charging from the time he puts the phone down saying he will do the work to the point or invoicing does he?.....or does he? :0)
P.s I might be willing to pay you £5784 as a maximum max to sell my property.... it is was worth £10M an is in L.A....p.s I want the potential clients to be shown round by yourself....I can be silly too :0)
Happy...Happy...Happy...
"what if I am willing to do all the viewings myself because i work from home, I am willing to take any offer over 300K as I want a quick sale...and the house is a higly desired area....would you still charge me 1.5%?? If so what is your justification for this?"
Come on, matey! You fly a bit I seem to remember. Okay - go to British Airways and say " I want to fly Business Class - but I don't want any coffee and I won't be using the entertainment... would you still charge me Business Class fare?"
Let me know how you get on. And what was THEIR justification? ;o)
Peebee - I was wondering :0)
Happy Chappy: "Sure so do you charge per hour + expenses to sell a property regardless of property value? If not why not?"
What an absolutely CRACKING idea! Well done, mate!
Let's see - according to some numpties last week 'yer average' property is taking 241 days to sell. That's... erm... 5784 hours.
I'll do it for a quid an hour, per property. That's less than ONE SIXTH of the minimum wage. A bargain, considering my experience, I reckon.
And the good thing is that you know what you are going to pay at the end. £5784. In fact - I will GUARANTEE that amount. Even if it takes another week or so to sell for you. Not a penny more. There - a deal. You like them, don't you!
I also guarantee NOT to handle more than twenty properties on at any one time - so that I can deal with yours at the drop of a hat.
I'll need to have it paid weekly, please - for cashflow purposes... ;o)
Hi again MIke
If someone called from 27 Acacia inviting me to take instruction, I check and see average prices there are £350,000 and properties usually sell within 2 months, I then commit myself by saying OK 1.5% is our fixed rate.
What if I am the owner of said 27Acacia Avenue, you have visited and you are happy to take the instuction....
what if I am willing to do all the viewings myself because i work from home, I am willing to take any offer over 300K as I want a quick sale...and the house is a higly desired area....would you still charge me 1.5%?? If so what is your justification for this?
MIke - "If someone called from 27 Acacia ave inviting me to take instruction..."
Careful, mon ami - that is my 'pet address' on this site (as it is whenever I have talked property in what now spans five decades of working in the industry...).
If it wasn't for the fact that you are (so far...) being nice to folks and that you speak sense, you would have the wolves howling that you and I were one and the same person! ;o)
Hi MIke
"Just as we cannot give an exact quote for selling your property until we see what work it would entail."
Sure so do you charge per hour + expenses to sell a property regardless of property value? If not why not?
MIke -
Unfortunately, your posts are wasted - falling on stony ground with those who care to ignore reality.
Shame, really.
"If the commission from successful sales is the sole income"
This is another assumption. Many Vendors are willing to pay some costs prior to sale. Particularly if it means reducing the total cost.
"how will the EA pay general expenses (vehicles, premises, rates, utilities)",
It is the responsibility of the EA to keep these costs to minimum these expenses may add no value to the Vendor.
"and how will they pay for the work done on sales which get marketed, but don't complete"?...
again this is not the responsibility of the vendor, Intelligent vendors are only willing to pay for the costs incurred in marketing and selling there property alone.
"then the equivalent flat fee works out at being worse for the lower-end householder, and beneficial to the higher-end householder. No"
If you only take a no win no fee approach then this may well be th case....but i am not saying this is the only or best way to appoach fees.
Bazza, just how long have you been in this game, or are you just winding me up?
First you ask if we have to visit every property, then you say all we have to do is take photos measurements etc….
Can you tell me how to do this without visiting; do you just lift the info from another agents web site?
We all know that every house in a street is not the same; every vendor is not the same.
Its not enough just to look on Zoopala, or call around the other agencies to see what prices are being paid, what is paid for no.27 can be far different to no.29 for a host of reasons.
I don’t visit every property, I cannot. I have local staff who do that, they all have backgrounds in construction or the building trade, so know what to look for that may give problems later on [ damp, settlement, radon gas incursion, sealed drains, dodgy DIY…etc] . The commission rates are based on these reports and any other relevant circumstances [think HST].
Some properties will virtually sell themselves, some are in such a state that they are extremely difficult to shift; some are only suitable for investment purchasers or developers. Some vendors are over optimistic and keep refusing good offers until reality kicks in, some vendors are just economical with the truth and everything they say needs verification.
As for my customer base, we deal worldwide. In the UK we buy, sell, rent and invest nationwide, as I buy and sell everywhere I personally do lack the specific local knowledge of agents who are tied to one area, this is what I depend on my local staff for.
If someone called from 27 Acacia ave inviting me to take instruction, I check and see average prices there are £350,000 and properties usually sell within 2 months, I then commit myself by saying OK 1.5% is our fixed rate. Come on round, he says, to photo & Measure. So my guy turns up and sees chummy has remodelled his house during an acid trip, it is impossible to sell in that condition. But I have entered into an agreement, I have told him a fixed rate of 1.5%, I offer him the £100k the wreck is now worth, he tells me to F.off.
I then get a letter from his solicitor accusing me of breach of contract… [he taped the phone conversation] and so a long drawn out argument starts… costing me money every time my legal guys reply, he then crucifies me on online and anywhere else he can vent his bile.
If we had visited first and saw the property then I would have refused his instruction outright without any commitment.
Darren,
Ok so you know I am a telepath
You assume BigTed meant B&Q jobbies, I assume he was using this as an analogy meaning all jobs are the same.
Our maintenance team operate thus :
Cost of materials + 10%
General Labour @ £35 per hour per man, this is from arrival to departure, and we do not charge travelling time. If a job is going to last more than 6 hours we go onto a reduced day rate. We do a discount service for OAPs, disabled & lone parents on benefit. All our guys are tested trained and CRB checked
It does not matter if you live in a mansion in Bishops Avenue Hampstead London, or on a sink estate in the middle of Manchester these rates are fixed.
Thus if a job is difficult, it will take longer and cost more. We quote these rates, but cannot estimate for the whole job in advance until we at least see what it entails. Just as we cannot give an exact quote for selling your property until we see what work it would entail.
Unofficially a pair of Athens kitchen sink taps cost today £15 each, just to remove and replace with no complications, would not require a plumber but a maintenance operative, the job would take under an hour so should cost:
£30 taps
£3 10%
£35 labour
£68 total cost.
Same price whether you live in a mansion or a studio flat.
If I stitch up a mansion owner for a few quid, will he then give me instructions on any of his properties? Of course not because he cannot now trust me, that is bad business. So if one of our chaps is caught overpricing, immediate dismissal.
By 'overheads' I mean a proportion of the total overheads, not absolutely everything being paid for from two sales.....
You said "A smart vendor will only be willing to cover the costs (O/head) involved in selling there property alone not the costs that add no value to them."
If the commission from successful sales is the sole income, and vendors only pay costs directly attributable to their sale, how will the EA pay general expenses (vehicles, premises, rates, utilities), and how will they pay for the work done on sales which get marketed, but don't complete, other than by covering these from successful sale?
Yes, I'm making the assumption that the 1% on those two properties covers costs and brings some income in, for the purposes of the illustration, but that's not really the point - the point is, if you're not happy with percentage fees on a range of property prices, then the equivalent flat fee works out at being worse for the lower-end householder, and beneficial to the higher-end householder. No?
"On the assumption that this income covers the EA's overheads and yields a modest profit,"
Who is making that assumption, but if we are making that assumption does the next sale get processed a a nominal fee as all the overheads have been covered in the first 2 transactions.
A smart vendor will only be willing to cover the costs (O/head) involved in selling there property alone not the costs that add no value to them.
Big Ted;
"A 3 bed semi at £300k and a 5 bed detached at £750k, I was not seeing the extra (working at a 1% fee only) £4,500 work / expenses involved on your behalf. Doh, I missed it. "
So, 1% of 300k = £3000
1% of 750k = £7500
Total = £10,500
On the assumption that this income covers the EA's overheads and yields a modest profit, then in order to charge a flat fee and maintain the same level of income, the flat fee has to be (10500/2) = £5,250, surely?
Doesn't this lead to the 300k owner paying £2,250 more than he did previously? Is this really what you want to happen?
Sorry, my fault. I got it all wrong.
A 3 bed semi at £300k and a 5 bed detached at £750k, I was not seeing the extra (working at a 1% fee only) £4,500
work / expenses involved on your behalf. Doh, I missed it.
Don't be a thicko Mike!!
Big Ted meant a standard B&Q value door / taps and you know it!!
You would charge the mansion owner more wouldn't you???
Yeah you would!!!!
So just out of interest Mike what groundbreaking differences would there be between 2 different properties that mean you couldn't possibly quote a standard price?
You're not landing on the moon - all you're doing is finding out how much other people on the same street paid so that you can use for your valuation then taking some photos and room measurements then going back to the office and writing it up into an advert/listing.
You say that you have a basic idea of the work involved so why can't you just base your price on that. Some properties would require more work and some would need less so it would balance out yes? 3 bed semis are much of a muchness.
But still I'm am still dying to know what features of a property would cause you soooooo much extra work that you couldn't make a decision without going there in person. Surely if someone tells you over the phone that their address is in Windsor and it's a castle you know it's likely to be a bigger job than normal lol!
I don't want to be rude but it sounds to me like you don't know your customer base very well mate if you have to always go there.
Sometimes you have to work more and sometimes you get to work less - that's life!
BigTed
Today we go through the obscure window.
Oversimplification may make a great 'sound byte' but has no relevance to the issue.
What kind of door [size, material, fire door, security , sliding etc...], how much door 'furniture' do you need attached........
What kind of tap [ single, mixer traditional washer, ceramic disc etc...] where is it to be located, will I have to modify the feed pipes.........
Once armed with this info, the Carpenter, plumber can calculate the price for the job.
We all offer some fixed price services, contract preparation & renewals for lettings, referencing, EPCs and other ancillary services. But you cannot operate effectively on a low fixed fee basis for your core business, unless you generate so much business the losses [and there will be] are balanced out by the profitable transactions.
If you need a solicitor, he too will offer some 'fixed fee services'. But for anything else you have to visit for a consultation, he will listen make some suggestions and then, only then will he give you an idea of costs.
Why?
Because how the hell does he know how much work he has to do until he has met his client and examined his case.
The same is true across the service industry, what makes us different in that we have to guarantee our services at a fixed rate, job unseen !
I may have a basic idea what is needed to fulfill an instruction for sale, but until the property is visited, necessary research into the property is carried out, the vendor is met and assessed. How am I to know exactly just how much work I will have to do to get that sale?
What happens when I realise I cannot effectively market that 1 bed mid sink estate ex cannabis factory with an 80 yr lease for the £1100 my 2% fixed fee will bring [sale price £55k]. I turn down the instruction because I am not prepared to work for nothing, or pay to sell a vendors property.
I get accused of mis-advertising to draw in high end clients.
"However, whilst just one decent agent in a area continues to offer vendors "No Sale - No Fee" (NOTHING to pay until YOU get the proceeds of sale) human nature will prevail and they will be successful in gaining enquiries leading to instructions. "
Of course and I would advise vendors that have properties at the lower end of the value scale to instruct on such a basis......however if you have a property that is valued a over £400K like the one in the south east highlighted by AC...then you probably should not be looking at this fee structure!
Ok Wed 12.46
I'd like a tap fitting and a door hanging. How much will it cost.
Well it depends, do you live in a flat or a mansion ?
Need to chnage your name theres a 2 min lag.
Big Ted; perhaps you should learn the difference between a product (petrol, milk, baked beans) and a service (plumbing, joinery, estate agency)
Plenty of sophisticated advice and various schemes suggested on this subject.
However, whilst just one decent agent in a area continues to offer vendors "No Sele - No Fee" (NOTHING to pay until YOU get the proceeds of sale) human nature will prevail and they will be successful in gaining enquiries leading to instructions.
The funny thing is that whilst more cheap flats sell faster than expensive houses the require much more chasing because they have leases.
The sweet spot for instructions in the South East is probably about £400,000.
It's a house, probably a semi, has clean legal title and a queue of people to buy it.
Easy money as far as an agent is concerned, which is why, where I work, you are lucky to achieve a fee above 0.75%.
OK I own up, I charge a flat fee of 2%, what ever the price, house type, vendor, see open honest and PC.
@ Big Ted perhaps you should go back to Play School! If you are old enough to remember that ;-)
I would like some petrol please, how much is it ?
Well that depends . . what type of car do you have ?
You don't seem to be getting my point at Q3/A3 at all.
If the EA currently charges 1% on an £100k flat, a 200k house, and a £400k house at present, that brings in fees of 1000+2000+4000 = £7000. If we assume that covers their expenses, and yields a modest profit, then.....
If they take a flat fee to cover the same 3 sales, they need to bring in 2333+2333+2334 = 7000 - so the owner of the £100k flat will have to pay £1333 more. Unless you tier the fees according to the value of the house - which ends up proportioning the same as a percentage would.
I'm not making any points about social equalisation, merely that if the flat fee needs to cover the same overheads and expenses as the percentages currently charged, the lower-end householders will lose out, and the higher-end householder will get cheaper fees. No?
God is in the detail said;
" .... how about the costs related to the actual work done as a starting point together with any overheads?"
To which I said
"So the logic to that would be "divide overheads by number of clients to split it evenly over the client base" (in order to work out a fair share of the overheads for each client). This was a question, not a statement - I was asking if this was what you proposed.
and God says -
" I don't understand how you consider the averaging involved in what you've just said to be any different from the averaging used when calculating your favoured factors of average house price and average estate agency fee. After all the former is derived by dividing by the number of houses and the latter from dividing by the number of estate agents. "
I didn't say anything about considering these two things to be the same or different. You're the one who suggests that the client be charged (a share of) overheads, as is stated above. In order for the individual client's share of the overheads to be calculated on a transparent basis, one method of calculation could be, as I suggested, to divide the total overheads by number of clients to split it evenly over the client base. But the problem with this is that the number of clients changes - so the calculation would be different for each client.
If this isn't acceptable to you, how would you suggest the part of the fee based on 'overheads' be calculated? Or are you happy to leave it to the agents, and be non-transparent?
*traparent = transparent (Damn BBerry and old eyes can hardly see the screen)
Well at least we are having debateon the subject of fees!
From vendors point of view, the amount an agent is paid should be based on the clients perceived value of the agent not on % of the value of the clients property.
There are are many alternatives to no sale no fee % fee structures. In my post to Deedee I did not say the flat fee was on no sale no fee basis!
How about a traparent Inital cost for marketing a property paid up front with a commision paid after the completion based on time to sell.
Then you the vendor really does pay for performance and value of the EA. The EA is incentivised to do the job......good agents will be paid more poor agents less.
So you want beat the price comparison websites then come on get creative!
Displaying our wares on fancy websites but never ever our fees. Enticing customers to enquire then closing for the business, saving the world one sale at a time.
Preaching the pitfalls of choosing on price alone when its the very thing we cherish the most. Guarded and only revealed to those we see fit, our well earned reputation for mistrust.
The whole world cries out for transparency yet we still refuse and why should we when it's so warm and cosy in the middle of the flock.
Hiding behind our fees with tales of quality service with not that much to differentiate us, we're all so unique. Scared to commit, to say those 3 little words, value for money.
Truly different and better then let the world know, declare your value for their money, reveal your fees!
I know where Get Real is coming from but if a vendor suspects that they can't afford your fees then the explanation of the whole package will be wasted on them.
Unfortunately for us it looks like the future may bring comparison sites in much the same way that banks are compared in rates tables. I'm not looking forward to this but I'm going to do what I can to be ready for it.
........Giles said:
"Its all about listing at the right price and sensible fees, we are the most expensive in our area but are the agent of choice. Our reputation for selling brings customers to us. Cheap Battery farm estate agency has no place in the UK."
I agree with Giles. If you base your fees on the actual work you do for your clients together with the level of service you provide, hence your reputation, and then add a dash of common sense you will be more likely to be in a better place than merely using average house price and average agency fee.
Remember, basing your fee on the actual work done and level of service does not neccesarily mean that you have to charge less money, regardless of whether the fee is flat or a percentage. When communicated well to the client it can actually increase perceived value and that's an important point. It is the basis of all premium services.
Do we tell the Fish and Chip shop on the corner what to charge? Nope. Either pay or go buy elsewhere.
Same in EA, pay your money take your choice, but if you select just on the fee you are playing a dangerous game. Cheap is just that.
People sell through us as they want to sell, not be on market, that takes quality, the fee is the least of the issues. Contrary to many postings property does not just sell itself. Reveal my fee it without explaining the whole package,? No way.
.............Monday 23rd said
Q1: "So the logic to that would be "divide overheads by number of clients to split it evenly over the client base""
A1: I don't understand how you consider the averaging involved in what you've just said to be any different from the averaging used when calculating your favoured factors of average house price and average estate agency fee. After all the former is derived by dividing by the number of houses and the latter from dividing by the number of estate agents.
Q2: "Since the client base will be changing, how often would you recalculate this? Wouldn't it result in different flat fees for clients as the total number of clients changes?"
A2: Well of course a flat fee has to change, are you telling me that you'd expect the actual fee (in pounds) to be the same in in 2002 as in 2012?? This is true of any business that changes the price they charge for their goods or services - they need to change to reflect the times to make sure profit is maximised whilst at the same time mantiaining competitiveness with rivals companies. Now, how often the prices change is up to the individual business to determine (perhaps you could base it on an average number of clients - lol!).
Q3: "If you have a situation where a percentage between (say) 1.25 and 1.50 applied to all the properties sold by an agent generates a break-even, then if you were to translate that into a flat fee at the same level for all, all that would result is that the owners of the lower-priced properties would be paying more, and the owners of the higher-priced would be paying less. Is that what you want? Is that what the owners of the lower-priced properties want?"
A3: Look don't take this the wrong way but all flat fees from the cost of a train ticket to the price of bananas hit the poor harder than the rich. As consumers we benefit there by way of transparency. However, to any member of the public (and to me too) the notion that estate agents are using their percentage fee structure to act as social equalisers or some kind of Robin Hood for home sellers is arguably the biggest belly laugh ever! AS IF!!!
Its all about listing at the right price and sensible fees, we are the most expensive in our area but are the agent of choice. Our reputation for selling brings customers to us. Cheap Battery farm estate agency has no place in the UK.
Would you go into Marks and Spencers help yourself to a load of goods walk out and not pay? That is what no sale No Fee relates to in estate agency always beware of vendors!
God is in the detail said;
" .... how about the costs related to the actual work done as a starting point together with any overheads?"
So the logic to that would be "divide overheads by number of clients to split it evenly over the client base"
Since the client base will be changing, how often would you recalculate this? Wouldn't it result in different flat fees for clients as the total number of clients changes?
To God is in the details ;
If you want to determine a flat fee, there has to be some baseline to start from. If you feel that a baseline of average fees and average prices is an inappropriate place to start, then what would you suggest?
There must be a baseline level for every business where income = expenses, but I fail to see where that can be universally applied.
If you have a situation where a percentage between (say) 1.25 and 1.50 applied to all the properties sold by an agent generates a break-even, then if you were to translate that into a flat fee at the same level for all, all that would result is that the owners of the lower-priced properties would be paying more, and the owners of the higher-priced would be paying less. Is that what you want? Is that what the owners of the lower-priced properties want?
No sale - No Fee ruined sensible pricing of selling fees.
"If you want to know what you get for your fee and identify value for money ipostcode isn't going to provide your answer."
Yeah ipostcode isn't quite there yet but who says there won't be a leaner & meaner contender in a year or two from now. For estate agents not prepare for that is business/industry suicide! After all Rightmove seemed to rise to power from obscurity overnight.
There will always be someone who thinks they have a great idea to change the Market but as agents offer free valuations why would you use this website?
If you want to know what you get for your fee and identify value for money ipostcode isn't going to provide your answer.
....... Mike said:
"Whoa Guys no need to rip each others heads off for this boy!!!!!!!!"
I agree that ipostcode appears to be following a slightly misguided approach given that in order to thrive they require the partnership and cooperation of estate agents which they are perhaps not doing their best to endear.
If there is any value to be extracted from "this boy" then maybe it is in all the offshoot side conversations that are springing up. Who knows, maybe some of the fruits of these discussions might even give us new ideas for more effectively dealing with all the ipostcodes yet to come.
...........Monday 23rd said:
Q1: "Who pays for the work done that can't be specifically assigned to a particular client?"
A1: Well I would have thought that the given flat fee should be priced appropriately to accomodate for all the overheads not attributable to clients. I see no difference between this and a fee based on a percentage.
Q2: "Would the client who withdrew from the market before achieving a sale still pay the agent for all they'd done, or would they protest about having to pay a 'withdrawal fee'?"
A2: That would be for the individual agents to decide. The important point here is that even if you charge a "withdrawal fee" at least it is very transparent for vendors.
Q3: "And why shouldn't the average house price and average fee be taken as a starting point to a discussion of flat fees vs percentages? Where else would you start? "
A3: I didn't say you "shouldn't" use average house price or average fee. I merely remarked on the fact that it seemed very arbitrary especially as you didn't offer any reasoning or explanation as to why you would choose those factors over any others. Regarding your "Where else would you start?", well as I said in my previous post, how about the costs related to the actual work done as a starting point together with any overheads? That way you don't need to deliberate over any costs not directly attributable to a given client because they are all related to providing your service.
That does make me curious though, what logic would you put forward to someone who asked why you would want to base a flat fee on average house price and average Estate Agency fee? Surely the answer has got to be better than your "well why not".
Jimmy:
Damn I thought nobody noticed :-)
To summarise MIke, who clearly likes a chat, ipostcode is the reason you SHOULDN'T put your fees on your website.
Whoa Guys no need to rip each others heads off for this boy!!!!!!!!
This whole thread has been generated, by someone who has started a web comparison website 1 month ago.
In order to drive traffic to it, he needs as many of us as he can get to list a fixed price/ percentage for our services, so his visitors have something to actually use his site for.
He is trying to introduce this, not as a way of tidying up or improving our industry, but as a way to make his business profitable, to do this he infers our industry is mostly 'bent' and he is doing this as some kind of public service.
Arrogance is bliss!!!!
We all know that improvements and forward changes are needed in the way we operate, one reason is that bad agents get a disproportionally large amounts of publicity, and good agents pass unnoticed.
This is public perception backed and enforced by a biased media.
{who is hated more than journalists, why EAs. Thank God for solicitors}
We deal in peoples homes, which equate with their life security, their little private domain, it is very close to the heart, so when we do screw up of course the repercussions are going to be dire.
Hands up all of you who have had a client crying their eyes out in your office, because the vendor has accepted a more lucrative offer at the last moment.
No matter what you say or do, deep down the buyer still believes it's somehow your fault, and that little voice says to them, 'how could you have trusted him, he is an Estate Agent'.
We desperately need to change the public perception of our industry, we need to get the new technology on board that serves and improves our business, informs our customers and opens us up to scrutiny.
Unfortunately those who have adopted the new technology with the most gusto, megaportals, have done so not to benefit or improve our industry, but to profit from us. In fact they thrive in an atmosphere of distrust of agents, seen now to be somehow regulating us and keeping our excesses under control [go out there and actually ask real people what they think, some answers may surprise you]. These are not the people we need to rate us.
AS for alternatives from within the industry, we discuss, we always try [as entrepreneurs it is what we do] they will come as long as we keep working at it.
But the biggest change of all has to be regulation, the issuing of EA licences, the barring of those with certain criminal convictions from holding licenses. An actual governmental accredited examination structure with industry centered vocational input. This will not clean up our industry entirely, but bad EAs will be perceived as the exception not the norm.
The trick is how do do this without the government plundering our profits.
Incidentally, just how many £millions of tenants deposits has the DPS retained to date?
"Why not base it on the actual work done"
Who pays for the work done that can't be specifically assigned to a particular client?
Would the client who withdrew from the market before achieving a sale still pay the agent for all they'd done, or would they protest about having to pay a 'withdrawal fee'?
And why shouldn't the average house price and average fee be taken as a starting point to a discussion of flat fees vs percentages? Where else would you start?
...........Monday 23rd said:
"Someone says they want to pay a flat fee, not a percentage. Fine. I ask if they'll pay a flat fee correpsonding to the average house price and average EA fee."
Why determine your flat fee on something as arbitrary as average house price or (especially) average Estate Agency fee?
Why not base it on the actual work done (e.g. valuation, take photos, write description, put it all up on Rightmove, answer subsequent enquiries from potential buyers)? Now wouldn't that be something!
Furthermore, why not provide the vendor with a breakdown of this flat fee to aid transparency and leave the vendor with no doubt in their mind as to where their money is going?
- Would this make it easy for vendors to compare Estate Agents? Probably, yes.
- Would some Estate Agents have a harder time offering poor value? I suspect so.
- Is that a bad thing? Not in my opinion.
Remember, the Devil shouldn't be in the details.
Unhappy Chappy is now Happy Chappy didn't know I was legendary but thanks. The point I was making was directly in response to the scenario in the post from Deedee and was clear to Mike. So to clear up my position on fees a vendor should look for the right agent and the right fee structure for any given sale
Arrogance has nothing to do with it.
Someone says they want to pay a flat fee, not a percentage. Fine. I ask if they'll pay a flat fee correpsonding to the average house price and average EA fee. What's arrogant about that? What's wrong with asking for a bit of debate?
We're an arrogant bunch aren't we.
To consider ourselves better just because we locate our business on the high street and at the same time treat any attempt to rate our service as an insult.
Stubbornly resisting change whilst all around us changes and berating anyone who does because we're fine just as we are. A thousand 'expert' opinions to demean something new and none to put forward an alternative.
Refusing to reveal our fees whilst complaining about others whose fees are put upon us and all the time expecting no interference with our inherent right to list.
An industry in transition where we happily stand still and dare to be moved.
Oh to be like us.........
Happy Chappy said -
"I will give a fixed price up front take it or leave it"
Well, if the Fixed Price is based on the average selling price, and the average EA fee (and why shouldn't it be?), then that will work out at £3,863 per seller as a flat fee.
Average house price UK £241,461 (BBC Nov 2011)
Average EA fee 1.6% (OFT survey a year or so ago)
Essentially, the owners of lower-priced houses would pay more, the owners of high-priced would pay less. Is that what you're looking for?
Or do you want tiered flat fees, so that those at the lower end pay less, and those at the higher end pay more? If so, how does that differ from percentage-based fees?
Are you the legendary Unhappy Chappy with a new identity?
Happy Chappy said;
"I am subsidising all the propeties you have taken on a no win no fee basis and cant sell.....I will give a fixed price up front take it or leave it! "
Good for you.
The flipside to you 'subsidising' all the No Sale No Fee properties is - as long as the general public expect EAs to do work for them for free (valuations, advice, etc), and for as long as the general public expects the agents to take the risk on all the expense involved in marketing their property, with no guarantee of payment at the end, then the cost of all the unfulfilled sales has to be spread across the income from the successful sales.
You can't say that all sales that don't reach a conclusion are the fault of the EA......
Happy Chappy: "I wonder if you can get a EA BA (Hons)"
Nah - to be a successful Estate Agent you need to hone your skills at the School of Hard Knocks, mate! None of this namby pamby turn-up-twice-and-collect-your-degree cr@p...
Besides - if you were to limit yourself to a ten thousand word dissertation on the subject of "Marketing a Residential Property and Negotiating The Sale", it wouldn't take you much further into the process than the erecting of the board... ;o)
Peebee.....quite correct....i knew you said something to do with the EA industry was an art.... see I kind of listen to what others say but dont think has anything to do with me now being happy :0)
I wonder if you can get a EA BA (Hons)
It seems we will have to get use to these sort of press releases now. 2012 will be the year for internet chancers. Everyone from Mr Versace who though he would set up a agency fee comparison site without realising that we do not disclose our fees, to the likes of Mr Hendry and Rashid who think they can nick your stock and use it to line their own pockets whilst slandering the industry to gain a bit of credibility. Then there is the review bods who want to hold you over a barrel, will allow your competitors to bad mouth you publically and want you to pay for the privilege. Expect more nonsense surveys, polls and stats pulled from someone’s behind in order to make a blatant press release look like a head line.
A concept, £250’s worth of code and the balls to tell everyone you’re the next big thing = Internet chancers.
Brilliant post btw Mike
Ray Evans "Sheep sha**ers....? That's not me."
No, Ray, it isn't.
But only because you ain't managed to catch one yet! ;o)
Sheep sha**ers....? That's not me.
That M.
Should be Mike.....
Happy Chappy.
You quite rightly pointed out:
" "Vendors know to do this; They also know to ask around to find out who the best agents are...."
Ahh this is where you are wrong many dont, often most havrn't got a clue how to spot a good agent from a bad agent let alone negotiate a fee with them. "
This is the perennial problem for all of us in every walk of life, the conman / shyster will always sound more convincing than the straight operator, after all it's his job to win you over to get his grubby [in some cases extremely well manicured] fingers on your dosh.
If I knew the answer to spotting these types in advance I would probably get a Nobel prize.
Experience helps us somewhat in spotting these rouges, but how many people sell more than a couple of properties in their life, [i think the average is 3].
So how many people have any real experience of EAs and know what to look for?
There is some real food for thought here.
I think Richard Rawlings [i do read him regularly] has some interesting ideas about educating the public as to what it is we actually do [and need to be seen doing].
Regulation wont help, scrutiny wont help..no matter how well any industry is monitored and controlled the criminal element will always find a way to penetrate and profit.
Our problem is that whereas other industries are seen a mostly good, with a few bad elements chucked in. EAs are seen as an industry of bounders, with 1 or 2 good men in there somewhere. And articles like this one do not help.
Websites like iproperty.com and the megaportals do not help here, I believe it is in their benefit to keep painting us as the scoundrels, and they are keeping an eye on us to protect the public.
DeeDee,
We all understand & agree, but as HappyChappy says, the figures do not look good to anyone outside our industry.
I would argue: Remember we are looking at a percentage of the sale price as opposed to the cash sum. Therefore 0.5 or 1% is a far better deal than 3% irrelevant of the sale price.
The owner of a multi million pound property came to me, I had just received a request to supply a UK house for an extremely wealthy client, so very little work for me [except for the years it took nurturing these contacts], I did the deal for 0.25% and took a tidy sum. The owner then came back with a spent Ex LA portfolio, which DeeDee has described most of the content for me.
Then he asked me to take his instructions at the same 0.25%. I did the calculations and told him I would rather give him £100 for every property he sold as it would be cheaper for me.
'Wonder Vendor': "I'll happily pay Rightmove a flat fee, knowing that no estate agent will ever market my property than Rightmove do."
Oh, dear. The bright and cheerful world of The Uninformed. If ignorance be bliss... you must be in raptures.
The only "wonder" here is how the Hell you managed to buy a property in the first place...
@Ray Evans
"I believe it was "estate agency is an art not a science"
That explains why some estate agents are pissed artists or sheep sh**gers...
Happy Chappy "EA fees are not a science they are an art I was once told."
I seem to remember this being from one of our previous dialogues when you were UNHappy...
...and I also seem to recall also that it was the APPRAISAL PROCESS that I described as 'an art', rather than the Fee.
Am I right on both counts?
I'll happily pay Rightmove a flat fee, knowing that no estate agent will ever market my property than Rightmove do.
No need 4 estate agents at all.
Tried to call the Contact us number but the number given on the website was not recognised
@ Happy Chappy on 2012-01-23 13:51:31
",,,,,EA fees are not a science they are an art I was once told."
Almost right, but not restricted to fees, I believe it was "estate agency is an art not a science"
However I am open to correction.
Deedee - Your last made me LMAO and undid all the hardwork MIke put in....so I am the owner of the £1M mansion and you have just said that for a property you value at £130,000 and is bloody hard work to sell ...you will charge 3% or £3900....but if i come and put my very desired easy to sell property with you, you will charge me £15000......please explain to me what i am paying for....i will tell you....i am subsidising all the propeties you have taken on a no win no fee basis and cant sell.....I will give a fixed price up front take it or leave it!
"Why should we be any different, if a vendor wants to know what it will cost to sell their property with a particular EA, ask them to come and look at the property and then discuss fees and what service is being provided for that fee". good advice sir
"Vendors know to do this; They also know to ask around to find out who the best agents are...."
Ahh this is where you are wrong many dont, often most havrn't got a clue how to spot a good agent from a bad agent let alone negotiate a fee with them.
Fees are not related to the level of service in anyway shape or form...I know good agents that charge 1.5% and I know poor agents that charge 1.5%.
EA fees are not a science they are an art I was once told.
@Mike
Excellent post.
As the saying goes: "If you pay Peanuts, you get monkeys" So anyone who bases their choice of Agency solely on the commission they charge without taking their track record or performance into account will probably get a bunch of monkeys!
In the past, a Vendor has chosen another Agent who offered to sell their house for 1% instead of the 2% we quoted. About 3 & 1/2 months and dozens of fruitless viewings later they are back on the phone instructing us... Because the Monkey-Agent (;-)) they chose overpriced the property, then didn't market it efficiently (hell - some EA Admin staff don't even seem to know how to construct a sentence or spell properly, judging by some of the adverts I have seen on Property Portals!). They just get anyone who calls in through the door for a viewing, without even ascertaining whether this property suits their needs, whether they have the finance needed…etc., etc. A good Agent has to take into account the Saleability of a property. Generally we charge 2% for a Sale but some factors need to be taken into consideration: The price of the property, whether we are instructed as sole Agents , how much advertising costs we will incur (some less desirable properties may need a lot more advertising coverage and more calling out, for a longer time due to being in an area that is not very popular, so one would be warranted to charge 3% instead of 1%! I.e. - if we charge 1% on the Sale of a £130,000 Ex-local flat in need of modernisation located in a built-up area full of council estates, that would make us £1300. Considering that we might have to advertise this flat for several months, taking into account paperwork, phone calls made, petrol for viewings, commission for the negotiator, wages for admin staff dealing with the Sales Chain…. Is £1300 worth it? Does it even cover the costs?! On the other hand, if someone is selling their highly desirable £1,000,000 Mansion and instructing us as a Sole Agent, and we know we can sell this within a couple of viewings, with little advertising as the house really sells itself… It would be quite acceptable to charge the owner 1% or 1.5%!
But that’s just my humble opinion.
Soho Boy - So, you charge 1.5%?
Agent A - Yes.
Soho Boy - Agent B can do it for 0.5%. Can you match that?
Agent A - No.
Soho Boy - Good bye.
Soho Boy - So, you charge 1.5%?
Agent C - Yes, but it's negotiable.
Soho Boy - Can you match 0.5%?
Agent C - Yes, we can do that.
Soho Boy - Thank you.
@MIke on 2012-01-23 12:45:30
Cripes! Someone who makes total sense on the subject.
Well done!
Far too many Vendors and sellers do not appreciate the fact that a mutually suitable fee can be negotiated. Estate Agents want and need the business, especially if the property is highly saleable and there is minimum effort. Whilst a good commission can be regarded as a reward - there is stiff competition out there with so many Estate Agents on just about every street corner it seems. Best advice - choose your agent carefully and negotiate a suitable fee which will provide the agent with the motivation to sell.
@ michael
"the type of client who wants to know my fees before booking the market appraisal usually (not always) is notthe kind of client I want"
It's not "the type of client you want" but rather "the type of client you get" these days.
"ipostcode is one of several new comparison websites, which says it will change the way property sellers and landlords go about selecting an estate agent and creating more transparency around fees."
So yet another satellite 'business' comes online with the intent of telling us how to run our business [so they can generate more profit], from the pap written in this article these people have got it absolutely wrong.
ipostcode [like the original name by the way], let me give just a glimmer of why you are talking complete bollocks.
We are not shops selling baked beans, where the customer can hop from Waitrose, to Tesco to Lidel and buy the cheapest tin of whatever brand they fancy, knowing no matter how much, or little they pay they are getting the same product.
I operate on a sliding scale of 1% to 50%. I charge 33% for instructions in Mogadishu, 1% for a 2 bed starter home with 5% deposit available for 1st time buyers within easy commuting distance to central London.
ipostcode.com I do this because in both cases a completely different service is required, are you beginning to understand this yet?
We are a service industry: We don't even sell houses! [strange as that may seem to you]
Vendors sell houses; we provide advisory services, marketing and a shop window [virtual or otherwise] to enable them to sell at the best possible price, thus generate maximum profit for our client. This is the service EAs provide, some do it extremely well, some do a piss poor job. All the rest of the work [paperwork, chasing etc..] is as a result of successful marketing generating interest and eventually a buyer.
(Surely the title Estate Agent is clue enough)
We are dealing with valuable assets here and a poor EA can cost the vendor 10s of £ks.
For this reason prices will vary according to the service provided.
Solicitors charge depending on reputation, the most dynamic and successful will charge the most, and we will pay because the better they have proven they are, the more likely they will be successful for you.
The same with accountants, the more they charge is the more they will save you.
The same throughout the service industry, and in order to get the most accurate idea of what any service will cost you have to go see your, solicitor, accountant, Financial adviser, private detective or whoever. You tell them what you want, and they give you an idea of what it will; cost.
Why should we be any different, if a vendor wants to know what it will cost to sell their property with a particular EA, ask them to come and look at the property and then discuss fees and what service is being provided for that fee. Vendors know to do this; they also know to ask around to find out who the best agents are. And if the selection was just fee based then several agencies would have ceased trading years ago!
Why are we being slated for adopting what is standard practise across the service industry, maybe this might clarify things.
From ipostcode.coms founder Dominic Versacies linked in profile:-
"ipostcode.com offers a win win for both sellers/landlords and agents. The seller or landlord has a simple, free and no obligation opportunity to compare what local agents are offering prior to inviting them to the property to give a valuation. For agents it is a new and effective way to find sellers and landlords who about to put their property on the market."
Get that did you. They are a price comparison [not property] website and want us all to commit to a fixed fee, BEFORE EVEN VISITING THE PROPERTY so they can offer this service to their users, make a tidy advertising profit, offering us the freelistings carrot. After all if they do not have prices to compare what will they do?
Isn’t amazing how these people continually try to make us look like a bunch of shady spivs, whilst continually coming up with schemes to profit from our hard work.
@ace
The Rightmove fee discrepancy is perhaps based on quantity of offices & length of advertiser servitude to them, so is different.
I'm a rural agent & tend to find that the type of client who wants to know my fees before booking the market appraisal usually (not always) is notthe kind of client I want. My fees are pretty consistent but go up if a For Sale board is refused or if the house is in a really poor to sell location. Go down if its a repeat client, highly saleable, or clearly a truly financially strapped client. I'm in a dilemma for some 70's flats in the area which are cheap but have defective leases ... IF the conveyance goes through (severalhave not) it takes solong that we probably make a loss on a low % on these cheap flats.
Happy Chappy also wrote;
"Ok do any of you accept an up front fee for selling a property.
"
I do. Not for 'selling' it per se, as that's what the EA fee is for.
I take an upfront fee to cover print cost of schedules, sale board contractor's fees, portal fees etc.
Happy Chappy wrote;
"What difference does the vendor make to your approach to and costs for selling the property. "
If they know what's going on, are sensible, and will essentially leave me to get on with it, I'll charge them my regular fee.
If I encounter either - the seller who hasn't a clue, who'll have to be led by the hand thru everything - or the seller who argues with everything, won't be happy however hard you work, and will generally be a PITA - then I'm likely to charge more, because they'll involve more work than the previous client.
Just a few weeks ago there was uproar from agents that Rightmove charge different fees to different agents.
I must say the pricing on property/client/situation is certainly not helping the reputation of estate agents.
Sure, don't give your pricing over the phone, but this varied fee approach is simply to milk each individual client for as much as you specifically can.
If the vendor wants to list at a much higher price than you advise, don't just whack up your fee - What good does that do? Stick to your guns and if they want to go elsewhere, let them.
If they all appear to do the same, then most people will go for the cheapest one. Common sense.
Where agents miss out (and this is a big opportunity) is in differentiating themselves from the competition.
@hmmmmm
Could you please just try and justify why your fees are higher, the best way you can?
if pushed, we tell people "anything bewtween 1% and 4%
Ok do any of you accept an up front fee for selling a property.
If so how much would\do you charge.
Copus
Do you offer a different level of service for your range of fees?
If I walked in with 2 properties to sell would you charge me different fees on each.?
Monday.
What difference does the vendor make to your approach to and costs for selling the property.
.
A used-car dealer won't quote a trade-in without seeing the car.
Plumbers and other tradesmen won't quote without seeing 'the job'
I won't quote without seeing the house, and, more crucially - the seller.
I agree 100% with The Rat. My fees vary according to the type of property (and sometimes the client).
Advertising our fees up front therefore wouldn't work. We would have to say: Between 1% and 2.5%, which is a nonsense.
Richard Copus
(slightly less Old Boy but nonetheless not so young NAEA agent!).
@ hmmm..
Your last two posts refer to lettings.
This is not LAT it is EAT
How do you deal with the situation that comes about when you quote a client a fee and win the job, then they recommend you and you quote a higher fee or lower fee to their pal/relative?
Surely this leads to conflict and complaint???
A sensible fee scale that is consistent avoids this.
I hope some of you are not quoting higher fees to the vulnerable!!!!!!
To NAEA old boy
I'm doing fine thanks!
By the way, I'm not agreeing that we should all advertise our fees on our website etc. if we were all to do this, all this would do is promote those small little starts up offering to do it for next to nothing - which in my view would run down the reputation further of estate agents as the quailty of service, standards etc just wouldn't be there
@ hmmm..
Well, if you are willing to offer a quote for fees without knowing what it is you are selling, condition, demand, tenure, motivation, etc then you perhaps need a refresher course in how to run a business.
Our fees are three times that of some of our competitors
We list more than twice as many as the low priced agents, because people are suspicous of the low fee
Also when sellers phone we find that they will not have a market appraisal if we do not tell them what we charge when asked directly
Better to repsond to the question, pitch a short pitch and ask for the appointment - seems to work almost every time
Hello Domenic.... Again.... Yawn.
can someone provide me the url to the fees on winkworths site as i cant see them!!!!
They have a link saying http://www.winkworth.co.uk/buying-property/costs-and-fees
however if you look you will find that there are NO FEES stated.
You're not pricing to build a brick wall mate!
So do you not tell them how much yours fees are if they ask you over the phone?
When a landlord calls me I tell them. Ours fees are quite high so knowing of course there are plenty of two bob agents offering to do it for literally nothing, I'll just try and justify why our fees are higher, the best way I can
@ Richard Rawlings on 2012-01-23 08:27:26
The last two sentences of your post are spot on correct!
"........make the process more competitive and transparent, encouraging agents to pitch upfront for the business" (by this they mean just advertise the fees?)
By saying this ipostcode would seem to knoiw little about "pitching" in the EA business (or many others).
Of course there should be "transparency" of fees etc. BUT during an actual face to face"pitch" of services offered etc. (which is only really possible after seeing the property) and then confirmed in the written, acknowledged and agreed TOB's.
It is just good business practise.
I will always charge more for a highly priced house near a busy road and a lower rate for a sought after, keenly priced cottage which I know I can sell in days. But agree with below - need to see it first
Revealing fees over the phone is silly - like so many things - you need to price for the job.
I don't get it. A landlord rings up and says 'how much are your fees'
I tell them how much our fees are
What's the problem?!!!!
I have a strong view on this as anyone who has attended my current "Raising Fees Instantly" roadshow will know. Most vendors/landlords have little idea of the type of service provided by an agency, often inviting an agency to pitch simply because of its local presence. My reseach suggests that 32.5% are influenced primarily by recommendation followed by 22.5% who "were impressed by the individual" That's over 50% of people making a decision with little regard for "what they do" and overwhelmingly for "who they are". This is difficult to measure and therefore difficult to price. A professionally "attractive" agent should be "reassuringly expensive" but this can only be demonstrated at the time of instruction. Agents who simply quote a fee on the phone are in danger of causing their business to become a commodity and they will always remain the cheaper alternative becasue they have not given themselves the opportuunity to demonstrate value. That would cause industry standards to fall rapidly. Cut fees at your peril! No excuses! Richard Rawlings.