New research by TheAdvisory consultancy, shared exclusively with Estate Agent Today, reveals exactly how fees have fallen for traditional agents in recent years.
The key headlines are that the average sole agency fee for traditional High Street agents has fallen 34 per cent in the past seven years, and now stands at 1.18 per cent plus VAT.
Based on an online survey of 2,137 property sellers across England and Wales, and conducted between May and July this year, TheAdvisory found that 45 per cent of vendors paid between between 0.75 and 1.0 per cent plus VAT.
But at one end of the scale 11 per cent paid 0.75 per cent or lower, while at the other end another 11 per cent paid as much as 1.5 to 2.0 per cent plus VAT.
In total,47 per cent of the vendors paid above the 1.18 per cent plus VAT average - most paid around 1.5 per cent plus VAT.
Some 95.3 per cent of the sellers in the study used a traditional High Street agent: sole agency agreements were the most common fee structure (71.4 per cent), followed by fixed fee (19.1 per cent) and multi-agency (4.8 per cent).
This means that fewer than one in 20 used an online rival, despite the extensive marketing budgets deployed to woo customers to the newcomers.
Gavin Brazg, founder of TheAdvisory, says: “It’s sad to see so many agents dropping their fees in response to the ‘perceived online threat’. It’s also a mistake as the threat is far larger in the mind than it is in reality.
“Market share for hybrid agents is actually very low given the amount of money they’ve spent on marketing. Most sellers do not want ‘cheap’. They want the extensive local expertise and high professionalism of a bricks and mortar high street agent.
“As long as you can justify your fees and differentiate your service, our figures show many sellers are prepared to pay up to 2.0 per cent plus VAT, if not more.”
Founded in 2005, TheAdvisory is the UK’s oldest independent advice and support resource dedicated to serving home sellers. Most of its team started their careers within estate agency, and then moved into the corporate property sector specialising in asset management and developer part exchange services.
You can see more details of TheAdvisory's research on fees here.
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In a way the cheap onliners do us a favour in that they associate cheap with poor quality therefore associating expensive with quality. Not that 2% plus vat is expensive, compared to other markets it’s a downright bargain. Given my 30 years plus experience in this game I can say with utter conviction that being a great estate agent is much harder than it looks and great agents are worth their weight in gold
Couldn’t agree more. We still charge 2% plus vat but nearly all our competitors are now sub 1%, it’s embarrassing, they are pleased with themselves when they get an instruction but at those fees I would be ashamed! To continue to provide a superior service you can’t do it with poor fees. Valuers should grow a pair and command decent fees.
2%.
That's greed
It’s value for money Peter. As part of our service we visit our vendors potential purchase property and then we do the ‘negotiating’ on their behalf. We more often than not save them more money on their purchase than we charge them for our sale. That ‘effectively’ makes us FREE for selling your home! Makes the Payanyway clowns look expensive by comparison! Is that still greed Peter or is it working smart? You decide!
If you can make a good living charging 1% and if you are part of a larger firm and make good profits for that firm at that level of fee then why not.If you cant make money at 1% then you either need to skill yourself up to be able to charge more or go and do something else. Biggest mistake in our sector is the assumption that one size (one fee) fits all and those living in the ivory tower seem to think they know what happens at the sharp end.
Paul
Have you ever had the estate agent acting for the vendor who finds out you're an agent attempting to 'negotiate' on behalf of the potential purchaser tell you to go forth and multiply?
Nope. We simply tell them that we’re negotiating on their behalf, never once had an issue, our vendors love it. Read some of our reviews on AllAgents as several refer to it. We are Park Row Properties.
Paul.
I agree.
As long as we are value for money.
Been doing this game for over 20 years.
Never ever charged 2%.
We just can't get that up here.
Good luck Paul.
Look after your sellers make them good profits
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