The former head of Rightmove’s lettings division has blasted High Street estate agencies for “living in the past, charging exorbitant fees and not doing enough to justify their meaty commissions.”
Sam Mitchell, who quit the portal at the end of last year to become chief executive of online agency HouseSimple, has also accused High Street agents of “cashing in” on almost half a billion pounds of fees paid as commission by sellers in the past 12 months.
In a fierce attack on traditional agency, Mitchell even cites his former employer in part of his criticism on the industry. In a statement he says: “Consumers want value for money, and are, quite rightly, asking ‘why am I paying an agent thousands of pounds for listing a property on Rightmove and managing a few viewings?’”
Alongside his outspoken comments, Mitchell also cites the results of a survey in June of 1,023 people - all of which have used an estate agent to sell their property.
- 89 per cent want agents to be more transparent over their fees;
- 41 per cent claimed to be unaware that they could have negotiated their commission fee;
- 29 per cent wished they had negotiated a lower rate after they had agreed it;
- 46 per cent felt pressured by their estate agent;
- 20 per cent said they were not confident negotiating so didn’t challenge their agent;
- 55 per cent said they paid at least 1.0 per cent commission to the estate agent;
- over 25 per cent claimed to pay between 1.4 per cent and 2.0 per cent.
Mitchell uses this data to claim that sellers could potentially be saving millions of pounds every year in fees if they were prepared to negotiate with the agent.
He says that if they haggled down their initial quote by just 0.25 per cent they could have saved £487m in agent fees. His calculations are based on Land Registry data for house prices and Office for National Statistics data for the number of homes sold by High Street estate agencies.
A statement from his agency claims there is “so much confusion over fees” and “a wide disparity between agents’ prices, with some websites not even listing their fees.”
“Unfortunately, for many people, they don’t feel comfortable haggling, and estate agents are extremely good sales people who can put forward a convincing argument as to why they are worth the commission they are charging. But at the end of the day they also want to secure your business, and if they are as good as they say they are, then your house shouldn’t be on the market for long, and they will have had to do very little work to make their commission” says Mitchell.