Collective bargaining on Estate Agent Fees - 1% Max!

[Alan Dale]

As has been mentioned Foxtons are going to open up with an introductory 0% offer but as soon as those 200 sales have finished I expect they will crank up their fees maybe even in excess of 2%.

I think that if everyone posted on here the rate they were charged by other agents then that transparency might keep fees down in the area.

We sold our last place through Wooster and Stock for 1.25% negotiated down from 1.5%. They were good. It sold promptly for the asking price.

I would argue that should be the cap for fees in this area.

I also think agents should be allowed to post their fee rates here in order that we have more open competition.

[char1ie]

I have a nice house. Recently valued at 800k by a local estate agent. He told me that he has loads of people looking for a house like that. He can make calls and the people will come apparently. So the 1% fee of ?8,000 seems a little steep. I suggested that he takes ?3500 which is a pretty tidy profit for making a few calls. He laughed.

I tried to sell my last house privately using an online agency. But the estate agent mafia prevent private websites that allow you to sell privately from publishing content on findaproperty and rightmove. The estate agents have the market sewn up. But they are parasites and their fees are far too high.

1.25% is a lot of commission. 1% with VAT included is high in the current climate. That's a few grand per sale with very little effort on the part of the agent.

I don't think it is about collective action. More to do with you telling the agent that you wont pay more than 0.8% or whatever you want to pay.

Charlie

[Alan Dale]

If you succesfully negotiate 1% inc VAT then please name and fame the agent on here.

[char1ie]

The 1% including VAT was with Osbourne Stewart. In fact, they made a mistake and told me that they would sell my house for 1%. They did and then sent me a bill for 1% + VAT. I sent them a cheque for 1%. We had an argument. They relented. I think they had forgotten to get me to sign any paperwork.

Percentages are getting lower and lower but then house prices are getting stupid. Agents should be charging around half a percent or a flat fee of a few grand. It is still a lot of money and they really don't do any more than bring people round.

Charlie

[Alan Dale]

Great stuff. I expect they'll be inundated with people demanding similar- and rightly so.

Will they be grateful though?

[char1ie]

There's a lot of competition around at the moment and a lot of demand for houses. Estate agents have a smaller share of the market each. But the market's worth a lot more. They'll be OK.

Charlie

[*Bob*]

If you've got the right kind of house in the right area, then the EAs will be tripping over their Mini Coopers to sign you up. So you can negotiate.

But not everyone has The House Which Sells Itself, even in mighty ED. The problem is, of course, that everyone thinks they have The House Which Sells Itself, even if it's got PVC windows, woodchip wallpaper and you have to walk through a bedroom to get to the bog.

[Siduhe]

What *Bob* said.

One other option to think about is stepped commission. So 1% if the agent sells at asking price, 1.25% if they sell at asking +15k and so on. We did this recently on our sale and it turned out pretty well. You need to work out your sums to check that the deal is enough to incentivise the agent and that you as seller don't pay over the odds if the agent produces a really good buyer, but also that it doesn't mean that the agent prices your property entirely outside the range of people who are most likely to follow through to exchange and completion. We didn't accept the highest offer made for that very reason.

As a (recent) buyer in the ED area, I would certainly consider selling with Roy Brooks, who seemed significantly more straighforward to deal with than some other agents.

[HennyPenny]

Dear All

New to this forum, but an avid reader for a few months.

As an estate agent.... (please do get the garlic and cross out here) we can justify our fees.. only recently I negotiated on an opening offer on a property, and in just one phone call, due to my fantastic powers of persuasion, knowledge of area (I have lived in E.D. for 15 years and worked as an agent for 10 years so know area etc) successfully increased the offer by over ?25K which covered my fee of 1.5% Three times over.That is an an awful lot of extra money for the vendor. The majority of us professionals can tell when someone is serious about a property, and we do also do a huge amount of sales chasing, making sure everything goes through to exchange and taking a huge amount of pressure of you, when there is plenty of other things for you to worry about. I do admit that there are a few bad pennies out there, and have had my own experiences of them when I moved locally 3 years ago. I'm not naming any names nor an I touting you all for business!

Happy Bank Holiday to you all - let the sun shine please.

Hennypenny.

[Huguenot]

I just sold through a very capable local agent, and was reasonably happy with the rate - did make the VAT mistake mind you.

I would say that I hope the lady they employed to follow the sale through from offer to completion gets a larger share of the commission than the sales person. She worked far harder and demonstrated considerable skill and diplomacy. Without her input the property wouldn't have shifted at the speed that it did, and I'd have probably moved agent.

As an aside the agents don't form a cartel and 'lock out' private buyers from internet aggregators - the aggregators claim a revenue share that the private buying sites are not willing to pay. The aggregators deserve payment, as they have to invest spend in on and off-line marketing to promote use of their site, as well as bidding for top results in searches on the internet search engines.

With online marketing you get exactly the degree of marketing you're willing to pay for - there's no such thing as a free lunch, so it's no use being spiteful if you don't get one.

[char1ie]

HennyPenny Wrote:

-------------------------------------------------------

> Dear All

> New to this forum, but an avid reader for a few

> months.

> As an estate agent.... (please do get the garlic

> and cross out here) we can justify our fees.. only

> recently I negotiated on an opening offer on a

> property, and in just one phone call, due to my

> fantastic powers of persuasion, knowledge of area

> (I have lived in E.D. for 15 years and worked as

> an agent for 10 years so know area etc)

> successfully increased the offer by over ?25K

> which covered my fee of 1.5% Three times over.That

> is an an awful lot of extra money for the vendor.

> The majority of us professionals can tell when

> someone is serious about a property, and we do

> also do a huge amount of sales chasing, making

> sure everything goes through to exchange and

> taking a huge amount of pressure of you, when

> there is plenty of other things for you to worry

> about. I do admit that there are a few bad pennies

> out there, and have had my own experiences of them

> when I moved locally 3 years ago. I'm not naming

> any names nor an I touting you all for business!

> Happy Bank Holiday to you all - let the sun shine

> please.

> Hennypenny.

I'm not 100% sure I buy the hard work and dedication angle, but to be fair Osbourne Stewart got me ?17k more than I expected.

Charlie

[Mark]

Hi HennyPenny

I've just had the second Foxtons letter delivered, this one aimed at lettings and saying they are opening a new "caf?-style office" on Lordship Lane. What do you, as a local estate agent think of Foxtons and will it make you guys bring down your % more to compete?

[lozzyloz]

It's still a sellers market so commissions of around 1.25% are still quite normal depending on what you're selling and where. Bottom line depends on the marketing capability of EA or online vehicle you decide on versus your expectation. I think with Foxtons coming to ED in an aggressive manner then it could get interesting. Hamptons are offering to pay for and organise your HIP and I think some local independents may think about merging (eg Volker/Thatch).