Fees - Mortgages Brokers and Estate Agents

ixwood

I think it boils down to necessity. These days with comparisons sites, lenders sites and dedicated forums, there's no real need to use a broker. Certainly for most "normal" cases.

If something's free (or perceived to be) then you'll do it, but charge for it and it's immediately different.

Not to mention the fact that your rates are worse than those available direct generally. Asking for a £1000 to get someone a worse deal than they get themselves is never going to be that popular really is it?

Also, you won't find many people that don't think EA's are generally overpaid. I wouldn't be happy paying them thousands either. I'd sell through a website that has access to rightmove.

I organised my mortgage a few months back and it was very easy and straight forward. Long term, the internet is going to kill traditional Brokers and EAs IMHO. No offices, low overheads and a good online presence is the way forward.

ixwood

Brokers and EA's are basically "leach" professions, that I think are at best considered a necessary evil and most people want to pay either as little as possible.

Cat695

Old habits die hard......with the internet now you don't need these guys

People just don't like trying.....or just don't know how to use the internet to their advantage

chartreuse_2

I've been mulling this over for a while and have a few observations:

People are prepared to pay for perceived value, naturally the converse also applies. I think it's fair to say that EAs are not held in particularly high regard. While often justified, that's not always fair. For example, the last time I moved, the EA I was buying from was useless, but I worked with an EA up the chain (he was selling to my vendor) to make things work. That was an EA who earned his money (and happened to be a decent chap to boot).

It seems fair to assume that the same, both good and bad stuff might be true about brokers. (Incidentally, I have encountered brokers who are also IFAs and do try to sell extra stuff - though, to be fair, one of them was up front about it, saying "I'll arrange the mortgage cheap and make my money off the insurance.". Also, via google, I've found my way into private, broker only boards, where they post "Got a client in X situation. Who knows a lender?" So some of the criticisms raised in this thread are clearly justified.) So, as Ian asks, why the difference?

I think it's a matter of awareness. We're an odd bunch on MSE and not typical of the man in the street. Most people still trust their bank, for example. So, when the the average person comes to sell a house, he's happy to pay the EA because "that's what you do". It wouldn't occur to him that there are any alternatives. However, when he comes to get a mortgage, his bank, which he trusts, will offer him a "free financial review to save him money". Other lenders will promise him the moon on a stick in their advertising, again with no fee. Against this, it's hard to make the case that he should pay money, from his own pocket, to somebody who does something he doesn't really understand, to get him something that, as far as he's aware, he could get for free.

In other words, people accept what they're familiar with. People are used to giving money to EAs, but less used to giving it to brokers.

Ian_Griffiths_Halifax

ixwood wrote: »

I think it boils down to necessity. These days with comparisons sites, lenders sites and dedicated forums, there's no real need to use a broker. Certainly for most "normal" cases.

I would guess that this is probably the biggest dedicated forum there is and the advice given on here by non-advisers is often ridiculous and laughable if it wasn't dangerous.

If something's free (or perceived to be) then you'll do it, but charge for it and it's immediately different.

I agree and that is where you have to show your worth if you are going to charge. The moment you stop charging is the moment you feel you have no value and you get what you pay for. The exception being when the lender pays a large enough Procuration fee to make it worth while.

You could go to your mates house for a basin cut, but go to a top hairstylist and they'll charge you a fortune. I was told once that a woman will often spend more than £60 per month having their hair done at an average hairdressers. That's £720 per year for around 12 hours work (assuming 1 hour per visit). It takes us 4 to 6 weeks to complete on a remortgage and I'd guess 2 1/2 months to complete on a purchase. I think I'll go and sign up for a course at Tony & Guy.

Not to mention the fact that your rates are worse than those available direct generally. Asking for a £1000 to get someone a worse deal than they get themselves is never going to be that popular really is it?

Not strictly true. There are some rates lower by going direct, but not all. It doesn't make any sense at all to pay somebody to get you a worst deal than going direct, but a broker can show the client the difference and he would hope that the honesty be returned by allowing him to arrange any other needs such as Life Assurance.

Also, you won't find many people that don't think EA's are generally overpaid. I wouldn't be happy paying them thousands either. I'd sell through a website that has access to rightmove.

As I said in a previous post, I'm helping a client to do just that, and they advertise on Rightmove, but it still costs £498 + VAT with them having very little work to do!

I organised my mortgage a few months back and it was very easy and straight forward.

Lots of people have arranged their own mortgage, but it doesn't mean they got the best deal. I've had countless people come to me who have regretted taking on the mortgage they have.

Long term, the internet is going to kill traditional Brokers and EAs IMHO. No offices, low overheads and a good online presence is the way forward.

People will always want a Face to Face, personal service. Yes the Internet is going to reduce the number of Brokers and EAs, but tell me a public facing business that isn't going to be effected by the Internet with the exception of Take-Aways, impulse/emergency buys like corner shops, non-deliverable item services like petrol, (who have their own problem with competition from Supermarkets), Hairdressers, Tradesmen and Garages.

Any service that doesn't NEED to be Face to Face will be effected by the Internet, but there will always be a place for a good personal service.

neverdespairgirl

Ian_Griffiths_Halifax wrote: »

I was told once that a woman will often spend more than £60 per month having their hair done at an average hairdressers. That's £720 per year for around 12 hours work (assuming 1 hour per visit).

Blimey. I have my hair cut 2-3 times a year, at £20 a time, and that's it. I think I save by having long, straight hair, and sticking to my natural colour (-:

MarkyMarkD

£60 is a completely stupid amount to spend. I agree with ndg.

Ian_Griffiths_Halifax

MarkyMarkD wrote: »

£60 is a completely stupid amount to spend. I agree with ndg.

So do I. I think I'll become a hippy and never have my hair cut again. It costs me £10 a month and I'm a bloke

chartreuse_2

Ian_Griffiths_Halifax wrote: »

So do I. I think I'll become a hippy and never have my hair cut again. It costs me £10 a month and I'm a bloke

£6 a month for me at Mr Toppers £6 flat rate haircuts! It looks rubbish, mind...

neverdespairgirl

Buy a hair cutter with blades thingy instead?