Why is selling a house so expensive?

siowenson

Why do I have to pay a solicitor 1% of my sale value when all they do is advertise my property and take phonecalls from people interested?

I didn't realise untill today that only estate agents can list a house for sale on rightmove and ESPC. What an absolute con. Once I have my HIP, or whatever, why cant I list it on these sites? After all, they are the most frequented by buyers.
Is this not a clever tactic employed by estate agents to force sellers to pay their extortionate prices?

I grudge paying these leaches anything but I do accept that if I want a decent market cover then I'll have to use their "services". Is there a national estate agency or something? Possibly one that doesn't have branches and only works over the phone?

I would be very gratefull for any help.

Thanks,
Si.

sarkin

There are alot of online estate agents out there that charge a flat fee.

The solicitor fee is not normally 1% have you got your costs mixed up?

Little_Otter

Unfortunately the best advertising is RightMove.co.uk (in my area anyway) and only estate agents can advertise here. Most agents have now stopped newspaper advertisements as they are very expensive and rarely viewed.
(Are you from Scotland or Ireland? as the solicitor sell the house for you @ 1%) Otherwise, you shouldn't be paying the solicitor 1% they should give you a fixed fee for the work/time they do for you.
Many people have tried to sell their houses privately which you can do, get a large for sale sign, put posters up in post offices etc, but this rarely works (try it for a couple months to see if you have that time)
As the other post states, there are many cheaper online agents that can get you onto rightmove/internet advertising for a fixed fee, usually much less than normal agents, as they dont have the same running costs. (I'm an estate agent - a nice one :A )

siowenson

Thanks very much.

I hoped there would be something internet based. It makes more sense as I'll be doing all the viewings myself, all they have to do is advertise it.

BrixMorta

Siowenson, why do you refer to EA's as leaches. Do you understand the business, how it works, what they actually do? Do you appreciate that as a rule they don't charge a bean for an unsuccesful sale, despite the fact that many hours of time and money may have been spent on the case? Given this 1% isn't that bad in my view.

Mutton_Geoff

There are a couple of main reasons.

The business of selling homes is stuck in past times. No longer is a prominent High Street office required to market homes, the internet has made big inroads into the market but agents have mainly failed to recognise it. Although Rightmove has got it nailed, it is only due to a large agent (Countrywide) cornering the market. Their recent massive hike in fees is bleeding traditional agents who are stuck between the figurative rock and hard place as their own individual websites, however good, will not have the trafffic that Rightmove does.

Agents continue to support their local newspaper with acres of colour advertising when the rest of industry has virtually abandoned the local press as an effective media (see Trinity Mirror for an example of a dying trade).

Agents spend half their time in contact with proper apprenticed/highly trained professionals like solicitors, surveyors, builders etc and unfortunately they wrongly make the assumption that they too are "highly trained professionals" as a result of this shoulder rubbing. A cheap suit, snazzy car, clipboard and electronic laser pointer helps them complete that image. They therefore model their fees in the same way.

The traditional method of "no sale, no fee" leaves many exposed to lack of revenue when a sale doesn't proceed, so their fees must take into account that a large percentage of their negotiations won't come to fruition so it's the real sellers that must pay for all the failed valuations and wasted petrol the agent carries out.

Because many come from a background of poor education and lack of risk taking, we are stuck with the conventional agents business model despite the whole market and world changing around them.

The low fees up front model deserves to succeed as it filters out the chancers and means that properties listed by them are more likely to proceed to completion but for the moment the critical mass of agents stuck in a business model of the 1970's and 1980's means it will take a few more of them biting the dust before changes happen.

A good handful of new style marketeers with a fresh portal like https://www.globrix.com and some substantial investment in marketing the new avenue will see the traditional High Street fakers gone for good.

latecomer

Biggest problem the OP has is that in Edinburgh (and surrounding areas) most people looking for a home use a single resource - the ESPC (paper and website) Its pretty much a captive market and if you want to advertise in it, you've got to pay the price.

Who are you using? We sold at the end of last year and payed 0.66%. I was thinking that they prices might have come down but perhaps with houses not selling they are going up to try and make up for lost revenue?

Little_Otter

I agree with Mutton, that agents are stuck in the past having high street offices, we get very little footfall in the office, and most of our business is done over the phone and some internet based from Rightmove, but I agree that we have high costs for offices that are not required (going to be putting myself out of a job soon )

Some agents are putting their fees up to compensate for the loses, which doesnt help, and I have noticed that many are now using local online agents where possible. Newspaper advertising is no longer used for most it is too expensive and rarely viewed. People use Rightmove nowadays.
I got good grades in school GCSE's, went to college for my A Levels, and have a few years customer service skills (which I love) I used to work for a countrywide agent (god awful) but they gave me extremely good training and taught me all about the eastate agency act, ombudsman etc and kept up my training every month or so that I was there..
An estate agent doesnt have to have ANY qualifications to do business.

I escaped the trauma of a countrywide agent and now work for an independant agency, (only 3 branches). Countrywide charge the highest fees for the rudest (in most cases) service. all they care about is fast turnaround and when they will receive their cheque.
I would definately try an online agent though you will have to take the time to do evening weekend and daytime viewings, so be prepared to be flexible, as you dont want to stop any potential viewers seeing your house.

siowenson

Does anyone know of an online EA that uses the ESPC?

sarkin

Mutton_Geoff wrote: »

There are a couple of main reasons.

The business of selling homes is stuck in past times. No longer is a prominent High Street office required to market homes, the internet has made big inroads into the market but agents have mainly failed to recognise it. Although Rightmove has got it nailed, it is only due to a large agent (Countrywide) cornering the market. Their recent massive hike in fees is bleeding traditional agents who are stuck between the figurative rock and hard place as their own individual websites, however good, will not have the trafffic that Rightmove does.

Agents continue to support their local newspaper with acres of colour advertising when the rest of industry has virtually abandoned the local press as an effective media (see Trinity Mirror for an example of a dying trade).

Agents spend half their time in contact with proper apprenticed/highly trained professionals like solicitors, surveyors, builders etc and unfortunately they wrongly make the assumption that they too are "highly trained professionals" as a result of this shoulder rubbing. A cheap suit, snazzy car, clipboard and electronic laser pointer helps them complete that image. They therefore model their fees in the same way.

The traditional method of "no sale, no fee" leaves many exposed to lack of revenue when a sale doesn't proceed, so their fees must take into account that a large percentage of their negotiations won't come to fruition so it's the real sellers that must pay for all the failed valuations and wasted petrol the agent carries out.

Because many come from a background of poor education and lack of risk taking, we are stuck with the conventional agents business model despite the whole market and world changing around them.

The low fees up front model deserves to succeed as it filters out the chancers and means that properties listed by them are more likely to proceed to completion but for the moment the critical mass of agents stuck in a business model of the 1970's and 1980's means it will take a few more of them biting the dust before changes happen.

A good handful of new style marketeers with a fresh portal like www.globrix.com and some substantial investment in marketing the new avenue will see the traditional High Street fakers gone for good.

Fantstic well put Geoff, Estate agents are dinosaurs rightmove is where its at. Estate agents that understand the internet will survive all others will go to the wall. You only have to see the numbers of people on this forum quote and drop links for RM.

boyse7en

People use Rightmove nowadays

A quick straw poll of people in my office, my parents and some of their friends and a few friends (only 20 people so not a very thorough survey)

If you want to sell a house, where would you go? Everyone said Estate Agent
If you want to buy a house where would you look?Local paper and estate agents.
Have you heard of Rightmove? Only 6 out of 20 had heard of it

I know that this may not be a valid statistical sample, but it does indicate that the traditional EA has a role to play. Not everyone has internet access, and some of those that do are still not very knowledgeable about its uses.

Users of this site are, but virtue of being here, pretty internet-savvy and may believe that the rest of the general population are the same, but they're not.