Giving EAs more commision for higher sale price?

jamie304

Has anyone tried offering agents an higher fee if they manage to sell above a certain price, say 1% below 255K, 2% above? I was thinking of trying this with an agent that wants to charge 1.5% to give them an incentive to get something above the stamp duty threshold. With 255K at 2% I will be 2K better off than 250K at 1%.

Woby_Tide

the effort to sell at £255k is enormous though, paying £5k over £250k is actually shelling out £10k, until the sale price goes over £260k it's hard to persuade anyone it is worthwhile, more likely £265-270 before it even makes remote sense to pay that much

Ian_W

Got to agree with Woby, the chances of you getting someone to pay £255K for a property when stamp duty increases from 1-3% the instant you go a £ over £250k is about as remote as me sleeping with Madonna to-night. Now that's remote, first she's in America and seciond, if she wasn't, I wouldn't sleep a wink!!

Have heard of folks using that type of incentive to get a quick sale but I think even pricing your property at £255K is daft. If it isn't worth £260/265 compared to other similar props in the same area you'd be much better off pricing it at £250, which you'll probably acheive. The way stamp duty works is daft but if you're selling you've got to accept it's there and will affect you near the threshold.

jamie304

I should have made it clearer, the agents all think that I should advertise at 250 but will get a lot of interest and could get 265+ if i get 2 or more people who want to bid against eachother. I was thinking of offering this incentive to the agents to encourage them to make that more likely to happen. I am a totla newbie to this so any advice would be much appreciated for when I come to chose an agent next week.

Jorgan_2

How many valuations have you had, if more than one are they all at a similar level?
What other similar properties are for sale at present? What has actually sold & how long was it on the market for?

In my experience, properties need to be priced at around the £270 -275k price bracket to escape the Samp Duty Trap so you need two buyers to want the property enough that they are prepared to pay 10%, based on your agents comment of market it at £250k. What are you going to do if you achieve a price of £265k & it then gets down valued to £255k? You have to pay the agent a higher fee without getting any more yourself.

Also the agnt could get an offer for £250k in the first week, are you going to hold out in the hope of maybe getting to buyers pushing the price up?

jamie304

I had 4 agents round and they all said they would set a guide price of 250K and then have 'open house' mornings were potential buyers could look round the house and also see each other to maybe get an incentive to put a higher offer in. All 4 agents said that if it wasnt for stamp duty they would value it at 260-270, and that I could get that price if there were two or more people particularly keen on it. They all seemed to think I would have no trouble selling at 250.

I was just wondering whether offering them 2% might be worth it if that higher price was achievable with a bit more effort on their part? If they thought 270ish was doable though, why not put it for sale at that price and drop down if need be?

Ian_W

Really jamie I think you'd be much better targetting your incentives towards the buyer rather than the agent. Anyone going over £250K knows that as well as the price they're paying the government is going to want an extra £5K in stamp duty just because theyre crossing the threshold. So someone who pays £250K ends up forking out £252.5, someone who pays £255 ends up paying £262.65, over £10K more for an extra £5K on your price. With the best will in the world and the most enthusiastic EA known to man only a complete ejit is going to do that!! It's the buyer who needs to find the extra money - not the EA.

If you really think your property is worth more than £250K, market it as "offers over" that price, or at £260/£270K but with the extra stamp duty paid by you. IMO it's the buyer who needs incentives to cross the threshold.

Doozergirl

An actual selling price website should help you in this instance, as there are many sales at £250k. Write down the addresses and go and take an objective look at the outside of each one and compare to yours. You will also see how many have sold at just over the £250,000 mark.

Be aware that at over £250k, you will stop exclude viewers that might otherwise buy at £250k; there's a massive psychological barrier at that point - even if the house is worth more, you can't sell to someone that won't come to see it.

I'm in total agreement with Ian W. If you're incentivising, offer 2% of the Stamp Duty paid to your purchasers. I'm surprised that the agents haven't already suggested it if the house is worth more. In the same position, I would accept the SD trap, market at £250k and look forward to a quick sale.

Good Luck, whatever you decide!