Estate Agency Fees - What are they for?

redwineguzzler

Basically - MONEY FOR OLD ROPE!

mewbie_2

If it were that easy there would be lots of estate agents, and competition would drive down the price. How many per month are the average agent currently selling? How many staff, what are the rates on their properties? Dealing with idiots all day who want the maximum for their sh1thole, even though the property market is screwed, and if they fluke a sale want to pay the minimum on the next one. Being polite to these people.

Go on then - have a go.

btw - I'm not an estate agent.

Romani_Ite_Domum

Don't forget that a lot of estate agents do all of the above for nothing when they can't sell so they have to get the money back some how.

I have sold houses in the last 6 years. The first went through 4 agents in 18 months and I sold it myself with a simple net ad. So they all incurred costs for nothing.

The second went through 4 agents in 32 months before selling with the final agent. So 3 of the 4 incurred all the costs for nothing.

In my experience estate agents are pretty poor at selling houses!

oneeye1

PasturesNew wrote: »

My agent got £4000 when I sold. For that they advertised it in the local papers, I even featured as Property of the Week once; they are there to answer the phones and make appointments; they have an office with a main street frontage that displays my house details; they accompanied viewings (although I did do some) - probably took them 25-35 hours of staff time just to leave the office/do the viewing/get back; they put the property on Rightmove -which is pricey.

It looks like money for old rope, but you don't have to use an EA... do it yourself and see.

there too answer phones now that has made my day im now wondering why when im paying them they never answer or return calls never mind to prospective buyers they are a joke the lot of them unprofessionall except in lying

MissMotivation

googler wrote: »

Let's assume your agent has a high-street office in your home town. Buyers and sellers will visit this office, your property will be displayed in the window, and there'll be staff or agents inside to take enquiries from the public, and a means of recording those enquiries. You say one of the PAs at your work could take calls, but - the PAs at your work don't have a high-street estate agency office, I'd wager.

The 1% has to cover a proportion of the rental or purchase cost of the office, business rates, telephone and internet bills, heating, lighting, utilities, furnishing (and renewal of same at intervals), cleaning, maintenance, etc. Even the window cleaner who comes by every Thursday has to be paid for out of the various one percents.

Let's assume the agent gets a professional printer to do the window cards and schedules; they probably get a volume discount from the printer that you wouldn't get for a one-off job for just your schedules, so your 1% effectively pays for 'access' to the volume discount.

A preferential rate probably applies to any newspaper advertising the agent does, so even though you're being billed separately for the advert itself, your 1% gets you the benefit of the discounted rate.

Assume your agent has their own website, and subscribes to a portal or two. All the costs here have to be met out of the 1.00% too.

Getting down to the individual agents' activities - the first stage is the valuation - factor in travel, preparation and time for ALL the valuations the agent does. The 1% for the business they DO get has to cover all these costs in the business they DON'T get.

Once you've agreed to go with a particular agent, they need to measure up your house, photograph it, get the details to the printer for the schedules, and to the websites and portals. Figure out how long that takes, figure out what you currently get paid per hour, and work out a cost for these acitivities, and allow for that in the 1%

If your agent is doing the viewings for you, add in travel, petrol, time, etc for getting to and from your house

Someone once said - "Sometimes when you pay an estate agency fee, you're paying for access to the person the agent spoke to yesterday"
On the assumption that the agent has spoken recently to someone who's looking for your house, or something very like it, how much would you pay for immediate, instant access to that person? Figure out a sum, and include that in the 1%.

As other posters said, your agent, if doing the job right, should have a pool of buyers who've expressed interest in certain style, price of property and should be able to dip into that pool when your house is available. Can you put a price on how much work goes into keeping these people on tap?

They also act as a 'filter' between you and the great general public. Allocate some time to this, apply your hourly rate to it and allow for it in the 1.00%

They liaise with buyers and their agents and their solicitors on your behalf. Allocate some time to this, apply your hourly rate to it and allow for it in the 1.00%

I could go on, but once you've put a figure on all of the above - would you be happy with what's left from 1.00% as your salary?

Googler......you're a star!

Cissi

Like everything in business, it's the law of supply and demand. Most people make a fundamental mistake when estimating what something "should" cost: they assume that the end price is based on the actual cost of providing the goods or services in question. Wrong. It's entirely based on what somebody is willing to pay for it. If that sum is too low to run a viable business, then you walk away and eventually close down. If it's profitable - well then you have a good business model. It's as simple as that. If it was "easy" money there would be more competition (and EAs wouldn't be cutting down on staff!) - the market regulates itself.

Don't forget that the profits have to cover all costs of running the business which stay pretty much the same whether each EA sells 3 houses or 30. Ok, they can - and do - cut staff in lean times, but they have to keep a minimum on just to tick over, and a lot of other costs are fixed. I doubt any of them are lining their pockets at the moment - the ones that still have jobs are thankful to have them (which isn't to say that they all deserve them)!

googler

To the OP - you've asked, we've all speculated, but - you could just ask the agent who provided the quote....

confused31_2

80 percent of buyers who buy a house first see it on right move, ive never looked in a window of a estate agent, ive phoned a few up to try and get viewings, a lot of the time i havent got through.

Use a online estate agent their fees are about 0.5% and they get you on right move and the ones i have used always answer the phone, when they are open.

As for viewings i have had four local estate agents and they have not one assisted or even offered to do viewings.

My personal opinion of estate agents, especially local ones are all they do is come round do a few photos and a description of the property, and then most of them want to just sit on their bums all day day to charge a massive fee.

I mean the most time they will spend with you is when they do the photos and the description, but even a big house this should take no longer than 2 hours.

so for less than them doing a days graft they are taking between 1 and 2 percent of your house sale, i dont think they are worth it thats why i wont use a local estate agent ever again.

Cissi

confused31 wrote: »

... so for less than them doing a days graft they are taking between 1 and 2 percent of your house sale, i dont think they are worth it thats why i wont use a local estate agent ever again.

So I take it you've sold your house by now then? Congratulations!

confused31_2

I work and im paid hourly now if a estate agent sold a house for 200,000 pound and was charging 2 percent, they would make 4000 pound from the sale.

How many hours do you think they spend on advertising and trying to sell your house, the most time is the first visit and when you instruct and they take the photos.

If you paid them the first 8 hours down for the first two visits, now even if they spent the next two years answering phones to arrange viewings, i still dont believe, they would spend a week at doing 8 hours a day on your house and if they did to sell it they would be on a rate of 1000 pound a hour.:eek: