Estate Agents Fees

keith969

bryanb wrote: »

Presumably on a similar basis to your car (or other) insurance where those who don't claim subsidise those who do. Any other way would put the provider out of business.

Actually its not that comparable - insurers want to keep their costs down, so they can be competitive and remain in business. So they charge according to percived risk, which is why a 17 year old's insurance is so high. Another method they use is to offer lower rates if you pay a higher excess, on the basis that drivers who are careful and do not expect to have an accident will risk a higher excess compared to those who are more likely to claim. Then again there is the no claims discount, again to penalise risky drivers. There's no similar pricing vs. risk (of failing to sell) with estate agents.

bryanb

keith969 wrote: »

Actually its not that comparable - insurers want to keep their costs down, so they can be competitive and remain in business. So they charge according to percived risk, which is why a 17 year old's insurance is so high. Another method they use is to offer lower rates if you pay a higher excess, on the basis that drivers who are careful and do not expect to have an accident will risk a higher excess compared to those who are more likely to claim. Then again there is the no claims discount, again to penalise risky drivers. There's no similar pricing vs. risk (of failing to sell) with estate agents.

I do understand your point, but was trying to point out the fact that in business those who buy things (or insurance) have to cover all the providers costs if they are to continue in business. That even extends to covering the costs of painting the office, changing the logo, whatever. So in estate agency customers have to pay for time wasters.

googler

keith969 wrote: »

Why should I subsidise other sellers who turn out to be timewasters?

From another thread updated today -

"We had three EAs to value the house, I already new which agency I would use but got the valuations. The agency which we used did make the highest valuation"

So to extend our discussion, if the agents' fees don't pay for the two wasted valuation trips, how will they be paid for (in terms of agents' time, petrol costs, etc)?

ognum

googler wrote: »

From another thread updated today -

"We had three EAs to value the house, I already new which agency I would use but got the valuations. The agency which we used did make the highest valuation"

So to extend our discussion, if the agents' fees don't pay for the two wasted valuation trips, how will they be paid for (in terms of agents' time, petrol costs, etc)?

Thank you for quoteing my post! You are right about the REAs that didnt get the deal but what I didnt add is that if another agent had offered a better deal I would have maybe taken them.
As it was they all really wanted to sell the house, houses here are in short supply and sell fast. One offered me 0.7% if they sold at asking or below 1% if above I then negotiated a better deal with the EA I wanted. I offered the others a chance to beat this they refused.
Good EAs spend a lot of tme building relationships, they do not just want to sell one house for you but to sell repeatedly for you and your family and friends. If you get a good relationship it is actually worth more than a few percentage points reduction in the costs. The long established EAs I know spend many hours discussing the right time to sell a house and know of people who want to sell but are not on the market and can create sales.
The answer is dont choose a flashy fly by night EA because they are cheap choose an established firm that know their market well.