Letting Agent crazy 'credit search fee'

Zelie

Can you pay the credit reference agency the fees and have them mail the results to the agency? Might be cheaper and easier.

Jowo_2

Zelie wrote: »

Can you pay the credit reference agency the fees and have them mail the results to the agency? Might be cheaper and easier.

What you are actually asking is if the agency minds losing out on a great deal of money. If the agency has lots of tenants looking, they'll probably just knock it back on the grounds that the next tenant will pay them in full without a quibble.

It's the equivalent of going into McDonalds and saying "I'll have a big Mac but would you mind if I supped my own can of coke because it only costs me 50p - your drink prices are inflated."

Sure the OP can try and negotiate or find an agent with lesser fees.

jimbob_too

Jowo wrote: »

It's the equivalent of going into McDonalds and saying "I'll have a big Mac but would you mind if I supped my own can of coke because it only costs me 50p - your drink prices are inflated."

It is NOT the equivalent of that at all. The practice of Landlords charging such high fees is the equivalent of going to pizza hut, paying £15 for your meal and then the waiter charging you a £50 'knive and fork rental fee' as he brings out the food. Of course you could walk out at that point but you've been waiting half an hour already and are getting hungry.

When searching for flats to rent the consumer shops around by comparing the monthly rental price for the property on offer. THAT is where an honest letting agency should be making their profit - by negotiating their share of the rent with the landlord. The whole issue of fees only comes up when the customer has already spent days looking at places and the only reason that the agency can get away with charging such exorbitant rates is that the customer is often tired out from flat hunting and cannot face going through the whole tedious process again. Plus unlike a customer at a fast food restaurant they are unlikely to use the same agency again to search for another flat.

It is a horrible practice and creates a lot of bad will towards letting agents, in my opinion. In fact, the last government were finally taking steps to end this practice but it has now been shelved by the Coalition

Jowo_2

Apparently when the housing market for sales collapsed, estate agents tried to restore their profits by increasing the upfront fees associated with letting.

If the agents are then barred from collecting these letting fees, they will up their fees with their landlord. The landlord will then either put the rent or start charging admin fees to tenants if the agents are barred from doing so.

One way or another, the tenant will take a hit.

jimbob_too

But at least if the agency fees are aggregated into the rent, the customer (i.e. the person renting the flat) can compare the rent between different flats from different agencies. I think that this would be preferable.

Another option would be to force the agency to include the fees in the advertised rental rate i.e. £800 a month AND £250 set-up fee AND £150 annual agency fee. I wonder why they don't do that? :think:

As it stands, the agencies do their best to hide their fees until the last possible moment in the process. Furthermore, some agencies charge a recurring fee on an annual basis. It's a deceptive practice, which deserves to be exposed.

Fatenbread

underlay_guru wrote: »

Hello, hopefully someone can help me out here.....

I have found a property I wish to rent via an independent estate agent, but before they consider us they want to do a credit search on us (normal procedure I know). To do this they want a fee of £117.50 per applicant, and have given us the forms to fill in........the forms have the name of the credit checking agency they use at the top, so I thought i'd contact them to find out how much it would cost to do a credit check independent of the letting Agent: their standard fee for the full check is only £15!

....So someone feel free to correct me here, but the estate agent is trying to majorly rip me off here: they want £235 inc vat to credit check my wife and me, but I know that their fee to the credit agency will be only £30 inc vat. Can anyone advise me how I may get this fee reduced? Can I simply go to the credit agency myself and present the search result to the estate agent? Don't get me wrong, I'm not denying an honest profit for the middle man , but charging me £117.50 for a service that actually costs them £15 is crazy.

Go back to the agent and tell them you are refusing to pay it. Either they waive the charge or you walk away. The 10% of the rent they get will surely be enough for them to do this for nothing. This has worked for me in the past.

Don't pay for the credit checks yourself unless the agent agrees that this will be an acceptable substitute for the £235 - you're just chucking away another £30 if the agent won't play ball.

If the agent refuses to waive the fee, and you are as pig-headed as me, and walk away out of spite at that point, try and find out the landlord's identity (land registry search or recent planning applications) and see if you can go direct. No agent fee = lower rent (in theory).

Fatenbread

jimbob_too wrote: »

But at least if the agency fees are aggregated into the rent, the customer (i.e. the person renting the flat) can compare the rent between different flats from different agencies. I think that this would be preferable.

Another option would be to force the agency to include the fees in the advertised rental rate i.e. £800 a month AND £250 set-up fee AND £150 annual agency fee. I wonder why they don't do that? :think:

As it stands, the agencies do their best to hide their fees until the last possible moment in the process. Furthermore, some agencies charge a recurring fee on an annual basis. It's a deceptive practice, which deserves to be exposed.

IMO the hidden fee situation (with agent fees included in the rent, and rents readily comparable between towns, areas and properties) is preferable to the more transparent alternative that operates in the US - tenant pays the agent fees up front and agent fees are 10%-15% of the annual rent...

PasturesNew

I was credit checked at £176 for just me ... total cost to move in (had to pay 6 months up front and the deposit) was nearly £3k.

If I were to rent a place now, I'd be looking at £4k up front. Kind of makes me not bother.

underlay_guru

hi,

I paid the fees in the end....mainly because the wife fell in love with the house and didn't want to let it slip through her fingers. Im still of the opinion that the fees are crazy though. Like I said in a previous post, I can appreciate they are a business and would not deny them making an honest profit, but 200 pounds plus for a service they pay buttons for is not good.

Ste_C

underlay_guru wrote: »

again, I am not denying the right of the agent to make a profit, but nearly 700% profit??! Sure, they are a business with overheads, but so are Tesco.....and you don't see them selling bread for £20 a loaf do you? The only 'costs' I can see the having to spend is 10p to send the fax.

It's nowhere near 700% profit.

Firstly, their income here is £100 per application - not £117.50. The VAT is the Government's.

So that leaves £85 difference.

It'll take someone time to check your application and have it sent, as well as adding it to your file and doing low level admin. As well as factoring in other costs such as their office rent, advertising, utility bills, telephone etc so that will leave them with a target profit margin to aim for per sale.

You say you don't see Tesco selling bread for £20 and you're right. But they are still making a huge mark up on a loaf which cost pennies to produce. Most goods we buy are sold at way above cost price.

They are entitled to charge you whatever they wish. You are paying a premium for going through an agency.