2% estate agent fee....they won't budge!

timmyt

oceanscape wrote: »

Hi all,

We are switching estate agents but I am getting a little concerned about our new agent's proposed fees.

Our current agent is one of those "fixed price" agents who charges £2,000 plus VAT. However, we have not been happy with their service or marketing of the property.

The agent we want to change to is without a doubt the market leaders in our area. They seem to sell ALL properties in our price band and have big offices with lots of staff. However, they are charging 2% plust VAT.

Our house will be marketed for £400k so that's nearly £10k. We have debt up to our eyeballs and a huge mortgage to pay off from this move, so I'm worried that this fee is just too high.

What should we do? We stayed firm in the negotiation but they would not budge from 2%, saying that they usually charge 2.5% so we have already got a reduction. We really want them to sell the house, and I believe they would do a good job, but is it worth 2%?

2% is too high in this climate...and 2.5% is just taking the michael.....down to 0.75 % I have heard from some!

Market Leaders means National. I have heard of nationals who have a rep for over valuing to get you in to using them, they then charge a fixed fee (so lose all interest in making sure you get best price because they are going to get paid their agreed fee, even if it sells for a fiver) and because they fail to secure the over valuation price, your property stays on the market too long...longer than it would had you gone to a local indepedent estate agent....and so along comes a clever buyer and pays even lower because of the lenght you have been on the market. Lose Lose Lose.

I would ALWAYS use a local independent estate agent who charges a commission, who has his finger on the pulse, who doesn't pretent your proeprty will be shown in all windows of the national estate agency which clearly does not happen, and who will strive to get best price for you and them (as they get a higher fee) and they care about their reuptation in the local community ascritique and loss cannot be covered by a national name.

But hey, use a National and we look forward to your second post!:eek:

googler

property.advert wrote: »

No, not at all. The cost to the vendor comes out of their salary, net.

OK, at 2% they are looking at £12,000 which is 697 hours or 17 weeks or about 4 months salary.

The fact that the fee is business income to the agent is immaterial as it is only the cost to the vendor which it material and that comes out of net salary.

It is material - you're drawing a direct comparison between the fee paid to the business (from which the agent's salaries are drawn, and of which they form a part), and a number of hours at a certain salary level.... which is comparing apples and oranges.

zappahey

timmyt wrote: »

2% is too high in this climate...

I don't particularly carry a torch for EAs but I would have thought that fewer overall sales would be translating into higher individual fees in order to generate enough income to survive.

Add the longer selling times into the mix and I would imagine that "this climate" would be pushing the %age up.

Meatballs

timmyt wrote: »

2% is too high in this climate...and 2.5% is just taking the michael.....down to 0.75 % I have heard from some!

I would ALWAYS use a local independent estate agent who charges a commission, who has his finger on the pulse, who doesn't pretent your proeprty will be shown in all windows of the national estate agency which clearly does not happen, and who will strive to get best price for you and them (as they get a higher fee) and they care about their reuptation in the local community ascritique and loss cannot be covered by a national name.

Don't be fooled into thinking that commission = aims for a higher price.

Earning 1.5% on a 200k house would get them £3000, but they only lose £300 if you drop to 180k (£2700). It's much more important for a business to keep getting the £2700s on a regular basis than a few £3000s after months of waiting.

timmyt

Meatballs wrote: »

Don't be fooled into thinking that commission = aims for a higher price.

Earning 1.5% on a 200k house would get them £3000, but they only lose £300 if you drop to 180k (£2700). It's much more important for a business to keep getting the £2700s on a regular basis than a few £3000s after months of waiting.

yes, in this climate, tactics to just get any comission is rife...but watch out for the Nationals.

thanks for the specific, but % means fight for price, set fee = no motivation for fighting for a decent price......and watch out in the current climate for selling agents who secretly tell buyers that sellers are up for offers, when that is simply not the case.

timmyt

zappahey wrote: »

I don't particularly carry a torch for EAs but I would have thought that fewer overall sales would be translating into higher individual fees in order to generate enough income to survive.

Add the longer selling times into the mix and I would imagine that "this climate" would be pushing the %age up.

business suicide in this climate where everyone is reducing prices and offering better service.

agents have broken eanks and gone are the days of all agents charging the same. fight for survival in this marketplace....quite right too, brings out competition for such a small pie of deals.