Giving the estate agent a rocket deal

Thefunkygibbons

Having read Freakonomics, I remembered what the authors had to say about Estate Agents and their incentives verus the interests of the vendor

So once I was comfortable with the valuation, we agreed the following structure

£700k - £725k 1%
Over £725k 10% on any amount above this level

In addtion, fixed £1000 if we agree that the service provided was in line with expectations

Not sure how common a deal this is, but if it helps focus the mind at the EA, I am relaxed

silvercar

The £1000 is too hard to agree on. Go with the 10% on anything above £725k.

Your problem is that 1% of something is better than no sale.

Running_Horse

What do you think the house is actually worth in this market?

Thefunkygibbons

Running_Horse wrote: »

What do you think the house is actually worth in this market?

The guide price of £750k is reasonable, but of course, most people would start with an offer, so hoping that the structure encourages the agent to keep it above £725k

PancakeP

Thefunkygibbons wrote: »

. . . so hoping that the structure encourages the agent to keep it above £725k

It's not the agent who's making the offer though is it? it's the potential buyer.
I don't pay much attention to the estate agent's spiel when I work out what I think a property is worth. It's what it's worth to me that matters and I offer accordingly. If that's not enough for a deal then I walk away.

princeofpounds

It's as much to do with which buyers an agent shows to a property as it is any sales patter. An individual buyer might not be that swung by an agent, but if the agent is bringing the richer, more urgent buyers here early, not delaying any appointments and therefore missing a buyer etc it can all help.

Running_Horse

So they get an offer of £740,000, which means £8,750 commission. Or they get £7,000 for encouraging a buyer to go for the lowest figure you have suggested you might accept.

If you were an agent working fror a chain and looking for your sales target, which would you go for? I suspect they are more interested in churn and turnover than pushing for that little bit extra.

Nice idea though. Let us know if it works.

Thefunkygibbons

It is not a chain agent, local independent with good local reputation who sold ours last time we moved, and who we bought our last 2 moves through

System

Considering the price the house is being offered for and then the very narrow range for the additional incentive, I doubt they would be sufficiently incentivised to bother making you much more money.

Doozergirl

We've just agreed a deal with an EA. The house sits between three offices really so while one is looking after it, we've asked for window space in each of three offices, that a neg from each office comes out to see. They have a commission split system so other offices won't get as much as if the original office sells it so we've offered £200 directly to the negotiator that seals the deal for us, regardless of office. In this area, negotiators only really get £25 personal commission for a sale, so hopefully that will get us their direct attention if it's the same value to them as selling 8 other houses, and potential interest from buyers that might be looking in other areas.

I'm not keen on the additional incentive for offers over a certain price because I think the market is so price sensitive at the moment that I don't want agents only going for higher prices as buyers genuinely don't think the house warrants the price, they won't pay it. I don't want incentives that might work against us, iyswim so we're just opting for one that will hopefully bring us the most possible number of viewings and we'll deal with the price negotiation when we're lucky enough to be in that position.

tyllwyd

Is VAT included in the 1% and 10% figures quoted? If not, it will work against you.