Payment Upfront/No commission Estate Agents

googler

JimmyTheWig wrote: »

But the point is that you know about these factors

How can you expect anyone (agent or otherwise) to know what the banks, building societies, other financial institutions, other economic factors, are going to do next week or next month?

EA markets your house based on current situation on 1 Feb at £50k

and, for example

Mortgage rates go up on 10 Feb
Lenders require 30% deposit, not 25%, from 1 Mar
Greece (for instance) goes bankrupt on 1 Apr, with ripple effect through Eurozone and on to house prices
FTSE drops like a stone on 1 May with ripple effect to other areas of economy, including house prices

House could then sell for £41k.

You're expecting all of this to be taken into account at the outset, and the value to be set at £41k taking into account what, at that point, were future events?

OR

House goes on the market at £50k. Someone can buy it at £48k IF they sell theirs at £45k. They accept an offer on theirs at £45k, but a few weeks later, their buyer's lender won't give their buyer the deal they were quoted on, so they have to reduce their offer by £5k to £40k. The person offering at £48k now can't move unless they offer £43k on the first property. Whose fault is this, apart from the lender's, for changing their mind after the first property went to market....? How does anyone factor this in?

googler

JimmyTheWig wrote: »

But the point is that you know about these factors

The whole situation started with/around the time of the problems with sub-prime lending in the USA spreading to the market over here, and the Northern Rock crisis (amongst other factors, but generally..)

Are you really saying that every EA in the land should have seen this coming, and adjusted their asking prices accordingly?

JimmyTheWig

googler wrote: »

Are you really saying that every EA in the land should have seen this coming, and adjusted their asking prices accordingly?

No, I'm saying that at that point the agent should offer to cancel the contract (including tie-in period). The vendor could then go to a different agent (e.g. if they feel that the first agent just got the first valuation wrong and no longer trust them, or feel that the first agent just gave a high valuation to get the business, or feel that the first agent just can't be bothered to market the property properly) or accept new terms (e.g. 9% of anything over 35k) with the original agent.

Obviously the vendors could keep the contract that they had signed up to, but I can't see the agents then doing much to try to sell the property.

googler

JimmyTheWig wrote: »

But the point is that you know about these factors ............. I would expect an honest agent to come round and say "It's probably worth about £50k, but given the current financial situation........

How long do you think the 'current' financial situation remains current? Do you think it remains as a constant for the duration of your sale, or do you think it's a variable?

JimmyTheWig

googler wrote: »

How long do you think the 'current' financial situation remains current? Do you think it remains as a constant for the duration of your sale, or do you think it's a variable?

I think that in the general case it is reasonably predictable for the duration of a estate agent contract. In some cases, as I have responded about earlier, it isn't.
The last time we sold a house was 7 years ago. We decided on our agent. It felt like as soon as we were outside of the cooling-off period in the contract (i.e. as soon as we were tied in to that agent) they wrote to us and suggested we brought the asking price down "in line with movements in the market".
Now, I'm no expert. But I do keep half an eye on what's happening. As far as I was concerned there had been no movements in the market in the few weeks between the initial valuation and the suggestion to drop our price.
To me, the only thing that had changed was the fact that we were then tied in to that agent.

The drop in asking price made very little difference to their commission. It made a great difference to us.

googler

Dare I suggest that 2005 doesn't stand close comparison with 2012, and that 2005 was likely to be far more predictable and stable than 2012 ?

JimmyTheWig

You may suggest exactly that, googler.
So why do you think my estate agent changed his mind after only a few weeks in 2005?

note_2

googler wrote: »

So, are you suggesting the EA shouldn't have been paid at all?

Also, you're a relative of the buyer - how do you know what the seller agreed to pay their agent?

well, all i'm saying is they didnt sell the flat, we knew what she wanted and it came up, they get thousands and they didnt even have to put up a board.

yes, related to the buyer as i said in my post.

and i know the percentage as we have used the same agent in the past.