Estate agents commission on valuation price?

secret-stu

Hi,

I am about to put my house on the market and it’s been 5 years since i last sold/purchased and I have had a load of estate agents around to value the property and been told how wonderful they all are and the others are all rubbish!! Any how I feel I have been lied to because during the course of the conversations with them they give me a valuation and basically said they want to get as much for the place as possible as that’s what I would want plus they get more commission . But when reading the legal documents I now see that everyone of them charges their commission on the valuation price and not the actual sale price??. That is not how it worked last time I sold a house ,they got commission on whatever it sold for as with this system they are in a win win situation as they can well over value my house and get paid commission on it even if I have to drop say £50,000?
Is this how the market works now?

Stu.

Rain_Shadow

Tell your chosen agent that you want their commission based on the sold price and ask them to amend their contract to reflect that.

Dan-Dan

I`m confused , they either agree a percentage of the sale price , i.e 1% or something ,usually payable on exchange or completition , or they agree a set fee regardless of sale price and again , payable on exchange/completion
Plus VAT dont forget

Are you saying you have had estate agents round who say your house is VALUED to them at say 500k , and they will take a % from that , even if the house sells for 250k ?

Sounds wrong to me , sure you have readi it all properly ?

TrickyDicky101

No - when I sold 2 years ago, only one of the EAs I had round to value the place charged on the basis you mentioned (ie their 'valuation' price). They were shown the door very quickly.

Tell whichever EA you want to go with that you will only agree to fee % on the actual sale price. Make sure the contract is updated to reflect. If they won't allow this, choose another EA.

TrickyDicky101

Dan-Dan wrote: »

I`m confused , they either agree a percentage of the sale price , i.e 1% or something ,usually payable on exchange or completition , or they agree a set fee regardless of sale price and again , payable on exchange/completion
Plus VAT dont forget

Are you saying you have had estate agents round who say your house is VALUED to them at say 500k , and they will take a % from that , even if the house sells for 250k ?

Sounds wrong to me , sure you have readi it all properly ?

When I was looking Sequence charged on this basis. Unbelievable isn't it?

Dan-Dan

Yes!!!!!!!!!!!!!

Seabee42

I have to say when putting my house up for sale one of the local estate agents said that was how they worked.

Fixed price based on the initial sale price. Apart from the obvious con of fixing their commission and giving them no financial incentive to get you a better price (which I do not agree with), I do wonder whether it is to try and get sellers to set a reasonable price to start with.

Anyway I went with a different estate agent who was more conventional which I preferred (so far so good).

googler

secret-stu wrote: »

I feel I have been lied to because during the course of the conversations with them they give me a valuation and basically said they want to get as much for the place as possible as that’s what I would want plus they get more commission . But when reading the legal documents I now see that everyone of them charges their commission on the valuation price and not the actual sale price??.

...

with this system they are in a win win situation as they can well over value my house and get paid commission on it even if I have to drop say £50,000?

But surely if they do succeed in getting you as much as possible, and the sale price is higher than valuation, then their commission will be based on the lower amount, that being a win for you...?

hazyjo

I bet they charge to get out of the contract too (even after the expiry date). Otherwise, surely people would just take it off the market if it's not sold, and put it back on at a lower price.

Read that contract very carefully! I have sold (or used EAs) several times and never found one who bases their fees on valuation.

Jx

greatgimpo

If you really want to go with that estate agent, and that's 'their rules', accept it but demand to pay a lower percentage of the valuation price than what they offer.

Everything is negotiable.

secret-stu

Dan-Dan wrote: »

I`m confused , they either agree a percentage of the sale price , i.e 1% or something ,usually payable on exchange or completition , or they agree a set fee regardless of sale price and again , payable on exchange/completion
Plus VAT dont forget

Are you saying you have had estate agents round who say your house is VALUED to them at say 500k , and they will take a % from that , even if the house sells for 250k ?

Sounds wrong to me , sure you have readi it all properly ?

Yes ,read it over a few times to make sure, it says the fee with is 1.5% (after beating them down from 2.0% ) of the valuation price and that it will not change regardless of the actual sale price .Now if my house sold for more than the asking price then I would be quid’s in but THAT is not going to happen in this lifetime!