MSE News: Guest comment: Buyers and sellers are being ripped off by agents

captainhindsight_2

googler wrote: »

So in any discussion about Estate Agency, those in the industry are forbidden from comment?

THat tends to be the consensus with a lot of people on Mse. If I mention anything about construction or heating I get hounded by the same 2-3 people.

chewmylegoff

car0line123 wrote: »

Does someone know where this "charging a buyer fees" come from? (England). I've never heard of it until today.

There were some reports of it a while back when the London market was going nuts - a few EAs were demanding that buyers sign a contract promising to pay a % fee to the agent if the offer was accepted - otherwise the offer wouldn't be out forward. I don't think it is widespread and now that the London market isn't as mental as it was at the start of the year, the practice seems to have gone away.

That said, if you google it, all the articles (from earlier in the year) seem to be about Stella Creasy MP taking a stand against the practice... Perhaps a straw man for her to champion the battle against.

julie777

I have always felt as a tenant that the renewal fee is extortionate.
It was creeping up slowly to £91 in June. In December they want £115 which I have protested about. They claim it is competitive for the area (Bournemouth). Our rent is also going up to £1050 (det 3bed). I am pretty certain they charge the landlady for renewal too.
I wouldn't mind paying so much if I knew they only charged one of us! They do virtually nothing during the year - checked that we are looking after the place once in 5 yrs. The gas safety check is always late.

Does anyone else in Bournemouth have renewal prices for comparison?

googler

julie777 wrote: »

I have always felt as a tenant that the renewal fee is extortionate.

Does anyone else in Bournemouth have renewal prices for comparison?

Isn't the thread about buyer and seller fees?

TrixA

chewmylegoff wrote: »

There were some reports of it a while back when the London market was going nuts - a few EAs were demanding that buyers sign a contract promising to pay a % fee to the agent if the offer was accepted - otherwise the offer wouldn't be out forward. I don't think it is widespread and now that the London market isn't as mental as it was at the start of the year, the practice seems to have gone away.

That said, if you google it, all the articles (from earlier in the year) seem to be about Stella Creasy MP taking a stand against the practice... Perhaps a straw man for her to champion the battle against.

Having just bought a house in Walthamstow where Stella Creasy is the local MP, I can tell you there's a good reason why she's making an issue of it. The market here went mad during 2013 and early 2014, with prices rising 30% in a year (the largest rise in any London borough I believe). There were desperate buyers queuing for any available property. Into this environment, two of the major local agents started promoting 'sale by tender' with the buyer paying a 2% 'introduction fee' to the agent, even though the process was otherwise pretty identical with no additional effort for the agent. This was clearly very popular with sellers and soon the majority of properties for sale by these agents were sale by tender.

As buyers we made a decision not to view any sale by tender properties, mainly because we didn't want to buy from the sort of seller who thought it was fair for us to pay the agent's fees for them. I imagine others would feel similarly, so the practice only works in a market with a surplus of buyers over sellers.

What has happened since is that the market has quietened down dramatically, and the practice has all but disappeared. However, I would still like to see it regulated against for much the same reason I favour regulation of other practices that exploit desperate people with limited options (payday lenders spring to mind). I would not want it to become an accepted practice in the way letting agent fees charged to tenants have. I agree with the earlier poster who said that stamp duty thresholds also need looking at - we are FTBs with no family assistance and had to pay more than £12,000 from our hard-earned savings for a very ordinary London property - but I don't think it's an either/or.

Wisefool

Hi Stella, I believe both the buyer and seller were charged when we sold an inherited bungalow in a prime residential area 20 miles west of London to a developer.

We'd had a number of offers and accepted one. This fell through for genuine reasons (planning concerns). This was when CGT (capital gains tax was about to increase from 18%.. possibly to 50% the media said, so we were motivated buyers and the agent knew this.
He went back to those 5 or so developers that had made offers. Strangely all but one were no longer interested. We dropped the price £50,000 (8.4%) and sold to that one developer on the eve of the budget.

A large sign then appeared in the garden saying "acquired for clients". It had the name of "our" estate agent on it. ....(we thought we were his clients!!

Complained to agent. Rec'd email reply denying a second fee was paid or anything dishonest had been done (the issue here for those not aware is that the estate agent should work for their client's best interests and in this example I believe they had a conflict of interests... and possibly the a longer term relationship took priority in this case...)

I now regret not reporting to the property ombudsman, so good on you Stella it is about time such practices were made illegal. Feel free to PM (private message) (I hope this is possible in this forum) me if you want to use this as an example.

boo-hoo

We run a Letting Agency and are also Landlords. We charge the Tenant for a Credit Check of £75 and that includes the drawing up of the Tenancy Agreement. We charge Landlords 6% of the rent. The amount of work involved with some Tenants doesn't always cover our costs. As Landlords we have had a couple of awful Tenants who left the houses in a state. This means having a month or 2 with no rental income and paying out for repairs. Not all Landlords or Letting Agents are ripping Tenants off. Whilst I accept that Tenants need protecting from unscrupulous Landlords / Agents legislation seems to be one sided and offers no protection to landlords

Mikeeuropa

eddddy wrote: »

This is ridiculous.

All that's needed is clear transparent pricing. For example, Agents' contracts should just say:

Estate Agent 1
We charge sellers 1.5% and we charge buyers 0%

Estate Agent 2
We charge sellers £200 and we charge buyers 2%

Estate agent 3
We charge sellers 0.5% and we charge buyers 0.5%

The government shouldn't be 'micro-managing' / 'micro-legislating' like this - they should be addressing this type of consumer issue at a much higher level.

They should be legislating to make sure that all businesses (including Estate Agents) display prices clearly and fairly, and much more importantly, helping to educate people to be 'savvy consumers' who can make their own optimal decisions.

Nope, wouldn't work, you say "Agents' contracts should just say..." well as a buyer you don't have a contract with the agent, neither do you get a choice (as a buyer) of which agent to use. This would lead to a clear conflict of interest, as my selling agent he/she is being paid by me to market the property and also get the best price possible. As soon as a fee from the buyer comes into the equation there's an incentive for the agent just to get a sale through (at whatever price), get both lots of commission in and move on to the next deal asap.

And, as a buyer, just what exactly am I paying this agent for anyway, to make a phone call to the seller with my offer?! - after all the seller is already paying the agent to market it. And, as a buyer, if I'm paying the agent a fee I want him/her to act on my behalf and get me the property at the best price possible - back to the conflict of interest argument now!

KTF

The buyers fee appears to be some easy money scheme that some of the agents invented to earn more revenue.

If people actually paid it, then more fool them.

Mikeeuropa

minislim wrote: »

i for one feel disappointed that MSE is becoming a political advertising platform for the labour party!

i thought it was neutral but this is the second so called "guest comment" in weeks from them that's been angled at them lobbying to appear as if they're here to help!

utter nonsense!

when things like this where happening in their time in the previous government!

they didn't do anything to help back then!

and they especially didn't do anything to help the "lack of supply"

please can MSE stop being used in this way!

What does it matter what colour her badge is?? If it was a Tory/LibDem/WhateverPartyYouVoteFor MP would the article be OK then?

I don't care what political party she's in, the point she is making is absolutely right, the practice of charging both parties leads to a conflict of interest - simple.