How do Estate Agents make money?

ognum

G_M wrote: »

Until June 1st.......

Post June 1st they will still have management fees and someone will be paying the letting agents to reference, sort out Agreements and credit check. I guess that will be the LL but they will still get the money.

I know you already know this G_M!

Owain_Moneysaver

ddavemac1981 wrote: »

My understanding is that EA's fail to sell as many as the succeed at, and surely by over-pricing properties they are shooting themselves in the foot? How do they pay for photos, online listings, paying their staff for viewings etc, when there is no guarantee of a sale?

Most houses sell eventually. The agent will get the commission if they introduced the buyer, in most cases up to a year later.

Once it's on Rightmove etc I expect the ongoing fees are minimal - it benefits Rightmove to have lots of houses on it.

You've forgotten the other sources of income though:

• Commission on introducing the seller to a conveyancer
• Commission on introducing the buyer to a conveyancer
• Commission on introducing the seller to a surveyor for home report or EPC as applicable
• Commission on introducing the buyer to a surveyor

And the absolute biggie

• Commission on introducing the buyer (and sometimes the seller as well) to a mortgage advisor

In many cases a mortgage introduction will result in ongoing commission for the duration of the mortgage. :rotfl:

Gwendo40

Owain_Moneysaver wrote: »

Most houses sell eventually.:

Wrong.

Half the properties brought to market subsequently get withdrawn after failing to achieve a sale...

https://www.propertyindustryeye.com/almost-half-of-homes-taken-off-market-not-sold-but-withdrawn-losing-agents-over-4bn-in-fees/

lisyloo

We got an offer of full asking price 2 days before going to market, but the buyer was already on the EAs books.
So they got an easy sale plus at least 2 properties in the chain.

Some sales will be easy, others longer.
They must prIce to cross subsidise and for those where they don’t get a sale at all.

Owain_Moneysaver

Gwendo40 wrote: »

Wrong.

Half the properties brought to market subsequently get withdrawn after failing to achieve a sale...

https://www.propertyindustryeye.com/almost-half-of-homes-taken-off-market-not-sold-but-withdrawn-losing-agents-over-4bn-in-fees/

From the comments:

This report does not say that they take their houses off the market and never move, thus wasting agents money.

and similar.

And if the agent has snagged the buyer into a mortgage introduction, the agent may continue to get that mortgage commission even if the buyer eventually buys a property from another agent.