What do estate agents actually do?

Thrugelmir

Mr_Singleton wrote: »

You go to a restaurant to celebrate an event. You choose s £50 bottle of wine. Why does the restaurant charge twice as much to serve it to you than it does to serve a £25 bottle?

Your choice to drink £50 bottles of wine. Any business will set it's prices to cover it's operational overheads and (hopefully) make a profit. No different to buying a cup of coffee or tea when you are out. Establishments differ widely in price.

AdrianC

Seems to me that the issue is simply one of %age charges, rather than fixed £ ones.

lees80

The fees they charge for each house might well differ, but swings and roundabouts. You are paying to some degree for access to their expertise - in your relatives case as you've already outlined, it is not a 'common' house price which means a tailored / appropriate selling service is needed. Access to the EA pool of potential buyers, that sort of thing. If I were looking for a house at that price bracket, I'd never think to walk in to my local independant agents but definitely would be looking at an agent with experience in that market.

The price your relatives paid in terms of fees is obviously excessive - but you've already set out the reasons why they wanted a quick sale.

Astar1809

Mr_Singleton wrote: »

You go to a restaurant to celebrate an event. You choose s £50 bottle of wine. Why does the restaurant charge twice as much to serve it to you than it does to serve a £25 bottle?

Most often the service charge is a percentage of the bill so yes the restaurant would charge you double in "service Charge" that it would for the cheaper bottle.

As you say selling a high value item is harder than a volume sale, its likely to get more attention than a for sale sign outside and listed on Rightmove.com, they will be marketing the home to a select clientele that will have been built up for years. You are not paying for the result but all the aspects that help the result happen too. but as others have said you can choose who you deal with, I am sure a local high street agent would have offered 0.5% to sell it but the service would be dreadful compared I would imagine.

Thrugelmir

Out,_Vile_Jelly wrote: »

They're providing the same services as in the 70s, but aligned to a digital age.

High quality brochures and advertising (Country Life etc) are still very much in vogue.

Sachs

OP: How can Estate Agents justify charging a fee of £130,000?!

MSE forums: That fee is completely unjustified!

OP: *tries to justify fee*

Surrey_EA

Mr_Singleton wrote: »

Anyway back to my original point.... why do people think that the EA's commission on the selling price hasn't moved with the times. Why are people with more time and less money putting up with it?

The commission paid by your realtives is highly unusual, both in terms of percentage, and £s.

I frequently deal with the sale of property over £1m, and I cannot recall the last time I heard of a fee of 2% being quoted, let alone 3%. Therefore, the situation in your example is not really an accurate reflection of what occurs these days.

Mr_Singleton wrote: »

The person that they bought the house from would have paid the estate agents a commission of around £5,200 adjusted for 2019 prices.

WHat percentage did the EA charge in 1974?

Thrugelmir

Surrey_EA wrote: »

I frequently deal with the sale of property over £1m, and I cannot recall the last time I heard of a fee of 2% being quoted, let alone 3%. Therefore, the situation in your example is not really an accurate reflection of what occurs these days.

The figures supplied by the OP weren't precise. Though one assumes that the total figure charged included VAT. This reduces the actual fee rate to around 2.5%.

Mr_Singleton

Boy is this frustrating!

I’ve no problem with the commission percentage what I’m trying to understand is why when the 1974 commission was paid and adjusted for 2019 prices is it so much lower than what was actually charged in 2019. For them to match the commission paid it would have had to be 0.11%

For a second let’s assume the sellers paid a 1% commission ie £45,000 that’s still 9 times the adjusted 1974 figure. Is the EA doing 9 times the work?

Again you can apply this to more normally priced houses. My first home is now worth 6 times more than I paid for it. Will it cost the EA 6 times the amount to sell it for the current owner?

davidmcn

How do you know how much the estate agents charged in 1974?