What do estate agents actually do?

Mr_Singleton

Surrey_EA wrote: »

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

What experience do you have in selling £5 million houses in central London?

Your £1 million house is £100k down and what £3200/month. Expensive but not outrageous. As I’ve pointed out the above properties are £650k down and £24000/month. It’s a COMPLETELY different market.

I would be interested in picking your brains as an EA though..... how would you justify increasing fees solely on the back of house price inflation?

Comms69

Mr_Singleton wrote: »

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% - because house prices have grown above inflation??

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? - Maybe.

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?

No. Estate agents don't work for cost, they work for profit.

Comms69

Mr_Singleton wrote: »

What experience do you have in selling £5 million houses in central London?

Your £1 million house is £100k down and what £3200/month. Expensive but not outrageous. As I’ve pointed out the above properties are £650k down and £24000/month. It’s a COMPLETELY different market.

I would be interested in picking your brains as an EA though..... how would you justify increasing fees solely on the back of house price inflation?

1: £5m houses in London are everywhere.


2: you keep saying justify, no-one has to justify anything. Apple don't spend £1k making an iphone. It's a service you want, there's no obligation to use an estate agent

DoaM

What did the house sell for in 1974?

What was the %age commission in 1974?

Are you sure you've adjusted the amount correctly for the 45 years difference? (According to this website, £100 in 1974 would require spending £949.50 today. Therefore your £5,200 adjusted figure would equate to ~£550 in 1974).

Mr_Singleton

davidmcn wrote: »

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

Not an exact figure just going on relatives recollections but there’s a very strong feeling that the EA’s take is exponentially more.

AdrianC

Perhaps it is.

They knew it was 3% before the house went on the market.
They knew the asking price before the house went on the market.
They could have got quotes from other agents before they signed with that agent.

hazyjo

Mr_Singleton wrote: »

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?

The commission is part of what they earn. Do you think they should take 1970-odd wages too?! If 'of course not', why shouldn't the commission change too? I'm sure their salaries don't fit your [a]x calculations either. Not everything is increased over the years by X amount. Some things are worth less, others more. I remember the price of a video recorder being in the hundreds in the 1980s. Doesn't mean it would cost thousands now! If they're still making them, you could pick one up dirt cheap. Same for CD players. The price of a CD was prob the same in the 80s as it was in the 2000s.


Same for any service that you pay for. Inflation is not the same for everything. Simply doesn't work that way. Some things are pricier now, others cheaper.

Surrey_EA

Mr_Singleton wrote: »

What experience do you have in selling £5 million houses in central London?

Central London, none whatsoever.

Surrey, rather a lot.

It really isn't that different.

Mr_Singleton wrote: »

Your £1 million house is £100k down and what £3200/month. Expensive but not outrageous. As I’ve pointed out the above properties are £650k down and £24000/month.

In my experience may of the people in the market for a home costing serveral million don't need finance. They may borrow something, given how cheap money is to borrow at present, but very few are borrowing 90%LTV.

Mr_Singleton wrote: »

It’s a COMPLETELY different market.

I really don't think it is.

Mr_Singleton wrote: »

I would be interested in picking your brains as an EA though..... how would you justify increasing fees solely on the back of house price inflation?

Not sure there's a need to justify. We charge the market rate, as do our competitors.

Thrugelmir

Mr_Singleton wrote: »

how would you justify increasing fees solely on the back of house price inflation?

Have the Agents actually said that?

AdrianC

Thrugelmir wrote: »

Have the Agents actually said that?

Isn't that precisely what a static %age in a rising market is, though?