Estate agent selling fee

JustinTime19

2% does seem very high. Did this include VAT as all quotes I had from EA was excluding VAT.

It can be tempting to go with an EA who says they can get you a higher price.

Would that higher price be appropriate with this market and similar properties?

Getting a higher price could take longer to sell and doesn't mean that a bank would value that property at that price. You could have to renegotiate after the buyers mortgage company values the property and could bring you down to the value that the other EA's suggested.

EssexHebridean

2% is high for London - there is still a good deal of competition out there and 1% seems to be the standard still from what we are seeing. 

Also underlining being VERY careful about the terms of any contract - if the property didn't sell through the first agent you could well find yourself in a position where you were paying 2% to them, and a further 1% to the agent who does eventually manage to broker the sale successfully.

Exodi

Considering we often laugh about the fact that estate agents will just make up increasingly inflated sale prices to try win over a buyer from the competition, this thread is a clear testament to why they do it... it clearly works.

sixpence. said:

He seems to think he can sell at a higher price than the other agent

Of course he does.

Where does he envisage this premium coming from? Obviously if the default plan is to slap it on Rightmove and wait for the leads to roll in, then there's no reason his competition wouldn't achieve the same price. If you genuinely believe your house is worth a gazillion pounds like he tells you, then there's also no reason you couldn't ask a different (cheaper) estate agent to list it for that price.

AlexMac said:

Maybe it depends on local prices? I got 1% (admittedly 12 years ago) without negotiating 

You'd think given house prices have soared against inflation over the years, logically the percentage charge an estate agent might charge would have only gone down, not up.

2% is significant. But if the agent is as good as convincing buyers to pay over the odds, as he is at convincing the OP to pay over the odds, I say go for it.

Albermarle

You'd think given house prices have soared against inflation over the years, logically the percentage charge an estate agent might charge would have only gone down, not up

That was my thoughts exactly. If anything the % should be less in London than in cheaper parts of the country.

TheJP

If it is listed quite high for the market make sure the fee is based on the sold price and not the listed price i.e.

1. House listed at £300,000 - sold at £290,000 - EA fee based on £300,000
2. House listed at £300,000 - sold at £290,000 - EA fee based on £290,000

Although if the house does sell over the listed then the risk is you pay a higher fee than budgeted for.

sixpence.

Hello - thank you for your responses

Here is some more information:

- the standard fee in my area seems to be 1.5-2%
- he seems to have a clear strategy on how to sell the flat for slightly more than the other agents are offering (this involves only posting the flat on a couple of websites and getting the right buyer through the door)
- if he cannot sell it in 2 months and I can move on then I don't see what the harm is in trying him
- he is a partner in the agency he works for which seems like a good sign

Am I being lead by the nose? I'm not sure. He didn't have the slimy estate agent energy which was quite nice. My sense is that if he can answer all of my questions and contract checks out I should use him 

Here at the questions I'm going to ask him:

https://media.product.which.co.uk/prod/files/file/gm-401e2b00-5791-4cff-92d6-445eb41e5f97-5d2dbaf1c92a6-estate-agents-questions-checklist-2019-1.pdf 

Would anyone on here add anything?

Thank you for your time and help!

peterhjohnson

The only way he is likely to be able to sell for slightly more than other agents is for his "clear strategy" to get several potential buyers into a bidding war and for the other agents to be too lazy/unskilled to do likewise. I  suspect that if he can do that in the current market, he owns a magic wand :-)

It could be that he is particularly capable of getting more interested buyers with your sort of flat. EG, I once sold a property that needed modernisation and went with an agent who explained that he had built a mailing list of buyers who were looking for such properties  He quickly got me lots of viewings and 4 offers. His competitors just told me that they were better than him and suggested a slightly higher asking price.

JM68

If neither of the websites is Rightmove he is wasting your time.  On the other hand if 'only a couple of websites' is Rightmove and Zoopla then he is doing what 99% of all EAs do.

I agree with others that it sounds like sales BS.  He has no ways or means to get the 'right buyer' through the door.  It will go onto the property websites and people will view online and decide if they want to view the property.  When they do it may or may not be something they consider offering on.  What they offer will not be influenced by the EA, but what they think its worth.

In a subdued market, as it currently is, particularly for flats, its a common tactic of EAs to suggest a higher price than they know they are likely to achieve just to get the business, then tell you you need to reduce after a month or so.

With all that said.  If you like the guy, can see they have sold a number of similar local properties over the last year or two, and have decent enough floor plans, pics and descriptions on their listings, and think 2% is reasonable, and are happy with contract terms, then go ahead.

We sold our SW London flat about 18 months ago and paid just under 2%.  We thought that was reasonable because we liked everything about the EA.  We did not go for the agent who gave the highest valuation because we knew it was unrealistic, and did not want to be the property that keeps reducing price, for fear it signals we were desperate to sell. 

user1977

sixpence. said:

- he is a partner in the agency he works for which seems like a good sign

In what way is it a good sign? I could start an agency tomorrow and be a partner in it, but would probably be hopeless...

In any event he's not necessarily going to be doing the work once you've signed up.

Albermarle

sixpence. said:

Hello - thank you for your responses

Here is some more information:

- the standard fee in my area seems to be 1.5-2%
- he seems to have a clear strategy on how to sell the flat for slightly more than the other agents are offering (this involves only posting the flat on a couple of websites and getting the right buyer through the door)
- if he cannot sell it in 2 months and I can move on then I don't see what the harm is in trying him
- he is a partner in the agency he works for which seems like a good sign

Am I being lead by the nose? I'm not sure. He didn't have the slimy estate agent energy which was quite nice. My sense is that if he can answer all of my questions and contract checks out I should use him 

Here at the questions I'm going to ask him:

https://media.product.which.co.uk/prod/files/file/gm-401e2b00-5791-4cff-92d6-445eb41e5f97-5d2dbaf1c92a6-estate-agents-questions-checklist-2019-1.pdf 

Would anyone on here add anything?

Thank you for your time and help!

The EA has made you an offer and now time to make a counter offer. Offer him 1.25% and say otherwise you are going elsewhere. Probably you will end up in the middle somewhere.