why do estate agents charge so much to sell houses?

sheramber

Estate agent fee is the same whether the house sells in 6 weeks or 6 months. I had a house sale take 2 years when the market was really slow. 

In the meantime they have to pay staff, pay running costs, travel to assess the value of the property, pay to list the house online  with Rightmove etc, organise visits and possibly conduct them.  Pay an accountant to submit tax returns and pay tax  before having any money to live on.

My estate agent also negotiated  between myself and buyers.  She had confirmed their ability to proceed with buying , or not in one case. 

She regularly worked long hours. 

All for 1% of  the price - they do not keep the VAT. 

Not all house will be valued at 600k. So her income from fees will vary. 

You can sell yourself but a private sale neighbouring house sat for 6 months with no sale, was then listed with an estate agent and sold in a month. The adjoining semi listed at the same time and sold in a month as well. 

Take your pick. 

Smalltownhypocrite

I don't think 1% is very much at all.

They have to PAY to upload to these online sites, for their offices, for there staff and they photograph/professionally write up, do floor plans, they deal with buyers in a timely manner, they manage viewing, they can do the showings/open days for you, they contact lists of active buyers looking for houses like yours to promote your house and for all of the they might not even get paid if your house is !!!!!! (filthy, horded, stinking etc...) or you insist on over pricing it and no one wants to buy it.

Just look at the awful posts on purple brick where people have attempted to write and photograph their own houses and you will see just how much EA do. It one of those thing where people THINK 'but I can do that' but their own attempt at doing it is amateur, laughable and doesn't work.

financies

I don't think time is very relevant for the estate agents costs, since their fee is not related to the time the object is for sale, just to the realized price. Also just time doesn't accumulate the costs significantly, only the handling itself. In Holland you can book an estate agent for doing only some specific limited actions, you can advertise yourself (if chosen, via specialized websites), do the valuation and viewings yourself, etc. The only thing you can't avoid is the notary for making the transfer in the Dutch land registry. It would be more fair if the estate agents would be paid by the hour for the actions performed. In Holland their power/necessity is in their exclusivity of access to the major national house-selling website and as a result speed of matching parties. A sale there can be done in a week or two, in Amsterdam the average sale time (all-in) is 41 days.

Stubod

I do wonder why they charge a percentage rather than a straight fee?

Does it cost them more to sell a million pound property as it does a £200k house??

Bookworm225

Stubod said:

I do wonder why they charge a percentage rather than a straight fee?

Does it cost them more to sell a million pound property as it does a £200k house??

there are agents who charge a flat fee. It is a business model which has a very chequered success rate both in terms of the EA actually remaining in business and/or vendor feedback on the sort of service they get. 

have you not heard of Purple Bricks??

grumpy_codger

Smalltownhypocrite said:

.....professionally write up, ....

Don't get me started....

user1977

Stubod said:

Does it cost them more to sell a million pound property as it does a £200k house??

No, but their services are obviously worth more to one seller than the other. 

Hoenir

Rent and rates, insurances, telephone and internet, copier rental, Rightmove charges, vehicle leasing along with petrol and insurance, property signboards, printing and stationary,  office equipment repair and purchase, staff payroll including employers national insurance and pension,  staff training,  bank charges along with overdraft charges, covering staff sickness, maternity and paternity leave, electric and gas.  

That's a hefty up front amount of expenditure to commit too before  property sale even completes. 

Not to mention the amount of time wasted dealing with window shoppers. 

flaneurs_lobster

Hoenir said:

Rent and rates, insurances, telephone and internet, copier rental, Rightmove charges, vehicle leasing along with petrol and insurance, property signboards, printing and stationary,  office equipment repair and purchase, staff payroll including employers national insurance and pension,  staff training,  bank charges along with overdraft charges, covering staff sickness, maternity and paternity leave, electric and gas.  

You've forgotten the staff uniforms of ill-fitting blue suits and pointy brown shoes.

incus432

1. EAs are often willing to negotiate on price. The ones we approached ranged from 0.7 to 1%. 

2. Some will sell for a fixed fee and we chose that option. Worked out at 0.8% of the final selling price

3. A good agent will do a lot more than 'sticking it on Rightmove'. They will filter out timewasters /assess buyers' situation and credibility (this is pretty vital and many personal sellers dont feel comfortable doing it*), take photos (maybe even use a professional), conduct the viewings, do the negotiations (see above*) and when the sale is agreed chase up and down the chain to chivvy solicitors and buyers.