why do estate agents charge so much to sell houses?

Albermarle

incus432 said:

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. 

In other words they have to deal with all the hassle of working with the Great British Public, some of whom can be unrealistic, aggressive, difficult to contact, involved in their own emotional world, struggle to talk about money issues sensibly etc etc
Then they have to deal with solicitors moving at snails pace, problems with surveys, leasehold issues etc etc.

Hoenir

flaneurs_lobster said:

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.

Could apply to any number of organisations not merely estate agents......... dress code isn't what it used to be. 

powerspowers

flaneurs_lobster said:

Take a couple of pictures of your house and shove it on Facebook.

Job done.

Is this still available? 

baser999

Our mother died Boxing Day last year and we had her retirement flat to sell, valued around £130k. Bumped into an agent viewing another flat on the complex and took his card. Called the agents and was told by office staff their fee would be ‘£3000 to include vat’. Suggested that was a lot and he went on about what they’d provide by way of marketing blah blah. Arranged for valuer to visit and when he was there we asked again about fees and was told it was a flat rate 5% plus Vat. Needless to say we politely declined his offer to charge us £7800! He’d no idea why we’d been told £3000 🤔 Instead we went with an agency dealing solely with retirement places and are being charged £2000 plus Vat. They marketed through Zoopla, On the Market etc and found a buyer inside a fortnight. So that’s saved us £5000 😀

Murphybear

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.  

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. 

Many use specialist software.  That is not cheap.   Don’t forget commercial bank charges and commercial unities are much higher than domestic. 

flaneurs_lobster

powerspowers said:

flaneurs_lobster said:

Take a couple of pictures of your house and shove it on Facebook.

Job done.

Is this still available? 

Sold     .

Mutton_Geoff

Until agents move away from the "no sale, no fee" model, the costs are bound to be high, although in Europe, the cost is generally much higher.

AI says "Estate agent fees in Europe vary significantly by country and agent type. In the UK, they are generally considered to be among the lowest, with fees typically ranging from 1% to 3% of the sale price, often paid by the seller. In contrast, countries like France, Germany, and Spain can have fees ranging from 3.5% to 10% or more, sometimes split between buyers and sellers". 

As much as I dislike estate agents, the last two houses I've sold, the chosen agent has obtained much more than original valuations from 2/3 other agents and achieved above asking price by a big margin of a multiple of their fee.

I remember when the big names (Savills, Knight Frank etc) used to quote 3% plus VAT. Now they are down to c 1% with the mainstream/Countrywide lot.

My last sale, the agents fees were over £27k inc VAT. The solicitor, who did much more work for their money, £3k.

Herzlos

The good agents do a lot of work, and the cost of the work sort of scales with the value.

For example, a £100k bedsit requires signficantly less measuring, photographing and viewing than a £600k 4-bed house with gardens.

The expectation of quality, and screening increases with value too.

A percentage fee also gives the customer confidence the estate agent is going to seek the maximum price for the property, though the comission different is usually trivial.

I think we paid 0.9% for our last sale and would happily do that again if we ever move.

Albermarle

Herzlos said:

The good agents do a lot of work, and the cost of the work sort of scales with the value.

For example, a £100k bedsit requires signficantly less measuring, photographing and viewing than a £600k 4-bed house with gardens.

The expectation of quality, and screening increases with value too.

A percentage fee also gives the customer confidence the estate agent is going to seek the maximum price for the property, though the comission different is usually trivial.

I think we paid 0.9% for our last sale and would happily do that again if we ever move.

It is often commented on this forum, that agents are more interested in getting the sale, than fighting for the last £20K, as the difference to them is only £200.

Herzlos

That's what I was trying to express. If you don't run the numbers it sounds like they'd be motivated to get every penny.

Just like it's usually not worth buying a new car to save on VED. It seems like a good idea until you do the math.