How much does your estate agency charge? It is one of the first questions a prospective seller thinking of commissioning your company is likely to ask before instructing you to sell their property.
Vendors and landlords regularly negotiate fees with agents. Why? Because more time than not, they know they will secure a discount on the agent’s quoted price.
As a result, British estate agents, at an average of just over 1%, charge some of the lowest fees in the world.
“The average commission in France is around 6%, which compared with the UK market sounds astronomical,” said Alice Watson-Smith, MD of Fine & Country French Riviera.
Speaking to Iain McKenzie, CEO of The Guild of Property Professionals, in the latest episode of The Home Stretch podcast, she added: “In relation to all the other countries we work with as a brand, the UK has one of the lowest commission rates in the world.
“In South Africa it is around 7%, whereas in Portugal, Spain, Hong Kong and Australia, it is all around 5% to 7%.”
Many industry leaders agree that estate agents across the UK are being underpaid for the job they do.
Watch the roundtable discussion that took place earlier this year – many of the challenges discussed are still relevant in the current climate.
Agents get paid small fees for What they do and Big fees for Who they are.
Aside from that, negotiation skills have all but disappeared in the race to increase transactions so most agencies aren’t worth a higher fee.
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Weak, unskilled lazy agents will win instructions with the highest ‘valuation’ and the lowest fee.
Lower fees equals lower income, less money to spend on marketing that property.
Their argument is boards breed boards.
The uneducated public feel this agent will net them the same selling price as other agents.
Some agents can’t negotiate their way out of a paper bag.
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I think if you look at the amount an estate agent has to do, they are generally under paid. But this is because there is such a low bar to entry into the market.
This is pure market economics, more money being made, more estate agents open!
That is why no government in this country will allow Estate agents to be licensed because they know that will drive costs up to the general public.
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Really?
EA are not sales people now
Walk past any agent and you will see them tapping on a screen not ringing people
Take a photo – go on rightmove – wait for an e mail
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that may be true of some but not all. This market is great IMO as only those agents that retain good habits of the past but embrace new data technology will win through. I do agree though -not enough actually speaking to people.
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jan-buyers lots of agents call people as well as emailing them back – change your agent – choose a proactive agent
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I do but there are very few out there
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Let us not forget the downward pressure on fees caused by the wide application of referral fees which has had such a distorting effect, to the detriment of truly independent agents and clients alike. Where fees can be derived from all the add-ons on which instruction winners are targeted, it is hardly surprising that sale fees have been discounted by the corporates to such an extent, when each instruction, no matter at what unsustainable valuation, is a potential cash cow.
By contrast a relative is selling his flat in Melbourne and the sale fees (1.8% + Taxes) trigger a separate fixed estimate for internet marketing that is not part of the no sale-no-fee agreement. Not sure how the UK public would react if we suggested we introduce a 10-12% increase each year for Rightmove alone, but it begs the question that perhaps we should separate the value of our services for sale (and obviously sale progression) from inescapable marketing costs.
We are underpaid and separating such costs may focus the mind of vendors on those agents who are truly effective, rather than the cheapest, as referred to above. Clients generally sell infrequently and so are very vulnerable to such tactics and have been since time began.
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An industry full of idiot agents who will take on an instruction for £400 because their board can be placed on a busy road. It’s been a race to the bottom and decent agents take up the slack on the progress chasing. Time “No Sale No Fee” was abandoned completely.
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Good luck telling people that when you are on a valuation LOL
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