An online agent has prompted a backlash from high street firms after claiming sellers are wasting million of pounds by not haggling on fees.
A poll by Housesimple of more than 1,000 sellers claims that 82% agreed the first fee offered to them, with 55% paying at least 1% and a quarter agreeing to between 1.4% and 2%.
Four in ten were unaware that they could have negotiated their commission fee, said Housesimple, with 29% wishing they had negotiated a lower rate after they had agreed it.
Sam Mitchell, chief executive of Housesimple, said sellers could potentially be saving millions of pounds every year in fees if they were prepared to negotiate with their agent. For example, he said, haggling a 1.25% fee down to 1% would equate to a saving of £1,500 on a property on the market for £500,000.
He said: “The survey highlights how much home sellers could potentially save by negotiating and not taking no for an answer.
“There is always room for manoeuvre on the fee and an estate agent that is not willing to reduce their rate will need to have a very strong case as to why, particularly if it is significantly higher than other agents are quoting in the area.
“Unfortunately, for many people, they don’t feel comfortable haggling, and estate agents are extremely good sales people who can put forward a convincing argument as to why they are worth the commission they are charging.
“But at the end of the day they also want to secure your business, and if they are as good as they say they are, then your house shouldn’t be on the market for long, and they will have had to do very little work to make their commission.
“High street agents are living in the past, charging exorbitant fees and not doing enough to justify their meaty commissions. Consumers want value for money, and are, quite rightly, asking ‘why am I paying an agent thousands of pounds for listing a property on Rightmove and managing a few viewings?’”
However, EYE asked some high street firms what they thought about the claims.
Mark Rowe, of RPS Estate and Letting Agents, said Housesimple should concentrate on its own business rather than highlight others.
He told EYE: “Housesimple’s fee is also lower than most, so what’s the worry? Why the need to force home the narrative of high street agents charging too much?
“Sellers have the choice and they make their choices on the different service offerings. What should be highlighted is the cost to a seller of using an inexperienced, out of area, ‘whack it on the internet’ agent, in terms of their achieved sale price.”
Paul Cooney, sales director for Chiswick agent Horton and Garton, said: “I don’t engage in ‘fee wars’ with other Chiswick agents as I’m secure in the value of my service.
“Every property and every seller is different. I assess each valuation on a case by case basis and allow for flexibility depending on various factors such as the client’s expectations, the valuation and the saleability of the property in question.
“I do have a threshold that I will not cross when it comes to fees, and sticking to my guns cost me a listing last week. I told the vendor to come back to me in a few months when they’d been jaded by the process of working with my competitor. I would never close the door in frustration on a potential client.”
Ken Hume, of James Alexander, said: “Most agents will negotiate their fees, but bear in mind you are asking a company to obtain the best price for your home and that means you should expect that they are good at negotiating their own fees
“If they crumble easily on their fee, how easily might they crumble on your asking price?
“The best agents will be charging more.
“Of course, sellers want the best possible deal and that’s right and proper, but the best agents can obtain higher fees than the worst, so do negotiate but bear the above in mind.
“We structure our fees according to how much work is required to sell the home, so a keenly priced popular area will be at a lower fee.”
‘Yah dee yaddah!’……
You get what you pay for?
We had a chain with an onliner the other day, went to chain check and the (Local Property expert) informed us, ‘why do you need to know about the three people below us in the chain, it’s got nothing to do with you or your buyer?’ And that’s why he hadn’t bothered to take their details…….
Needless to say we didn’t recommend the offer to our client!
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These press releases are normally indicative that a company is struggling. If i were HouseSimple i would be focsuing on…
An issue with the system as many “newly listed” properties seem to have snow on the garden
Almost 20% of their listings have been there since 2017
Only 29% of their stock is showing as under offer.
If you are as good as you say you are, why are these properties for sale for so long, and so many properties remain unsold. Is this why you are cheap?
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The main difference here is of course that many reputable high street agents actually like to run a business that makes a profit (that’s how it used to work in the old days otherwise you would go bust) unlike many of the on-line companies who like to just keep raising other people’s money instead of making a profit
I would love to see the list of the agents who charge 1.25 – 2%, I bet it would be a very short one.
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Paul Cooney has it 100% on the button. Life is hard on the High Street and the temptation is to chase turnover by dropping fees only to find after a lot of hard work that the income doesn’t cover the expenses or leaves a tiny profit.
Work out your service level.
Set it out in clear terms.
Price it accurately so there’s a profit.
Train your staff to work to and understand the service you offer, to sign up to it and to believe in it (empathy for the client is the big key element).
The High Street is then a happy place.
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It’s all very good and well saying how high street agents are overcharging and how much you could save using an onliner. When you are LOSING millions upon millions with very little to show for it.
Are you running a charity?
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Says the man who used to work for rightmove, you couldn’t make it up!
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“A poll by Housesimple of more than 1,000 sellers claims that 82% agreed the first fee offered to them.”
I would argue that those 82% of sellers should NOT use online-only listers. If those sellers are unable to haggle with an agent over a few hundred pounds then they have no chance of pushing up a prospective buyer’s opening offer, potentially earning them (tens-of-) thousands of pounds.
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I would call Mr Mitchell’s comments “b@llsy”.
By ‘b@llsy’, I mean he can clearly spout b0ll0cks as good as the best of them.
It’s quite a surprise to me that the chap apparently has cojones…
…he kept them well out of harm’s way when tasked with #portaljuggling issues in his last job.
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“For example, he said, haggling a 1.25% fee down to 1% would equate to a saving of £1,500 on a property on the market for £500,000.”
Mr Mitchell clearly can’t do basic maths. Should he be in the position he’s in?
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Maybe Mr Mitchell meant to say haggling a 1.25% +VAT fee down to 1% +VAT would equate to a saving of £1,500. Of course, agents should not be quoting fees like this and any housesimple fee-comparison tool should not assume we do.
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“Maybe Mr Mitchell meant to say haggling a 1.25% +VAT fee down to 1% +VAT would equate to a saving of £1,500.”
Maybe Mr Mitchell did “mean” to say that – but the fact is that he didn’t say it, and therefore his alleged figure is out by 20%.
Wonder what .@ASA_UK would make of that? I’d call it false or misleading by a material degree.
I dare say a certain EYE poster would like to jump on this – he seems to enjoy reporting these things.
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On second thoughts – maybe it’s not one for that poster.
GENUINE cases of misleading don’t seem to ruffle his feathers in the slightest…
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I see where Mr Mitchell fits in well with the company – maths doesn’t appear to have been their forte before he joined.
On their website, under the heading
“See how much you can save”
they are showing a “saving” of £7045 – based on a property value of £670,000 – and offering the following explanation for that “saving”:
“Based on 1% average high street estate agency fee and our No Sale No Fee package value. figures correct as of 20/09/17.”
Oh, dear.
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Their average(only)fee is £829! Payable on completion… I may be missing something here, but I can’t see the figures stacking up in this market!
I would suggest House Simple are envious of those who can command a proper fee. I’d imagine their investors are getting rather twitchy.
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“Consumers want value for money, and are, quite rightly, asking ‘why am I paying an agent thousands of pounds for listing a property on Rightmove and managing a few viewings?’”
Jeez, Mr Mitchell – is that REALLY ALL your company do? It must be – in order to make such a statement you need a measure… which it would be reasonable to expect be that of your own company – would it not?
The thought that HouseSimple do as much for customers as to slap a property listing on Rightmove and “manage a few viewings”** must fill your present and future customers with
**I note with interest your use of the wording “manage a few viewings”, Mr Mitchell. NOT “accompany a few viewings”. Because HouseSimple don’t ‘do’ accompanied viewings as part of your “One simple price” – do you?
It’s an extra. A further charge. Just one of your “Optional services”. £35 a pop – or all-inclusive for £295.
I would say that your statement is as much a Ratner moment as any I’ve seen of late.
Moreso, in fact. At least Ratner was being upfront.
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Can I just point out that this is a company that still refers to advertising its’ listings on Globrix –
housesimple.com/globrix
and FindAProperty –
housesimple.com/findaproperty
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