The Times has said that agents’ commissions are “hugely inflated”.
Property writer Jessie Hewitson’s article may well fan the flames of debate between traditional and online – and seems to come down firmly on the side of the latter.
Her piece is on how owners of expensive properties, are – apparently – “increasingly bypassing traditional estate agents” in favour of online ones.
She writes: “As the value of properties has increased by an average of 10.6% in the past year – for London home owners this figure is closer to 20% – why should estate agents’ commission, hugely inflated as prices rise, stay the same?”
The article quotes a seller, Mike Corby, with a £5.5m property to sell in West Sussex. He is using Sellmyhome.co.uk and has paid £499 upfront.
Sellmyhome was set up in January by former Knight Frank agent Will Clark, together with Henry Nash.
It currently lists three properties at over £3m, one at over £2m and four at over £1m.
Clark told The Times: “Since the advent of the property portal, finding buyers has become much easier for estate agents, but this hasn’t been reflected in the prices they charge.”
It is left to Ed Mead to put the case for traditional agents. He told The Times that people at the top end of the market like a personal service, “which they don’t get with the online model”.
However, what will be interesting to see is whether Mr Corby sells his £5.5m property through Sellmyhome– or whether he goes cap in hand to Clark’s old employers, Knight Frank.
The full article is online to Times subscribers at this link, where there is a brief preview:
http://www.thetimes.co.uk/tto/life/property/article4169438.ece
Comments about the article include:
“I had a flat valued recently by two online agents and two local agents. Both online agents were about 15% below what I eventually sold it for. Could have cost me a fortune had I not been more careful.”
And:
“There might be a problem with security if potential buyers have not been vetted by agents beforehand. I’m not sure I would be happy to show people round my house if I knew nothing about them. Email addresses and mobile phone numbers don’t tell you where they live or whether they have the resources to buy an expensive house, or are just rubbernecking. After all, it’s not just the house which is exposed to view but also its contents which, in the case of a high value house, may also be worth a lot. It’s also worth remembering that most agents have lists of potential buyers for properties; high net worth individuals probably won’t be spending their time trawling the internet for houses; they have other things to do. And no, I’m not an estate agent!”
Comments (4)
It is all very well to stay this because your the times. Estate Agents offer a No Sale No Fee. In many ways this means we work for free when a customer takes their property away. Running a business costs money and the ones that do sell cover our costs. We don't charge an upfront fee like the online agents do. We work hard to sell the property and are therefore entitled to our fee
Why should Stamp Duty remain the same???
Here we go again! When the market is on the floor, prices are static or falling and selling homes is tough we (traditional) agents get left alone by the media. When it turns the other way we are all unscrupulous, overcharging and the public needs saving from us by the online only community who are "sooo much cheaper!".
Don't forget, in retail, the most successful is John Lewis – they do both online and stores. Plus they tend not to major on cheapo prices, just good customer service.
I agree with you and also think the article is a classic example of lazy journalism, but there is 1 point that factually is correct. If house prices go up at a much higher rate than inflation(which they often do), then our fees (if worked on a %) are "hugely inflated"….what the article doesn't talk about is how much lower than inflation our fees were during the last long recession (and recessions before that)!