GetAgent says it has enabled Hunters to complete on 1,000 property sales, helping the agency generate an estimated £4.4m in commission.
The comparison site puts home sellers in touch with agents in their local area based on percentage of asking price achieved, average sale time and number of properties listed within the radius of the property. According to the company, this has helped over 800,000 homeowners find an agent since 2015.
Founded in 1992, Hunters Estate Agents operates across key markets such as London, Bristol, the Midlands, Manchester and East Anglia.
According to GetAgent, it has helped the agency brand to secure over 1,700 instructions across its 180 branches. The comparison site has now announced that Hunters has completed on its 1,000th transaction coming via the GetAgent website, with the most expensive property selling for £2.1m via Hunters Stoke Newington.
Based on the current average fee of 1.2%, GetAgent estimated that it has helped Hunters secure £4.4m in sales commission as a result.
Rob Smith, managing director ofHunters, commented: “We’re thrilled to see the success Hunters has achieved with GetAgent and we’re looking forward to the next 1,000 completions.”
Colby Short, co-founder and CEO of GetAgent, said: “We’re delighted to reach this massive milestone with Hunters. There are so many great agents within the group and it’s been our pleasure helping them extend their reach and grow their businesses. Here’s to the next thousand completions.”
Is this business an unbiased comparison website or just simply a lead generation service for agents like Hunters prepared to share a large portion of their fee with them?? IMO they are misleading the public
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As an agent when you inform the client how much of our fee goes to these people they are shocked. Are they really sending the seller in the direction of “the best agent” or the agents who are willing to give up a huge proportion of the fee. Do not like them.
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So, Hunters paid GetAgent over £1m worth of referral fees.
GetAgent charge 0.25% of the selling price. The article states that the average fee charges is 1.2%, so the agent gets 0.95% plus VAT of the selling price.
£4.4million in commission at a fee of 1.2% equates to about £370million pounds worth of property.
Let us assume that Hunters are selling average properties at roughly £250,000 each, then GetAgent provided them with 1,480 transactions.
That’s about 8.2 sales per branch per year at a cost of roughly £6,100 per branch per year.
On average, each transaction therefore cost about £743 in referral fees!
Surely, with a branch network the size of Hunters, they could spend £1.1million on social media and supporting local good causes that would create positive publicity that would generate both short-term and long-term results that are WAAAAY better than this…
But of course, it requires thought, and effort, and the results are harder to measure.
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It’s an incredibly fragile business model that would be quickly undermined if someone put their mind to providing a genuinely objective agency recommendation service as a Brucey Bonus to support another service offered to agents.
Inflating commission payable or agents taking a sizeable 23% hit on commission banked (all the normal profits) isn’t so good for the agent’s principal or the agent themselves. Agents are effectively working to not quite cover their fixed costs, or they’re missing out badly on the excessive profit they’d earn if they had the nerve to ask the client for a bigger commission.
Here’s the Business Case:
The Real Numbers: Average Agency Fees Are 1.08%, Not 1.2%—Here’s What That Means for Profits
Referral companies promote the idea that 1.2% is the average agency fee, but in reality, the average commission is now around 1.08%. With this, we can assume a standard profit margin of 20%. If you’re considering raising your fees to 1.2% based on this outdated figure, here’s how it impacts your profitability across four scenarios:
Charging 1.08% with a 0.25% Referral Fee: This leads to a loss of 0.05%; your profit after paying the referral fee isn’t enough to cover your fixed costs.
Charging 1.08% with No Referral Fee: This results in a small profit of 0.216% since your full revenue helps cover costs and leaves you with a normal profit.
Charging 1.2% with a 0.25% Referral Fee: This gives you a small profit of 0.19%. The higher fee helps offset the referral cost, but it’s still not as much as it could be.
Charging 1.2% with No Referral Fee: This results in a much healthier profit of 0.336%. By keeping the entire fee and avoiding referral costs, you maximize your earnings and comfortably cover all expenses. This is 1.56 times the profit you’d make at 1.08% with no referral fee, and 7 times the profit compared to charging 1.08% with a referral fee.
Consider the Value of the New Service:
Now, consider this: a new service is being offered to agents for just £100 per month per branch, and it includes a truly objective referral service at no additional cost. This is far more cost-effective than the £842.50 you would pay at 0.25% commission on the average transaction price of £337,000. By opting for this new service, you can avoid paying large referral fees while gaining access to valuable additional services for a fraction of the cost.
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