Estate Agents - to cut fees, or increase them?

[mortgage_advisor]

Firstly, I will always find them the best product and the client has no incentive to go elsewhere. I inform all my clients of what the best deals are, and I always tell them to speak to their own bank and current lender first to see what they offer, and inform them of any direct to lender deals as well, as if we can't beat them there is no point coming to us. That is part of the advice process and looking out for your clients best interests.

It's different because from my initial conversation with a client, I know whether or not I can get a mortgage for them, or certainly within a day or two. I don't take on the client and say I will be able to get you a mortgage some time within the next few months and then just see if I can do it.

With selling a house, a client comes to you because they need to sell a house, you then tell them what the property is worth and state that you can sell it for them. I look at a clients circumstances and show them the optimum way of raising finance, there is know uncertainty there based on what I tell them. In your case, the client has no real idea what their house is worth beyond what an agent tells them, and you are then responsible for selling it. It is completely different. There is no risk for the clients in talking to me, and on the occasions where it is more difficult for a client to raise the funding they require, I explain to them exactly what the difficulties are and what the risks are so they can make an informed decision.

I have no incentive to state that I can get a better deal than I actually can, as if I do, the client will expect it, and within a week or two they are expecting the offer. And also, at that point a client starts spending money on solicitors fees and valuations, and the client would be very unhappy with me if it all falls through down to me misinforming them.

With an EA, you do have that incentive as it gets you the client in the first place. You can then simply stick the property on websites and in your window and hope someone likes the look of it. If it doesn't sell, you haven't lost much, but the client may have lost 3 months while they were expecting you to sell the property.

I firmly believe that at a specific price, any property can be sold within 3 months. As an example, look at an average 1 bed flat (say typical price on that street is around £100k). If you put it on the market for £10k it will sell in a heartbeat, likewise at £20k. At £100k it may be a bit more difficult, and at £750k it probably isn't going anywhere. The point being, property sales are very price dependent, and it is your job as an AE to price the property correctly. If you do price it correctly, the property will sell, and if you don't then it won't.

So with EA's, you have complete control (via price) of whether or not the property sells, you have an incentive to inflate the price and a small cost if it doesn't sell, and the client is completely dependent on you and your information and could potentially lose out majorly if the sale of their property dictates future actions and you fail to sell it.

With mortgage advisers, we have no real incentive to misinform the client, we are heavily regulated to ensure best practice, we can explain in great detail the likelihood of a particular product being obtained,and the client does not lose such a large amount of time if I fail to deliver what I have promised.

Also, in the example are stated above, you do secure long-term business from the client, as long as you can deliver on your promises.

[mortgage_advisor]

As for the specific fees, the actual figures are irrelevent. The concept is the point being discussed.

[googler]

I hardly need to - type "estate agency 0.75%" into google, and most of the first page of search results are from agents offering 0.75% - in England.

I'll find some Scots soon.....

[googler]

Press report of 'typical 0.75%' ...

It's all over for the offers-over system, say estate agents - Scotsman.com News

[googler]

An advertiser here says they'll discount to 0.75%

Retired Police Officers Association (Scotland)

[googler]

Need I go on?

[mortgage_advisor]

who are the biggest estate agents in england?

Lets call the top 5 and ask, I will do some research now.

[mortgage_advisor]

OK, no idea who the biggest are, so I have called up a couple from different areas that I know well enough to be able to blag that I am selling a house there, here are the rates I have been quoted:

Haart - essex : 1.5%
Tudor estates - essex : 1.5%
Savills - cornwall : 2.5%
Lillicrap Chilcott - Cornwall : 2.5%
Jeffries - Portsmouth : 1.35%
Pearsons - Portsmouth : 1.5%
Beals - Portsmouth : 1% christmas special
Your move - Portsmouth : 1.5%

[mortgage_advisor]

Oh yeah, all plus VAT.

[brian]

Sincere apologies for the thread going off-topic - some people have far too much time on their hands.

Now removed the disruptive member, and his profanity.