Let’s discuss Estate Agent fees…
Why is it that estate agency fees vary? Why is it that some estate agents charge more than others? Why, when you call to ask what they charge, do you feel like they avoid your answer, making it feel like you are literally going around the houses to get your answer? It really shouldn’t be like this, should it?
Last week, a lady called up asking what we charged. I replied with a very straight answer, asking her if I could explain what that actually included. She was happy to let me. I spent a few minutes highlighting our service. I let her know we only get paid on results, that there was no hidden costs and certainly no lengthy tie in period. She would not find anything alarming in the small print. We are in fact what I like to call a no risk estate agent! Having had this conversation, I asked if she would like a free home consultation with me. She replied yes, that would be very helpful indeed. She thanked me for my clear response, letting me know, I was only agent who offered her a direct and clear answer. This lady is now a client of JDG.
Her issue with estate agents unwilling to disclose their fees got me thinking. The conversation we had about the value for money different estate agents offered played on my mind. This lady wasn’t looking for the cheapest estate agent out there. Nor was she looking for the one who valued her home the highest. She was looking for one which she felt she could trust, one she felt she had confidence in and one who could demonstrate how they were going to do it. We refer to this as the selling process.
Does your estate agent offer value?
There is no denying that estate agents fees differ greatly. I’ve found locally they seem to vary from £795 up to 2% + vat. The question is what are you actually getting (or not getting) for the fee they charge. Estate Agents may like to tell you we are all the same, however I must stress we are not! What is important to you? Getting the best price for your home or simply paying the cheapest fee? Do you want to work with a motivated estate agent or one which is paid minimum wage and therefore possibly won’t have the interest in your home or even you, that they should have? Estate Agents which charge more, generally do so for reason. They are often spending more on marketing your home. They are creating more opportunities for you. They often sell your home quicker. Often for a higher price. Everybody wants to feel valued. Everybody wants value. We want it too.
A true story
This is a true story of two houses on the same street. They were both for sale this year. They were very similar in terms of size, presentation and what they offered. The biggest difference I can see looking at the photos would be classed as personal taste. Let’s call them house A and house B.
House A went up for sale for £160,000. We believe this agent charged 1% +vat
House B went up for sale for £155,000. This agent charged 1.5% + vat
House A sold for just £140,000.
House B sold for £152,000
*information regarding asking and sold prices is taken from data on Rightmove
Using basic maths, which agent do you think did the best? Which client received the best service? Who was financially better off? We don’t know the personal circumstances of the owners regarding House A. Maybe the house had survey issues. Maybe they were happy accepting a low offer! This difference does however seem huge. We do know about house B though, as we were the agent which sold it!
A great deal
We all want the best deal. However when it comes to choosing an estate who will be responsible for selling your biggest tax free asset, you need to pick the best you can afford. When choosing, ignore the fee for a moment. Who would you choose if they all charged the same? Who is best estate agent for your home?
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