Author Topic: How estate agents justify their existence and high fees.  (Read 7172 times)

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How estate agents justify their existence and high fees.
« on: July 31, 2015, 07:05:46 am »
How high street estate agents try to justify their existence and high fees

After getting a local estate agent to visit my house for a valuation I received their standard follow up letter the next day. To justify their higher commission fees they stated:
Occasionally some are tempted to select the agent offering the cheapest fee which can be a false economy. We don’t pretend to be the cheapest estate agent but do we [sic] strongly believe that our service, combined with the quality of our marketing exposure for your property, represnts the best value for money compared to our competition.

Occasionally?  Surely those daft enough to still choose to use a traditional high street estate agent will ask the cost and choose the cheapest. After all, they all use Rightmove, Zoopla and MyProperty as this is now the main way people choose to look for a home.

This was also confirmed by this agent in justification for their higher fees:
Your property will be seen in all the best places with our comprehensive online and print media advertising covering an extensive range of websites, social media, newspapers and magazines.

The other "benefits" are all offered as standard by the far cheaper online alternatives such as Purple Bricks (£800) and House Simple (£600) 90% less than the fees charged by this agent.

Even the agent's "valuation" was at least £25,000 less than what could be realistically achieved. This demonstrating he was more motivated in an easy quick sale (the first to view would buy at this valuation) rather than "working in my best interests to achieve the best possible result in any given market"

This was further demonstrated by the price they intended to charge for the Energy Performance Certificate (EPC) an astonishing £85 plus vat!  A quick "google" revealed I could get this done for just £39.95 including vat. Energy Performance Certificate Quote

Working in my best interests? – Yeah right - none of them do!

New Home Expert

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Re: How estate agents justify their existence and high fees.
« Reply #1 on: July 31, 2015, 09:00:49 am »
I know what you mean Carol. 
I have written an article for the blog regarding "valuations" of 'secondhand' new homes.

It appears estate agents are classing all homes on completed developments as equal for valuation purposes.
For example, all the different 4 bedroom house type variations are perceived to be an equal market value, irrespective of whether the house has the added benefit of a study or utility room, double garage or second en suite.
This takes no account of the price per square foot, or the price variations originally achieved by the housebuilder.
The same price deviation percentage must be applied to properly calculate the achievable market price, reflecting the different desirabilities and benefits between the house types on an estate.
Clearly all 4 bedroom homes on an estate are not the same and therefore cannot be the same value!

By doing so the agents are attempting to keep asking prices down and homes on completed estates, whilst described as a "popular development" are deemed to be less desirable than "individual" homes built in the 1950's!

Anyone who now uses an estate agent and pays £7,500 in fees when HouseSimple can sell their home for just £600 must be certifiable in my opinion!
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