Estate Agent Admin Fees

Was looking to buy a house a few years back and dealt with pretty much every agent on the market and I still can't figure out what they actually do. Viewings were typically conducted by someone in their early 20s unable to answer even the most basic questions about the house or the area. On more than one occasion the agent arrived half an hour late or with the wrong keys. Listings were frequently misleading or plain wrong. I remember once viewing a property listed as a two bedroom house. When viewers asked the agent where the second bedroom was she started searching for it frantically before concluding that it didn't exist. And don't get me started on the shambolic bidding process. In think the reason people still use estate agents is cultural rather than functional.
 
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tomdublin said:
Viewings were typically conducted by someone in their early 20s unable to answer even the most basic questions about the house or the area. On more than one occasion the agent arrived half an hour late or with the wrong keys.
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It's not a high brainpower career for sure.

The issue is whether they can achieve a price better than the DIY option.

The internet has got rid of intermediaries in all sorts of markets. But the fact that people are still paying estate agents proves they must bring some value.
 
tomdublin said:
Was looking to buy a house a few years back and dealt with pretty much every agent on the market and I still can't figure out what they actually do. Viewings were typically conducted by someone in their early 20s unable to answer even the most basic questions about the house or the area. On more than one occasion the agent arrived half an hour late or with the wrong keys. Listings were frequently misleading or plain wrong. I remember once viewing a property listed as a two bedroom house. When viewers asked the agent where the second bedroom was she started searching for it frantically before concluding that it didn't exist. And don't get me started on the shambolic bidding process. In think the reason people still use estate agents is cultural rather than functional.
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With all due respect you are coming from a buyers point of view. I think it's a know fact that EA are not particularly liked (Taxi drivers anyone) and that can foggy the views somewhat.
 
NoRegretsCoyote said:
It's not a high brainpower career for sure.

The issue is whether they can achieve a price better than the DIY option.

The internet has got rid of intermediaries in all sorts of markets. But the fact that people are still paying estate agents proves they must bring some value.
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But to warrant 1.5% fee on all sales. It wouldn't be that difficult to sell a house for €700,000 in South Dublin at the moment. That's €11,250 in commission. What for?

In the US, they pay 6% :eek:
 
NoRegretsCoyote said:
If they can attract €15k more in bids then it's worth it. I wouldn't bid on a DIY sale as the vendor could be just dipping their toe.
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That's the big question. Can they attract €15k more in bids than you can do yourself. The argument against is that for your standard home, awareness for the home is generated online. Scarcity is the driver of bids between potential buyers, not the ability of an estate agent.

In the case of higher end properties or ones that are one land or more remote, you may need someone with knowledge of a market.

You could also argue that if you were just dipping your toe, it would be better to use an estate agent. They will do all the work for you and you don't have to pay them!
 
SBarrett said:
That's the big question. Can they attract €15k more in bids than you can do yourself. The argument against is that for your standard home, awareness for the home is generated online. Scarcity is the driver of bids between potential buyers, not the ability of an estate agent.
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But €15k could be literally the effect of one more viewer!

At the high end people are often cash rich and time poor. They don't want to be wasting their time.

I have an open mind about this. I actually bought my last house from someone who didn't want to use an agent. I think the vendor got a bad price btw (better for me) as he took bad pictures and left some fields blank when advertising so it wouldn't have appeared in some searches.
 
The weakness in the straight commission fee structure is as follows:

1% of 500,000 is 5,000 euros

1% of 450,000 is 4,500 euros.

So when you do the maths, there is no real incentive to an estate agent to get the last 10% value of a property. If you look at the difference in fees above, the last 50,000 euros to the seller is only going to generate an extra 500 euro to the agent.

He gets most of his fee in achieving 90% of the value of the property. Thus the last 10% in value, which is where they should really earn their fee, means very little to them in terms of commission. Hence it’s not a very good commission structure for the vendor.
 
@Gregmill

Indeed, the incentive is mainly to secure a sale that won't fall through.

But an agent that consistently encourages vendors to accept the first offer won't get much repeat business.
 
Noregrets

I never said anything about the first offer.

All I am saying is that as the commission structure is based on a fixed commission percentage there is no much incentive to get to the asking price.

Of course, estate agents are very good at playing the game, but if they were ‘honest’ they would all probably agree with my previous post.
 
lledlledlled said:
I just got a quote recently too. The EA explained they are one of the dearest but gave an impressive sales pitch in fairness to her.

The costs are as follows:

- An up-front €560 (incl VAT) for the For Sale sign, internet listings, etc
- Plus 1.5% (VAT not included) of the Sale Price when/if the house is sold.

I thought it sounded expensive.
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EA fees in ireland are actually low by international standards

you should be able to negotiate down to 1.25% plus vat , ive managed it down the years a few times

the advertising fees above are pricey alright , 250 euro should cover it
 
lledlledlled said:
I just got a quote recently too. The EA explained they are one of the dearest but gave an impressive sales pitch in fairness to her.

The costs are as follows:

- An up-front €560 (incl VAT) for the For Sale sign, internet listings, etc
- Plus 1.5% (VAT not included) of the Sale Price when/if the house is sold.

I thought it sounded expensive.
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For a Dublin sale, both Lisney’s and DNG quoted roughly the same marketing fee of around €750 plus vat for photographs, colour brochures, for sale sign, web sites etc, neither would budge on that. Both also highly recommended two weeks of single/double photo ads in Thursdays Irish Times @ €175 + vat per single insertion.

More important though is the commission, I was able to get 1% on a €700k+ house. Admittedly you won’t get 1% on a more modestly priced house, from the big agents in Dublin anyway.

I think they earned their €7k+ fee. Having previously sold privately, I would use an agent again.
 
twofor1 said:
For a Dublin sale, both Lisney’s and DNG quoted roughly the same marketing fee of around €750 plus vat for photographs, colour brochures, for sale sign, web sites etc, neither would budge on that. Both also highly recommended two weeks of single/double photo ads in Thursdays Irish Times @ €175 + vat per single insertion.

More important though is the commission, I was able to get 1% on a €700k+ house. Admittedly you won’t get 1% on a more modestly priced house, from the big agents in Dublin anyway.

I think they earned their €7k+ fee. Having previously sold privately, I would use an agent again.
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Just wondering about negotiating commission. Just putting house in market (Dublin 11) for 750k. Quoted 1.25% <800k and 1.5% if > 800k by SF. DNG quoted 1.5% . Would you think I’d have chance of negotiating either to 1.25% no matter what price achieved. Is it generally done and what’s the best approach?
 
The best approach is to ask, say you will give them the business @ 1.25% regardless of sale price. Worst case scenario is they say no.

Plenty of smaller local estate agents will do a €750k sale for 1%. DNG did a similar sale last year for 1%, possibly things are different in today's market.

You don’t have to use the smaller local agent but you can use their lower % when negotiating with SF or DNG.

I never dealt with SF but heard they are less flexible in their pricing. I would be surprised if DNG would risk losing a €750k sale over 0.25%, they would still be getting a fee of over €9K.

Ask.
 
I think you’re better off doing some research around who the best person is within the industry in the particular area. An example would be the Dublin 6 / Dublin 6W area. Yes, there are umpteen 20 something year olds with clipboards who haven’t a rats. And then there’s a guy called Pat Mullery who I’ve dealt with a few times. He was with DNG for years but only recently went out on his own. The guy adds value, end of story. I have no connection with him.
 
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