Estate Agents Prices - Increase of 33%

[ButtermilkJa]

Auctioneering may not be a suitable business for flat-fee deals as a % fee structure gives the agent an incentive to get the highest possible price for their client...

Yes, perhaps. But shouldn't the EA just try to get the best price to suit both buyer and seller. It's not always about getting the highest price. Obviously it is for the seller but there should be motivation enough as it's their job to sell houses regardless of price?

Also it doesn't make sense to say that it it takes the same amount of work/skill/approach to sell a €2m property as it does a €300k property. For example in most cases there is no shortage of potential buyers for a €300k property while candidates for a €2m property will by definition be more thin on the ground.

Again in theory I agree here, but just because there's a shortage of buyers it doesn't mean the EA should charge more for selling. If it's a high priced property it's (usually) because it's a more valuable property and the seller should be reaping the benefits here and not the EA?

 

[ubiquitous]

But shouldn't the EA just try to get the best price to suit both buyer and seller. It's not always about getting the highest price.

Well if it isn't it should be, given that the vendor engages the agent to sell their property at the highest achievable price...

Any agent who fails to act in the vendor's interest is taking money on false pretences and should not be allowed to continue in business.

 

[rabbit]

I think estate agents are overpaid for the work they do / risk they take / qualifications they have etc. I know a few chancers ( no names mentioned ) who get €€€€€ in commissions for an hour or two work and who drive big cars, have property portfolios abroad etc etc. The celtic tiger is gone mad.

Not only that. One or two are crooked as well - buying property cheap off a vunerable lonely elderly person through his son etc.

 

[ClubMan]

Most people know a few chancers in lots of professions but it hardly condemns all practitioners of those professions to the dustbin of crookery.

 

[monkeyboy]

In times of low business, business have to tighten the belt, become more efficient and drop prices to get work.
This is a basic law of economics. Now that the housing market is slowing EAs should be lowering prices even more in competition with each other to make a living.
Instead they are cartelling together to raise their prices. I think you will find very few ( any ? ) businesses that can raise their prices in a low market.
They cannot and should not be allowed to do this. How about all the suoermarkets cartell togethjer and jack up their prices instead of the current fierce competition because consumers are becoming more discerning and difficult to sell to?

Ask your self what line of business are you in, if things get tough do you ask your clients for more money cos times are tight or do you have to learn to become more efficient to survive and be more competitive.

Looks like they had their cake when times were booming and now they want to eat it. This is utterly ridiculous.
I hope this drives more and more people to self sale as it really is very easy.

 

[ubiquitous]

I couldn't believe it last night when I was reading the first chapter of the book "Freakonomics". Apparently estate agent fees in the US are 6% of the sale price!!! Is this true?

 

[room305]

If houses aren't selling people will get more desperate and EAs will be able to command greater fees. Seems logical enough to me. Selling agent fees in the US went up as the market slowed - although usually the buying agent (buyer's often engage an agent to act on their behalf in the US) benefited from this as the extra percentage was offered as an incentive to the agent to promote a particular house to the buyer.

Cannot see what people are getting so worked up about, it is not as though you have to engage an EA to sell your house. If you are not happy with the fees don't buy the service and they'll soon get the message.

 

[shanegl]

They are only returning to the same level of commission they had in the late 90's, so I don't really see the problem. Shop around.

 

[ButtermilkJa]

I couldn't believe it last night when I was reading the first chapter of the book "Freakonomics". Apparently estate agent fees in the US are 6% of the sale price!!! Is this true?

Wow, now that is high. And from what I can recall house prices are not too cheap in the US either.

 

[Apollo]

If I was selling my house in the morning I would never go with someone because they are cheap.

Just for the exact same reason I would never go with a cheap carpenter.

This doesn't mean that I would go with the dearest just for the sake of it but I am wary of people who are willing to give their far cheaper than others are and if they were to drop their rate too quick when negotiating a price with me for the sale of my house then I 'd refuse their service for definite - I wouldn't want anybody who is willing to give their own money away cheaply handling mine.

I would always ask around about someone I was thinking about giving the selling rights to first no matter how much they impressed me in person.

The worst types of EA are also those who say that they can get my a price way over the asking price - it isn't how much you put it on the market for that counts its where you end up. Guys like this overpromise & underdeliver.

 

[Persius]

I couldn't believe it last night when I was reading the first chapter of the book "Freakonomics". Apparently estate agent fees in the US are 6% of the sale price!!! Is this true?

Dunno about the US, but in Germany it can be up to 7%. It depends on the state. In Bavaria it's usually 3%, which the buyer pays (and possibly extra that the seller pays) and in Berlin it's 7%, which the buyer pays.

They are only returning to the same level of commission they had in the late 90's, so I don't really see the problem. Shop around.

In percentage terms, it may be the same level as the mid/late 90s. But when you consider that house price inflation in the intervening period has run waaaay ahead of general inflation, it is a big rise in absolute terms.

 

[ButtermilkJa]

...In percentage terms, it may be the same level as the mid/late 90s. But when you consider that house price inflation in the intervening period has run waaaay ahead of general inflation, it is a big rise in absolute terms.

It is, and I'm going to generalise here, but a lot of EA's seem to be giving their employees fancy BMW 1's and MiniCoopers to drive around and they themselves are driving fancy Mercs. Now don't get me wrong, it's absolutely fine for a company making lots of money to splash out and treat their employees to the best and look good in front of their customers, I've no problem with that. But doesn't that in itself show that their profit margins are huge and that a little slowdown and competition is no justification for a 33% hike in charges? Just get rid of the fancy cars and get a fleet of Ford's. That'll save them a couple of grand a year at least ;-)

 

[murray]

If houses aren't selling people will get more desperate and EAs will be able to command greater fees.

100% Correct , simple market forces

Seems logical enough to me. Selling agent fees in the US went up as the market slowed - although usually the buying agent (buyer's often engage an agent to act on their behalf in the US) benefited from this as the extra percentage was offered as an incentive to the agent to promote a particular house to the buyer.

Cannot see what people are getting so worked up about, it is not as though you have to engage an EA to sell your house. If you are not happy with the fees don't buy the service and they'll soon get the message

Agreed , sensible argument as always ROOM 305

Murray - (I am an EA)

 

[murray]

I think estate agents are overpaid for the work they do / risk they take / qualifications they have etc. I know a few chancers ( no names mentioned ) who get €€€€€ in commissions for an hour or two work and who drive big cars, have property portfolios abroad etc etc. The celtic tiger is gone mad.

If it is so easy - why can't/don't you do it?? - yes, many of us do make huge amounts of money . Would you like a property portfolio abroad? Big car? etc.....



Not only that. One or two are crooked as well - buying property cheap off a vunerable lonely elderly person through his son etc.

Ridiculous generalisation..:mad: One or 2 in EVERY indusrty are crooked.... thats just how people are .........

 

[Guest118]

I think they need some regulation. All industries that deal with the kinda money and figures EA's do need to be. Its only fair on everyone.

 

[murray]

I think they need some regulation. All industries that deal with the kinda money and figures EA's do need to be. Its only fair on everyone.

Agreed.
To be fair - the IAVI and IPAV have been asking for this for years.

 

[murray]

Use Shane Ross, he does not charge commission.

nor is he an experienced auctioneer.

ask him to do some root canal for you as well if you dont mind inexperienced people doing work for you !

 

[murray]

so does this mean you can ask for a 33% refund in any fees that were paid over the last 10 years as the agents didnt have to work as "hard"?

meanwhile...Im sure this will be moved to LOS..

EA fees have reduced by 33%-50% from 10 yrs ago .
As the market boomed , more competition between EA's resulted in fees reducing from 2% to 1% and less in many cases.(some at 0.5%)

So , as we see , simple market forces again.

Why would an EA want to take on a house in a development when he has 5 others on in there that are not selling, AND then do a reduced fee for the vendor , when the EA will have to service the vendor (ie continuous phone calls etc) do the viewings , deal with the situation that will inevitably arise in this market , where the vendor does not understand why he is not getting over-run with offers above the asking price.

So the EA will think " Ok , I will take it on , but on MY terms - take it or leave it" Market forces - fair enough.

Remember , an EA does not get paid unless the deal actually goes through.

Often months of work , late night & Saturday viewings , difficult vendors etc results in not 1 cent.

People have to be fair and see the whole picture - not just pick fault without thinking through all of the facts.

Rant over.!

Murray (an EA)

 

[KalEl]

nor is he an experienced auctioneer.

ask him to do some root canal for you as well if you dont mind inexperienced people doing work for you !

Murray, with all due respect what you guys do is not rocket science.
Claiming there's some great skill in doing what any spoofer with a Mark IV Golf and a mobile phone can do is an insult to people's intelligence.

 

[room305]

Murray, with all due respect what you guys do is not rocket science.
Claiming there's some great skill in doing what any spoofer with a Mark IV Golf and a mobile phone can do is an insult to people's intelligence.

Well to be fair, any monkey in suit could have sold property for the past few years. EAs who were actually good at their job were somewhat overqualified during the enormous bull run of the last decade. Like pitching tech stocks at the height of the dot com frenzy, sales techniques were surplus to requirements as people bid above the asking price as soon as they walked in the door.

As the market returns to normality, the talented salesmen will be in short supply and high demand and this will lead to higher prices. On the plus side, the bluffers will be caught out and will go to the wall.

Imagine there are five properties for sale in your area with five different agents and one sells within a manner of weeks for above the asking price while the others are still on the market a few months later when you're looking to sell yourself. Which agency will you be ringing to sell yours? Would you balk at them charging more than the agencies that couldn't sell your neighbour's house?