It’s the question that home owners have been asking for decades.
Even before the Internet levelled the playing field, an estate agents fees were hard to justify.
But back in the day property types could, sort of, defend themselves. A bit.
And that’s for two reasons. Firstly, as house prices have doubled, doubled again and then doubled again during the 1990’s and the early 2000’s, it followed that agency commissions did the same. So for the same level of input, their remuneration escalated. When house prices were at a lower level compared to incomes and selling fees too, the amount paid to estate agents itself was therefore less and thus more justifiable. But that was quite a while ago.
Secondly, whilst property firms have benefited financially from housing booms, their job has become easier. Much easier. Before the Internet came along, the job was very much one whereby different agents may have different buyers on their books. They would have to be quick off the mark to compile details and ‘ring out’ to their applicant list in order to bag a buyer before another agent sold the property instructed to them or until the buyer had been snaffled by a sharper agent.
The best agents were therefore rewarded for their efforts if they were better known, smarter and swifter. And that could justify a bigger fee too, as did prominent office locations, multiple local newspaper ads etc.
I know all this because I was one of those local agents using such angles to justify big percentage commissions until I sold my High Street business three years ago. (Saw-writing-wall)
And so to the devastation that ensued once the world wide web was switched on…
The Internet has changed the estate agents’ job entirely. It has taken the geography out of the business in that no one cares where the agent decides to sit at his desk any more because there is no need to even see him. No longer are sellers at the behest of a secret drawer that may, or may not, have a list of names and ‘phone numbers in it that relate to HOT buyers. Because as research proves time and again, those buyers are constantly (even obsessively) buzzing through the likes of Rightmove, Zoopla, Prime Location and FindaProperty waiting to see what the market has thrown up for them that day. Ring outs and mailing lists, hot boxes and ‘send outs’ are all but confined to the museum of estate agency.
*Expert Agent released research in December of a sample of 1200 estate agent offices that demonstrated that 95% of all enquiries, viewings and sales came from ONLINE enquiries. Not office visits, window displays or newspaper ads.
Bang goes justification for still higher estate agency fees then. So why do agents still charge them?
Well, entirely because they can. For now. And because they need to in order to cover their multiple office costs, cars, staff and so on that are remnants of a past era but that 12,000 UK estate agency branches (and falling) cling on to often because their landlords won’t release them from their leases.
The ‘They can’ is a dig at you though, the consumer. Until you stumble across the alternative in online estate agents, there for your taking 24/7, then the High Street guys will still stiff you for your hard earned cash for as long as you allow them to.
Use your mouse to sell your house. Unless you like throwing money away.