strim

I have just read that Tesco are going to start acting as an estate agents and charging something like 50 quid a property.

Drives me crazy that real esate agents round where I live can get away with charging 5% of the sale price. I am surprised that more low cost online alternatives have not caught on. The nearest we have in NY is Foxtons with its 3% deal.

Ruslan124

Now you have me started. I am in Canada and about to sell my house. I get 3 agents to come and tell me what its worth

675 000
600 000
525 000

So firstly they cant even agree on that.

Then commission in the same order
4%
5%
6%

So I am talking to the last one explaining why I am not willing to pay 6% and that a company here will assist you in selling for 2%.

She says - I will do it for 5%
Me- But I can get it done for 2%
She - 2% is not enough, I will have to split the commission. If I could sell it on my own, then 2% would be OK.
Me - But once you list it, you have no gaurantee that you will be the one to sell it
She - Yes, thats why I need 5%
Me- So 2% is a fair value for selling the house but you need 5% in case you do not sell it.
She - Yes
Me - So you want me to pay 5% to support two people when 1 person is all it takes
She - What does it matter, you are making a profit, this is my salary we are talking about.
Me- Your'e salary is not my concern, I believe in a fair price for a fair days work, I am not paying you $30K plus tax for a couple of weeks work, that is not a salary that is a lottery win.
She - When I helped you buy this house, the commission was 5%
Me - So you got 2.5% for making an appointment for me to see the house.
She - Yes I suppose
Me - And now you want me to pay you more money to help sell the same house that you have told me will sell very quickly and that you have already made a commision on.

The conversation really did not end up going anywhere other than in circles.

I believe that people deserve to make a fair living but this is just plain crazy. Someone wants 1/20th the value of my home for placing an add on a listing service and doing no more than what equates to 2 or 3 weeks of actual work at most.

The crazy commision rates are not paying for a service they are paying for the protectionist mechanism that the real estate industry has put in place. The listing agent gets a commision, the listing broker gets a comission and the selling agent gets a comission.

strim

This was the thing that drove me nuts. The agents we used would start to get exasperated that we hadn't made any offers after seeing a handful of dreadful properties and would then start putting the pressure on and suggesting we might not be a serious buyer. It seems like a good business to be in, especially with the crazy property prices.

Ruslan124

Most people in the real estate business do not make much of a living because there are just too many of them for teh amount of property being sold. For the lucky few, there is significant money to be made.

fatbrit

The US system, however, usually produces much faster results than the UK and there is true representation for both sides in the deal rather than the rather one-sided affair in the UK. In addition: no messing about with solicitors taking forever and a week to do the conveyancing (you can manage it all in as little as 10 days over here), and no stupid chains. In addition mortgages are much better over here. Also, no bloody stamp duty!

What is different is that the costs are traditionally stacked more against the seller than the buyer. Usually 3% of the price you are paying for selling goes straight to the buyer's agent as commission to encourage him/her to bring prospects to see your des res.

ladylisa

You can sell your property yourself. Loads of people in our sub division have sold their condos by placing ads in the newspaper for weekend open houses. One condo had a procession of buyers one after the other, he sold it in 2 days.

Ruslan124

I read a report recently that stated something like 90% of buyers find the houses they are interested in through an internet search (on thier own). The days of a real estate agent having a list of exclusive potential buyers is fading fast.

AdobePinon

The qualifications for becoming a real estate agent are minimal. And it shows. That is one reason why many people buy or sell without an agent. You're simply not getting your money's worth.

fatbrit

If you want to do it yourself, no problem. But searching for the property is really a small part of what the agent does (or should do!). An agent on the buyers' side, for example, arranges for you to visit the property, negotiates on your behalf with the listing agent or seller, in many states draws up the actual contract, explains the process to you, oversees the process on your behalf, etc. Do you really have the skills necessary to do that or the time to learn them all? We aren't buying a sofa here!

BTW -- for anyone interested, I ain't an agent, and I also believe that there are long overdue changes coming to the way the market works. However, I do not see an end to agents, just changes in the way they do business and are paid for it.

ladylisa

Isnt the UK changing to the US system?

fatbrit

Dunno -- be interested to find out.

The main differences I see are:
* MLS -- all properties on market freely available to all (except FSBO!)
* Usually, buyer agent and seller agent with fiduciary duty to their client ONLY (excepting the horror of "dual agency)
* Common use of escrow company as neutral third party
* Uncommon use of lawyers in many states, especially for residential transactions

Ruslan124

Why would an agent work hard to reduce the selling price on your behalf when their share is higher if the price is higher?

My experience for what its worth is that they ask you how much you want to offer and just present that.

I am being very harsh here and want to apologise to those well trained and experienced real estate agents that do a good job. Unfortunately there are many more barely qualified and inexperienced real estate agents that let the side down. But in saying that, it is still not worth 3% and above no matter how good you are, especially in a hot market.

Ruslan124

And in general more use of a sole agency agreement. If you go multiple agency then you can pay up to 2% commission.

By the way there is no standard UK system, Scotland works differently and in an arguably simpler way. You list for offers above a certain price and give a closing date. Bids are submitted prior to that closing date and all opened about the same time. Vendor chooses what they consider to be the best offer and your done. There is also no gazumping in Scotland, it is illegal.

fatbrit

In a hot market (like the moment), all rules go out of the window. It usually all ends in tears, though!

I agree there's little incentive at first glance for the buyers' agent to pull the price down. However, the buyers' agent certainly has two things influencing him/her beyond the fiduciary duty: the house needs to appraise at or below the negotiated figure for the loan to go through and, more importantly, they want your repeat business and that of your relatives and friends. If you come out of the deal less than satisfied, they're unlikely to get it.

anotherlimey

Sell your house the hi-tec way - eBay it.