An estate agent is to trial a new approach to the business of buying and selling homes – whereby he pays the sellers.
Spencer Fortag, of Landmark Estates in Canary Wharf, London, and Dockside Property Services in Kent, is taking existing 0% sales methods a step further.
Called For Sale by Tender and/or Modern Method of Auction, the very similar systems essentially allow agents to charge vendors 0% commission while passing costs along to buyers.
Now Fortag is launching a service which will charge the successful online bidder 2.5%, or a minimum of £5,000, after a 30-day set period.
Not only does the seller pay no commission, but ‘earns’ a £150 high street voucher.
Fortag told EYE: “We will be effectively paying the sellers to sell their homes.
“I am not saying this is a first, but I can say that in 22 years in estate agency I have never come across it before.
“It won’t be for everyone. It should work well in areas where there is strong demand for a particular type of property. It certainly wouldn’t suit a £1m penthouse in Canary Wharf.
“I am also not so naïve as to think that there will be some doubt about it, and of course there may be some resistance from buyers.”
The new service will be offered alongside Landmark and Dockside’s traditional sales offerings.
Fortag told EYE that there has been interest from sellers in the new service, with properties expected to go live shortly.
“We are doing the paperwork for five transactions in Kent and a similar number in London,” he said.
Comments (14)
Honestly can’t see what the issue is. Just another innovative way of working the market and the buyer goes into it with their eyes open but with far greater certainty of the deal being done.
I don’t like Nando’s self service ordering process but I’ll defend till my dying day people’s rights to eat there ….
mmmh Nando’s….
The interesting thing with Nando’s is that as the staff don’t generally get tips, the service is normally really good. Every time I have visited, the staff are always well engaged, polite and efficient. Perhaps they pay more than the usual fast-food joint? Also, I wonder if there is a listen there with regards to how we structure pay for our negotiators?!
The modern auction is up and running for many agents. As with any auction the buyer pays the auction house and they split the fee with the agent. The modern auction simply gives a bit longer to deal with the contracts.
The buyer takes into account the fee and bids with that in mind.
The seller gets a bit less than they anticipated but gets an quicker sale with no fee.
This is not new or indeed news.
If I sell my house and am not paying any agent who are the agents working for
The Vendor remains our client as they have instructed us.
The client is the one who PAYS for your service. The vendor in this case is just a lamb to the slaughter.
0% has been around a long time for agents to capture market share
to extend this to buyer pays for the service then you should redefine your business not as estate agent but something like a property acquisition consultant (sounds far to posh)
But don’t call yourself what you are clearly not as you cant be working for the vendor and even though you wont agree with this, someone soon will put you to the test.
Yet again. Another one of the arla (or lala land cronies) trying to find a way to rip off the public.what is worrying is how they get away with it….
I am not sure about “trying to find a way to rip off the public”. All of the fees are very clearly stated. Any auction that you go to has fees for the buyers but there are numerous advantages to the buyer when buying a property through the Modern Method. And, of course, buyers do not have to buy a property on this platform….
As for an “ARLA cronie”, what does that even mean? I am happy to have a rational debate if you can steer clear of personal insult!
Buying aauction is totally different to buying from joe public.
We have an agent locally who charges 1.5% for the privilege of buying a property, thus throwing into doubt who the agent is actually working for. Also, the 1.5% fee is higher than what every single agents charges sellers!
Sellers also don’t realise that they will actually be out of pocket due to buyers making lower offers incorporating the fees into their offers.
This is disgusting and an absolute joke. As if buyers haven’t got it hard enough and now you want to charge them more money than what most vendors would be willing to pay. It’s extortion! That aside, a few Agents in this area are running something similar without the vouchers, but I know they are achieving less money for the client, as the buyer is having to compensate paying the comission out of their deposit money.
All agents that are doing this, should be ashamed of themselves.
I don’t see this as extortion. It may even prompt vendors who were reluctant to sell because of fees, to sell, so could have a positive effect by creating more opportunities for buyers to buy a property that previously may not have come onto the market.
In Kent, a large corporate is already running a very similar idea (just without the transparency) that seems to be going very well. Their figures seem to suggest that their achieved sales prices are just as good as selling through the traditional method.
This is certainly neither “disgusting” nor an “absolute joke”. Did you know, for example, that before bidding takes place all of the properties paperwork (searches, management packs), etc have to be available for bidders to view on line? So, actually buyers are better informed BEFORE they make a bid than if they were to buy through the traditional method.
I believe the process of buying property in England is actually backward. We see a property and then, knowing very little about it, make an offer. We then wait 4 weeks plus until the solicitors finally pull their fingers out only to find there is something wrong with the paperwork and then, potentially enter a period of difficult, re-negotiation. That is if we are lucky and haven’t been gazumped in the mean time!
This Modern Method addresses these issues and puts a stop to gazumping, as when you are the successful bidder, as long as the reserve price has been met, the vendor has a contractual obligation to sell at the agreed price. No more gazumping!
In addition, as this is an online bidding platform, buyers can see what the bids are. This is complete transparency for buyers and no other way of buying property offers that.
I fully understand that some people will have issues with this; its a massive change in the process and mindset but I genuinely believe that it offers massive advantages to buyers and vendors in certain circumstances.
Buyers are offered better knowledge about the property before committing to it, complete transparency when bidding and more security when their bid wins. Isn’t that a better way?
Sorry but you are wrong. This marketplace works very well with the agents providing the advice, support and guidance to the seller. How can they do that if they are acting for and being paid by the buyer.
The first answer is correct. It is a con to get sellers to think they are paying 0% fee. In reality there is 2.4% or £6,000 (We have the quote the including VAT figure in these “modern” times) coming off the price the buyer offers.
If it looks like a con, walks like a con and quacks like a con, it probably is a con.
Sorry but I cannot get your argument at all.
NewsBoy, the vendor (and the buyer for that matter) receives exactly the same service, support and guidance as they would in a traditional sale.
It is most certainly NOT a con. I believe that properties sold this way will achieve just as much, if not more, than a traditional sale. I feel that buyers will like the transparency and fairness of this modern method and as such will be ultimately comfortable with paying a fee.
The proof of the pudding, as they say, is in the eating. I will happily report back at the end of Q4 and let you know how we have progressed with this.
“As if buyers haven’t got it hard enough and now you want to charge them more money than what most vendors would be willing to pay. It’s extortion! That aside… I know they are achieving less money for the client, as the buyer is having to compensate paying the comission out of their deposit money.”
Either you’ve pressed ‘Post Comment’ without engaging brain – or the brain has already left the building – I’m not sure which.
I one sentence you bemoan the plight of the poor buyer having to ‘overpay’; in the next you’re having a giggle because – as we all know – the buyer simply knocks the purchase cost off the offer amount.
You seem to want suds on your custard – but you can’t have them. Sorry.
Don’t knock an agent’s ability to earn a good fee out of a transaction just because you seemingly can’t… it cheapens you further.