Here is the most extreme case – so far – of a seller planning to save money by not using a high street agent.
He owns a £15.5m house in Knightsbridge. It has six storeys, five bedrooms, a staff flat, wine cellar, gym and large garage. There are also, according to the particulars, two “additioanl [sic] WC’s”.
However, the seller – who founded a pharmaceutical company – plans to save £263,000 by putting the property with online agent Sellmyhome.
The decision was apparently taken after talking to traditional agents.
He said: “What struck me during the process of appointing an agent was the work involved to sell my house seemed disproportionate
“How can it be that selling a £15.5million property should cost 15.5 times more than selling a £1m property, when the agent’s workload is virtually identical?
“When we raised the issue with agents, there seemed to be very little wiggle room on the 1.2 to 1.7% commission.”
Of course, only in London could anyone refer to £1m houses as though they were cheap.
It’s an interesting story, told by the redoubtable Mira Bar-Hillel in the Evening Standard. Only two things, so far as we can see, are missing: a comment, complete with signs of raised blood pressure, from Ed Mead or Peter Rollings. And no sign of Russell Quirk . . . whoops, we spoke too soon. eMoov gets a mention right at the end.
There’s also something missing from the headline: ‘Tycoon saves £260,000 in estate agent fees ‘, etc, etc. More accurate would be: ‘Tycoon hopes to save £260,000’ etc, etc. What if he manages to sell it for a mere £15m when Knight Frank could find just the buyer at his asking price of £15.5m. Then do the sums.
However, we must point out that Sellmyhome was founded by former estate agent Will Clark – who used to be with Knight Frank.
Now he does the job for £499 upfront.
Vendors conduct their own viewings and get listings on the main portals. Both Zoopla and Rightmove logos are shown. Plus Sellmyhome is offering an October discount.
Blimey. Sarah Beeny hasn’t half missed out on this one.
Here’s the Evening Standard report
And you can find the property details here
Comments (28)
Running some numbers on this; a fee base of 0.3% plus VAT, 12 sales a year, would nicely cover 4 good salaries, usual fixed costs and a 50 KW window display in Sloane. Vendors of this ilk aren't stupid but by being pig trough greedy Agents are forcing these instuctions in to the grasp of Passive Intermediaries.
And if one wanted to be pedantic … the advert doesn't comply with advertising rules, a few personal statement of opinions some would argue are incorrect. He might think it is superb! And it is on this point that most on-line only agents fail miserably with their advertising.
Let's be fair on this bloke, first off I assume that the typical vendor paying 1/4 million in EA fees doesn't had this sort of money over without getting value for money but it is a different world to most of us here………£250, 000 on a single deal! Anyway odd no one has opened up in Kinghtsbridge doing 0.5% you'd still be on £75k but I'm sure there's a reason. Anyway, point is this sellmyhome bloke, possibly owns a business that he's going to float next year and is worth millions as he's on line only at that seems to be the way they talk but he's got 50 odd listings and at 500 quid a pop means he's not really making much money, I know this online only gig is supposed to be cheap but this lad must be living on thin air – Jonnie
Ahhh… but he's not a sole trader, Jonnie! They can't be paying the portal fees off what they're pulling in at the rates you're talking about. Seems like this is a hobby for them – which if that's the case pity their clients who are expecting something a bit… 'more', shall we say – seeing as their homepage describes them as offering an "award winning service" (please someone provide reference to this "award") and includes the word "dedicated" on at least two occasions (one of them promising you a "dedicated account manager") – you'd expect something more than a 'we'll-pick-a-value-out-of-thin-air-and-bang-you-on RM-for-less-than-the-cost-of-a-clapped-out-Peugeot-405' service… wouldn't you?
Is it sad that I noticed the electric towel rail in the bathroom (Zone 2) doesn't appear to meet building regs.
I just wonder how many clients who would pay £15.5m are even going to bother looking on-line?
Glad you posted that, woodentop – I've been wondering that all day! Maybe it's just that my entire register is only worth two thirds of that one property that I struggle with the concept of multi-squillionaires avidly mooching about on portals waiting for 'THAT' dream property to be listed by some online Herbert who doesn't ring out to hot buyers… because they haven't got any to ring… I dunno. Anyone point me in the direction of the plot, please…
Wooden top, your right. Many buyers at that end of the market are looking at 'off market' properties or will want to deal with a high end city agent, they certainly won't be expecting to have to call a seller direct to book a viewing. The 'exclusivity' for this property has gone right out the window from the outset.
The first thoughts of anyone looking at that end of the market would be…."Wow"…"What's wrong with it" and "I'll put in a cheeky low offer".
What WOULD be interesting is if one of the traditional Agents that this "tycoon" apparently talked to were to drop a post on here as to what the property IS actually worth – then we can watch this space with interest. No good coming on 'after the event' with a "told you so" – let's all see whether the guy was right or wrong to chuck £600+ at this exercise…
"Now he does the job for £499 upfront." Erm… no he doesn't – please add £99.80 for VAT… PLUS any of the little add-ons he may wish to tick the boxes for on the order form…
And that photography is professional so there would have been a charge for that or he would have made no money whatsoever from his £499. Or perhaps we are seeing a new business model emerging: We pay you to sell your house.
Well, RA – the company gives you a generous "Professional Photography (10 photos)" in for your Fee, regardless of the package you choose – although Mr Tycoon has obviously paid a few more quidlets out of his vast fortune for the photographer to snap away like a Japanese tourist… ;o) And to be fair, the pics aren't actually too bad, either.
Which is ironic given that the owner will probably be showing a lot of them around…….
To be honest if an agent tried to charge me that fee I would expect Rolls Royce accompanied viewings not just the car but the champagne and buffet. I can't see the fee is now paying is the issue, more a case of "well I can afford to dabble and see what happens". I'm sure he will return to a high street agent if he doesn't get lucky. I'm more than prepared to get in my car from anywhere in the country and offer a 7 star service for that fee, but then it is a bit outrageous for any man in the street to get his head around as being justified?
If you pay peanuts you will get monkeys – what a faceless society some people want to live in. Face to face meetings are still the best way to secure good business. Good luck when you need to know about sales progression 😉
This will be an interesting one. A test case. Here we have a house that is in THE best London location. A property that should have no shortage of buyers. Assuming that the owner has priced it at the figure that the high st agents have suggested then it should sell when it goes on Rightmove and Zoopla……as long as the photos / video are professionally taken. If it does sell then it will be a big blow to the London agents that try and justify quarter of a million £ fees,. It is also, potentially, a high interest press story that is sure to do the rounds – whichever way the sale goes.
But of course Wilko one will never know what the seller COULD have achieved for their property had they employed the professionals who really know the market there.
You could argue that in reverse as well…..if he paid the massive fee to the agent, that buyer may have also been found on RM via the online agent , and the sale price remained the same. In that case he would have saved his 6 figure fee ( do those fees really exist….I mean really really exist???)
In today's world, all estate and letting agents are online agents. Not sure therefore that the term "online agent" is in fact the correct term for a low cost operator. Limited service agent or DIY agent is probably more correct.
Mr Foreman – you state "In today's world, all estate and letting agents are online agents." Actually, I would prefer to be known as 'an Estate Agent who uses the internet, among other methods, to advertise my clients' properties'. If you don't mind, that is.
@PeeBee – not looking to insult, mock or fail to recognise estate agents as professionals. Simply making the point that every estate agent is online and likely invests heavily on their online presence.
Didn't think for one second you were, Mr Foreman – HOWEVER there is a HUGE difference between those Agents who RELY on the portals, and those that use them as what they are in reality – merely an extension (and a weak one at that…) of their marketing arsenal. I'd be interested to hear of your views on that clarification.
I can only answer that honestly and say that if the business that you represent does not rely on external portals and has a marketing platform that enables your marketing to exist as a stand alone platform then I would be very happy to learn from your experience. Clearly larger businesses have strength and resources that others would find very difficult.
Mr Foreman
The minute you BELIEVE that you "rely" – then you do… and the game is lost. Look at it another way – what I sincerely believe to be 'the way' to look at it – that THEY "rely" on ME, YOU, and some 20,000 other Agents of all types to populate their site with property, just as any other advertising platform does. If not – and the internet portals ARE what you firmly believe keeps you in business – then why suffer the encumbrances of your current premises and staffing costs… and become an 'onlinie'!
Only serves to prove that wealth is no indication of common sense, as if that hadn't already been proven by the investors in easyProperty!
Wait until his first half a dozen tyre kickers view the property and waste his time because they want to view a 15 mill house. Then wait until an aborted sale because a fantasist can't afford it. Than wait for a sale to go ahead and a survey to down value it. Then wait for the mortgage company to ask lots of difficult questions. Then wait for the solicitors to raise numerous enquires. Then try and hold a possible chain of 6 wealthy vendors with exact timescales together ……… maybe 250k is a lot of money but I am sure he could at least halve that fee if not twice!
I suspect the local agents won't want to touch this property on a no sale- no fee basis – it's £3000 a foot – "unusual" decor, errr….say no more. My £15m would be parked elsewhere. The "tycoon" hasn't only saved himself a big fee – the estate agents have saved themselves a lot of wasted time…