More people are choosing to instruct a high street agent who charges the lowest fee.
The information has emerged in the latest Home Moving Trends survey, which has been run by Peter Knight of the Property Academy for the last ten years.
The same question has been asked every year: “Did you choose the agent with the cheapest fee?”
In 2008, just 4% of sellers said they did. This year, the proportion has risen almost four times to 15%.
Knight emphasised that the survey is only of customers of traditional firms, and agents such as Purplebricks are excluded.
However, Knight said that the rise of online agents was a factor in more people opting for the cheapest fee.
He said: “I believe the main reason for this increase in sellers choosing the cheapest option is principally down to the new models.
“Not just because they’re charging less, although this is a factor, but the fact that they’ve brought the subject of fees right out into the open whereas before it was largely a private conversation at the market appraisal.”
Knight said that agents must now bring up the subject of fees at the very beginning.
He suggests a dialogue which opens along the lines of: “If it’s the cheapest agent you’re after, then I’m not the one for you.
“But if you’re looking for someone who will be here for you all the way and will do everything to get you the best buyer at the best price and is in the best position to move on your timetable, then let’s walk round your home and we can discuss exactly what you’re looking to achieve.”
Knight does emphasise that the latest survey says that fees are not the principal driver for 85% of people, but adds that he senses fees are much more in the minds of sellers than was previously the case.
More insights will be on offer from the survey at next week’s EA Masters Event. The results of a survey in which 5,000 tenants and 5,000 landlords took part will also be shared.
https://propertyacademy.co.uk/four-i-newsletter-issue-243?inf_contact_key=a3fb7342da6dbdebe954ff0bc7b4896c53dc01f8888b54a410fb738ad0579d9d
Comments (16)
JB43
“Not all agents charge 1% or less.”
True.
“The ones making real money are charging 2%.”
Not necessarily, mon ami.
Confucius he say
“Agent that sell eighty percent of stock at one percent fee make more money than Agent who sell fifty percent at two.
Agent also less likely to have to #NUKE many-lot 1-star review from trustpilot, also.”
Wise old owl, that Confucius…
Not all agents charge 1% or less. The ones making real money are charging 2%.
The race to the bottom is not the way to make money. It might hurt your ego tho…
I offer a market standard commission or an alternative 699 up front offering.
2 things
Vendors who want the 699 deal are usually the greediest on asking price
very few vendors want to pay 699 upfront and I really do not try to persuade them either way just so long as they come on with me.
PP
May I ask what your average “market standard commission” %age and value is please?
Courtesy of John Ruskin
t’s unwise to pay too much, but it’s worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.
Certain agents who charge exorbitant commissions, are giving these pay anyway merchants the opportunities to present their normally inferior offerings. Speaking for myself, my fee structure, covers all my overheads and provides a modest profit too. We are paid only upon completion,we negotiate the best price for our vendor and we are no more expensive than these online agents. Perhaps, if we all took a look at the £SD rather than % of sale price, we would make it more difficult for them to compete with us. Just a thought ???
You don’t half write some ***** articles under the guise of factual(BS), relevant (irrelevant!) news at PIE!
Mr Hills61
EYE write and/or publish articles predominantly based upon pre-written PR sent to them or picked up from various feeds.
They collate ones of specific interest to our industry and roll them out in front of us so that we don’t have to hunt them down ourselves – and so that we are kept abreast of what is being pushed out into public domain.
Don’t shoot the messenger. Thank Ros and the team instead of having a frankly unnecessary and unwarranted pop at them.
Do you think the article is an accurate, factual representation of the market PeeWee?
HAHAHAHAHAHAHAHAHAH! PeeWee!
Oh – my poor sides doth splitteth!
Like no-one has ever come out with THAT one before. Thanks for the weak offering – but I’ve been called far worse by far better over the years. But I suppose you’ve gotta start somewhere – and at the bottom is as good a place as anywhere.
Anyway – back to your post. You ask
“Do you think the article is an accurate, factual representation of the market”
Yes, I do, actually. Which is a ‘first’ for me because I usually wouldn’t have found sufficient cause to agree with Mr Knight if he’d stated that today is Tuesday.
I would agree that 15% or more vendors choose their Agent based upon
* Highest “valuation”
* Lowest Fee
* Combination of both.
Frankly i’m staggered that it was EVER only four percent.
And even more staggered that people who frequent this site don’t know (or refuse to accept) the reality.
So if 15% of people choose the cheapest, that means 85% DON’T make their decision solely based on fee. A vote of confidence to good, full service agents, in my opinion, and only lends weight to the fact that low fee agents being to blame for XYZ estate agency suffering is a lazy argument.
in any form of face to face selling the biggest factor in closing the deal is not price, it’s the ability of the salesperson.
Poor salespeople think the only reason why people don’t buy from them is that the price is too high, so they generally gravitate towards the cheapest companies in their market.
Good salespeople and especially the great ones, know that the best commission generally comes from trusted, brand leaders at the premium end of the price scale.
Estate agency is no different.
Correct. 85% of the time.
There will always be people that don’t give a monkey about anything but the fee, and that number is growing. Partly because people – for some reason – believe that agents don’t actually do anything apart from throwing a property on RM (we know this is rubbish but a % of the general public believe it) and no matter how much an agent educates them, they are an estate agent and there is a lack of trust from some people.
The problem is, as you said, that some agents panic as soon as they are asked the question and ditch their fee immediately instead of staying strong and showing the value.
Or as Your Move employees were being told – “Just tell them you can get £15,000 more because we have 200 offices, so that covers the fee, it is the negs job to get the price down”
Then the agent’s job is to educate them on the difference. When selling a property, the outcome is variable, not fixed. It’s just plain daft to assume that your end point will be identical, irrespective of who you appoint to accompany you on your journey.
Great insight, as ever, from Peter Knight and the Property Academy. Whilst it’s clear that fees are part of the consideration in the minds of any prospective seller, in my view, most vendors are looking for VALUE. it interests me that in most (nearly all) locations, the cheapest estate agent is very rarely the market leader. According to this research, 85% of sellers do not choose the agent with the cheapest fee.
Madness to select any service provider on how cheap they are – cheap is always cheap for a reason.
It’s your house !!!!
Incentivise the estate agent to sell it and squeeze that extra £5,000, £10,000, £50,000, £100,000 from the buyers – don’t save an upfront small commission amount only to lose out on a massive extra increase in your sale price!?