Good riddance

Amanda Huggenkiss

Good for you. But you've been lucky: two very good friends of mine have sold - or attempted to sell - privately in the past few months. Both have been thoroughly jerked around by their respective buyers. One insisted on further reductions even after the date at which exchange was set; and the other has delayed several times the exchange date on highly spurious and contradictory grounds. The latter is still awaiting exchange, more than three months after accepting the offer.

We sold recently and our agents - an established and pretty well-known company - were actually very good: a steady hand providing sound advice through a difficult market. Some estate agents might be parasites, but when you've got a good one, they are a real help - at a price. (Perhaps their percentages should be reviewed - as with the stamp duty thresholds which have not kept pace with increasing prices.) And if you've got a bad or, as you imply you had, an actively dishonest one, you have recourse to the law.

Chris M

Q: What's the difference between a slug and an estate agent?
A: You can warm to a slug.

Max Kaye

That's very mean of you. Don't leeches and parasites have a right to exist?

Now, if only the bailiffs would repossess all those poxy f***ing Foxtons minis......

Commondog

Well said.

Amanda above makes the point that estate agents are some kind of protection against rogue buyers - they're not, they just go along with whoever looks more likely to take their commission upwards.

Water

Something tells me they'll be back.

David Lucas

The persistence of estate agents suggests they do something people value. Some possibilities:

1. Acting as an adviser on pricing and negotiations given broader knowledge of current market

2. Understanding how to present and market a house

3. Matching people to houses and actually SELLING the house to them

4. Developing a book of active potential buyers through their marketing channels and shop fronts

5. Achieving economies of scale in distribution of leaflets and print media (less obviously relevant to web)

6. Acting as a credible cutout to take emotion out of the negotiation, to try to see a deal, to solve problems to get a deal done.

This is often not done well, there are corrupt deals and their incentives are mostly for deals done not prices won. And agents are used infrequently and hard to evaluate.

A lot of resentment comes from writing the big cheque, but what about the economics... lets put some rough figures on it

Take a £370k property (London average), 1.5% fee (average), giving us a £5,550 fee. Lets say £550 direct costs for photographs, printing, ads etc, leaving £5,000.

The agent makes 2 initial visits + 10 viewings (average) taking 2 hours in total including travel and waiting, so about 24 hours direct work.

Double this for unrecoverable time (calling/meeting buyers, sales meetings, admin, briefings, etc), so we get 48 hours work per house for revenue to agency of around £104/hour.

I guesstimate that 50% of bookings lead to a sale before people give up/switch agents - so recovery is £52/hour, or around £92k per full time agent per year (based on 222 8-hour days worked)

From this comes rent, desk and car costs, management, overheads, office support and profit margins etc. Based on work I did with other sales forces this could all add up to say £40k per year, leaving £52k per year.

Paying c. £6k employers NI (12.8% above £5200) leaves us £46k for salary + bonus + pension + benefits.

Not an outrageous sum for a full-time estate agent in London. Of course my figures are only a structured guess - where do you think I am wrong?

Stephen - would you do the job for that?

PS - am not and never had had anything to do with estate agency, other than as a buyer; I can appreciate the economics and incentives they face - but they still drive me mad.

static squid

David Lucas

If you're right, and estate agents offer fair value for money, why are they using what is effectively a restrictive practice to stop sellers having a viable alternative?

http://staticsquid.blogspot.com/2008/09/no-sympathy-for-estate-agents-estate.html#links

Amanda Huggenkiss

Commondog: No, dear, if you actually read what I posted, you'd have understood that I was trying to make the case that not ALL estate agents are parasites. I wouldn't have thought was a terribly contentious point. Ours (John D Wood) provided a service that we were prepared to pay for, were a steady hand, and actively protected us against timewasters.

They were not cheap, but I also made the point that they could lower their percentages to reflect the - until recently - stratospherically large increases in house prices.

And exactly what is wrong with a service provider charging a high price if the market will bear it? As we are seeing now, those that adapt, by lowering commissions, and by not being greedy, will survive. The sh1tmunchers are going to the wall.

But I share the hostility to Foxtons, and their insufferably twee and smug Minis with 'Kensington Cockmuncher' on them.

David Lucas

Squid:

Your link says that a chain of estate agents threatened legal action against Tesco for ripping the content off their websites without permission, in order to aggregate it.

I believe the Spectator engages in 'what is essentially a restrictive practice' (ie not actually a restrictive practice) and would threaten me if I ripped the content off this website and presented in my own format along with a host of other magazines.

I doubt estate agents could stop someone screen-scraping a basic list of properties and prices, but people want the rich content that the industry-friendly sites provide (I assume with a license to do so). Or do the people who spent time and money creating the brochures and floor plans have no copyright any more?

You can try to compete with a new business model, but you can't expect a business to commit suicide for you.