Why you should use an established estate agent, and not be taken in by online hype
“No commission,” the adverts tell us. How can that be true? Increasing numbers of online estate agents are offering 0% commission when you advertise your property with them. You merely have to cover their advertising and marketing fees with a one-off payment at the outset, and when the property is sold there is nothing else to pay. No estate agent is able to chip away at your sale proceeds by taking a percentage of the price from you – sounds good, right? Think again.
The classic estate agency model sees the agent take no initial payment from you, and they will market the property until a sale is agreed. A good estate agent will then mediate between buyer and seller, and liaise with both solicitors, to ensure that the transaction runs smoothly (an essential part of the sale process, known as “sales progression”). Their commission (i.e. their fee) will be negotiated with the seller at day one, usually a percentage of the sale price, or perhaps a fixed fee on occasion, and they are paid nothing until the day that the sale completes.
A member of my family recently moved house. He used an online estate agent, as he was understandably impressed by the “no commission” claims. He paid the agent’s initial fee of more than a thousand pounds, they valued the property, took some photographs, and advertised the property on the usual websites.
He conducted viewings himself, as there was an extra fee payable if he wanted an agent to show the property for him. When he eventually received and accepted an offer, the estate agents’ involvement ended. They had found a buyer, they had their money, and that was that.
The agents didn’t put the solicitors in touch with each other, and the buyer and seller had to make contact with each other direct to swap solicitors’ details and to discuss matters such as the completion date. Coupled with a buyer who lived overseas and a buyer’s solicitor who failed to return any calls made to them (I understand that solicitor was recommended by the estate agent), the entire process was needlessly prolonged and stressful for my relative.
Moving house is one of the stressful experiences of anyone’s life. Thankfully, most people will choose a solicitor who fits their needs, and not seek to save a few hundred pounds at the expense of their time, and more importantly their sanity. Why wouldn’t you do the same when choosing an estate agent, even if your savings might be a few thousand pounds? The loss you will incur if your chain breaks down, in respect of legal fees and disbursements, surveys, mortgage applications, etc, not to mention the added time and stress, will soon swallow up any savings that you thought you might have made.
The moral of the story: If it sounds too good to be true, it most probably is.
Post-script: My family member did eventually move, and is settling in well, and I’d like to think that it is thanks, at least in part, to his smart choice of solicitor 🙂
If you are buying or selling a property, please contact Andy Roscoe at Meaby & Co for advice: andy@meaby.co.uk or call 020 7703 5034.
