Why are house buyers paying fees to estate agents?
kippeh
Posts: 6,655 Forum Member
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There was a news report last night that seemed to suggest that in some parts of the country, not only is the seller paying the estate agent, but the buyer is paying something like 1% of the sale price plus VAT as some sort of "Introduction Fee" ?
Surely this isn't right? The agent's service is to sell the house, and act for the seller. How can he act for the buyer at the same time?
Seems like a legal scam to me. Anyone here had to pay as a buyer?
Surely this isn't right? The agent's service is to sell the house, and act for the seller. How can he act for the buyer at the same time?
Seems like a legal scam to me. Anyone here had to pay as a buyer?
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No, I don't agree with them as there is a potential conflict of interest. Same with letting agents charging tenants admin fees, totally wrong and should be made illegal.
The buyer would have to make a contract with the 'agent', who in this instance would be a principal. If a possible buyer refused, and the agent refused to provide details and arrange a viewing, then I'd have thought they were in breach of their duty to the seller.
However, I do suspect this could be a wind-up. ;-)
No it isn.t, it was all over T.V. news and M.P.s are getting involved to try and stop it.
It's a rip off, most definitely, but people are willing to pay it.
http://www.theguardian.com/money/2014/feb/10/house-buyers-beware-estate-agents-double-charge
Except that it probably allows these people to get preferential treatment from the estate agents
Look it up for yourself <shrugs>
Many, if not the majority of the properties that we see in our area and price bracket are sale by tender. This means that the fees for the buyer are anywhere between 1-2% to the estate agent.
At first, we were refusing to consider any sale by tender properties, however that limits our opportunities so much that we will now look at them but only if they are significantly cheaper to offset the fees we would have to pay. It rankles but Im not sure what option we have when thats the way it is in the area we are looking.
Yes it is a new way of selling houses but it has been introduced to combat the fixed rate £500-1000 internet and independent agents.
Themselves.
But to benefit who?
They are really set up to help the sellers achieve the best price possible.
Yet if they charge buyers a fee, then they are saying they will get you the buyer a good deal if they pay them upfront -which means that they are adversely hindering the sellers from getting the best deal possible,
My apologies, I must have missed seeing any mention of it. I didn't realise it referred to a practice agreed between the agent and the seller.
It would be interesting to see the contract between the estate agent and the vendor. I thought there was a general duty on the agent to put forward any offer from a buyer "ready, willing and able" to go ahead. Possibly the contract waives this duty (if it still exists).
Which is completely irrelevant. It all comes down to contracts between two parties, conducted through an agent. They can agree to any terms they want, subject to rules about legality.
If I pay for speedy boarding on a plane, or for a higher broadband speed, or buy in advance tickets to a tourist attraction, I'm buying preferential treatment.
I reached this conclusion because I am actually seeing it happen in the real world. You arrange an open house and anyone who wants to make an offer puts in a sealed bid which is opened on an arranged date. People who want to make an offer tend to offer the most they possibly can in order to get the property.
For example we had a house with a guide price of £600,000 the vendors were prepared to take offers about £570,000. When the bids came in one of them was for £610,000. If this house was sold without the tender then the vendors would have probably taken the first offer they received over £570k and would have been liable to pay thousands of pounds in commission as well as it was they got a great price and paid £180 in commission.
With regards to all offers needing to be put forward that another poster mentioned, because this is a completely different type of contract that the vendors are signing it doesn't work this way. All offers must be submitted, in a sealed envelope, before a certain date.
I note the buyer got a crap deal, so maybe buyers will bid less than a guide price for future properties?
I appreciate what you are saying but in that case the vendor would pay more in commission, with this contract they only ever pay £180. So they end up quids in.
Also if a house doesn't receive an offer that the vendor is willing to take they can choose to revert to a traditional way of marketing. We tend to offer this option on the really in-demand houses/areas where there is going to be a lot of competition. And obviously in a flat housing market it wouldn't be viable, but it really seems to be taking off in our area and a lot of agents are moving towards it.
Rightmove doesn't let home owners advertise their house for sale. You have to go through an estate agent.