Estate Agents Fees - Uplift/tiered fees
Discussion
Anyone gone down this route before? The deal is that they advertise at £X, with a view to achieving £Y. If they sell for anything up to and including £Y, they get a normal fee (0.8% + VAT in this case). Anything above £Y, they get 10%.
A rival agent has offered to sell for 0.9% + VAT up to £Y and 1% + VAT over £Y.
It's a difficult choice because the first agent is more likely to push buyers for a higher offer as they are more incentivised by the higher rate, but we could get a full asking price offer straight away, in which case we would be paying 10% on the additional amount instead of just 1%.
Just wondering if anyone has had experience with this kind of thing?
A rival agent has offered to sell for 0.9% + VAT up to £Y and 1% + VAT over £Y.
It's a difficult choice because the first agent is more likely to push buyers for a higher offer as they are more incentivised by the higher rate, but we could get a full asking price offer straight away, in which case we would be paying 10% on the additional amount instead of just 1%.
Just wondering if anyone has had experience with this kind of thing?
XJ75 said:
Anyone gone down this route before? The deal is that they advertise at £X, with a view to achieving £Y. If they sell for anything up to and including £Y, they get a normal fee (0.8% + VAT in this case). Anything above £Y, they get 10%.
A rival agent has offered to sell for 0.9% + VAT up to £Y and 1% + VAT over £Y.
It's a difficult choice because the first agent is more likely to push buyers for a higher offer as they are more incentivised by the higher rate, but we could get a full asking price offer straight away, in which case we would be paying 10% on the additional amount instead of just 1%.
Just wondering if anyone has had experience with this kind of thing?
In my experience it doesn't incentivise the negotiator as much as most would think. A rival agent has offered to sell for 0.9% + VAT up to £Y and 1% + VAT over £Y.
It's a difficult choice because the first agent is more likely to push buyers for a higher offer as they are more incentivised by the higher rate, but we could get a full asking price offer straight away, in which case we would be paying 10% on the additional amount instead of just 1%.
Just wondering if anyone has had experience with this kind of thing?
Advertise at 500k, agent sells it for 510k. It's an extra £1000 commission to the company if they're taking 10% of the £10,000. Of that £1000, I'd think the negotiator would get somewhere around £50 commission. Could be a bit more, could be a bit less.
If you can think of a way to directly reward the negotiator for a strong sale, I am confident that would have more of an incentive than the extra 10% going to the office.
In my experience 'Estate Agents' are shortly to go the way of high street insurance brokers and banks. Online is where it's at.
I have sold several houses with Housenetwork (I am not affiliated to them and would expect PurpleBricks, HouseSimple etc are similar) and received excellent service for c£1000 incl VAT.
Contrary to what an estate agent likes you to think, there is NO more work involved selling a house at £200K or a house at £1 000 000. Brochure and photography costs are the same, they just answer the phone the same and print brochures the same. The house goes on Rightmove and that's where people look now. The Estate Agents would like you to think people go window shopping for houses in their branch and suddenly decide to buy through some persuasive power of their branch negotiator - this isn't true but they have to pay for their shop front somehow and that's in the 0.8% + VAT.
All you need is to get on Rightmove and a Conveyancing Solicitor. The online agents can do that for you. The house will find a buyer at it's market value. Too low people will bid up, too high - no viewings so reduce the price. Don't need to pay thousands to a High St agent for that.
I've made the mistake in the past of selling through the same agent as I was buying from thinking I might get some sort of joined-up service but no.
I have sold several houses with Housenetwork (I am not affiliated to them and would expect PurpleBricks, HouseSimple etc are similar) and received excellent service for c£1000 incl VAT.
Contrary to what an estate agent likes you to think, there is NO more work involved selling a house at £200K or a house at £1 000 000. Brochure and photography costs are the same, they just answer the phone the same and print brochures the same. The house goes on Rightmove and that's where people look now. The Estate Agents would like you to think people go window shopping for houses in their branch and suddenly decide to buy through some persuasive power of their branch negotiator - this isn't true but they have to pay for their shop front somehow and that's in the 0.8% + VAT.
All you need is to get on Rightmove and a Conveyancing Solicitor. The online agents can do that for you. The house will find a buyer at it's market value. Too low people will bid up, too high - no viewings so reduce the price. Don't need to pay thousands to a High St agent for that.
I've made the mistake in the past of selling through the same agent as I was buying from thinking I might get some sort of joined-up service but no.
I had good experience with a tiered deal when I sold my last place....though I think most important is to find an agent that you are comfortable with (obvious questions like how many similar properties they have actually sold, for what money etc).
For it to be worth anything to them the stake has to be higher for the overage. You obviously therefore need to set 'x' at a point you expect to get easily.
For it to be worth anything to them the stake has to be higher for the overage. You obviously therefore need to set 'x' at a point you expect to get easily.
FrankAbagnale said:
In my experience it doesn't incentivise the negotiator as much as most would think.
Advertise at 500k, agent sells it for 510k. It's an extra £1000 commission to the company if they're taking 10% of the £10,000. Of that £1000, I'd think the negotiator would get somewhere around £50 commission. Could be a bit more, could be a bit less.
If you can think of a way to directly reward the negotiator for a strong sale, I am confident that would have more of an incentive than the extra 10% going to the office.
Those figures are no good. At 1% if the house sold for 4605K, 500K, 550K the commission is 4,600, 5,000, 5,500 so not much incentive. But at 10% above 450K and nothing below the commission is 1,000, 5,000, 10,000 so the agent gets the same for an average job but a lot less/more for a poor or a great job.Advertise at 500k, agent sells it for 510k. It's an extra £1000 commission to the company if they're taking 10% of the £10,000. Of that £1000, I'd think the negotiator would get somewhere around £50 commission. Could be a bit more, could be a bit less.
If you can think of a way to directly reward the negotiator for a strong sale, I am confident that would have more of an incentive than the extra 10% going to the office.
TA14 said:
FrankAbagnale said:
In my experience it doesn't incentivise the negotiator as much as most would think.
Advertise at 500k, agent sells it for 510k. It's an extra £1000 commission to the company if they're taking 10% of the £10,000. Of that £1000, I'd think the negotiator would get somewhere around £50 commission. Could be a bit more, could be a bit less.
If you can think of a way to directly reward the negotiator for a strong sale, I am confident that would have more of an incentive than the extra 10% going to the office.
Those figures are no good. At 1% if the house sold for 4605K, 500K, 550K the commission is 4,600, 5,000, 5,500 so not much incentive. But at 10% above 450K and nothing below the commission is 1,000, 5,000, 10,000 so the agent gets the same for an average job but a lot less/more for a poor or a great job.Advertise at 500k, agent sells it for 510k. It's an extra £1000 commission to the company if they're taking 10% of the £10,000. Of that £1000, I'd think the negotiator would get somewhere around £50 commission. Could be a bit more, could be a bit less.
If you can think of a way to directly reward the negotiator for a strong sale, I am confident that would have more of an incentive than the extra 10% going to the office.
XJ75 said:
Anyone gone down this route before? The deal is that they advertise at £X, with a view to achieving £Y. If they sell for anything up to and including £Y, they get a normal fee (0.8% + VAT in this case). Anything above £Y, they get 10%.
Murph7355 said:
I had good experience with a tiered deal when I sold my last place....though I think most important is to find an agent that you are comfortable with
Pretty solid advice - pick an agent you get on with and who you think they will act in your best interests as a matter of pride rather than for an extra bit of commission. Contrary to the popular rhetoric about agents, there are plenty of good ones out there.Gassing Station | Homes, Gardens and DIY | Top of Page | What's New | My Stuff