Foxtons Estate Agents
Discussion
Foxtons not having a good time in the US:
www.recordonline.com/apps/pbcs.dll/article?AID=/20070111/BIZ/701110311/-1/BIZ05
(Commission in the US is usually 5-6%, but buyers frequently use agents too, so it's often split between the buying and selling agents).
www.recordonline.com/apps/pbcs.dll/article?AID=/20070111/BIZ/701110311/-1/BIZ05
(Commission in the US is usually 5-6%, but buyers frequently use agents too, so it's often split between the buying and selling agents).
Edited by deva link on Wednesday 7th March 17:55
justinp1 said:
xxplod said:
Any PHers dealt with them? We had them out to value our house. Valued it literally tens of thousands higher than anyone else. Wanted 2.25% commission. Gave it all the spiel about "London buyers.... relocating....yadda...."
We didn't go with them and we've now had several calls, very agressive, demanding to know whether we've had offers, why we didn't go with them etc... Their pitch seems to be, if they achieved the daft price they suggest marketing it at, it's worth paying 2.25%. All this when a house round the corner from us on with Foxtons is priced £50K too high and hasn't sold for months!
We didn't go with them and we've now had several calls, very agressive, demanding to know whether we've had offers, why we didn't go with them etc... Their pitch seems to be, if they achieved the daft price they suggest marketing it at, it's worth paying 2.25%. All this when a house round the corner from us on with Foxtons is priced £50K too high and hasn't sold for months!
Its important to look at *their* motives here and then match them to yours with a counter offer. I shall explain.
Lets take two estate agents. Agent A comes to your house, and tells you that to get the best price you should tidy some stuff up and spend a couple of grand doing this. After this he wants to market your property at £395,000.
Agent B comes to you house and tells you how many people want to move into the area, how great your house is and how you should be aiming to get £439,000.
Agent A may have been the more honest and realistic one, but Agent B is the one which makes us happy, excited and is going to make us £40,000 richer than we thought we were!
Fast forward three to six months to a year later, interest was poor to start with but is starting to pick up, one of two things can happen:
1) As house prices have risen anyway, the overpriced point of your property is becoming more realistic anyway
2) If you have not had a sniff, they will convince you to drop the price to £395,000
So what is the outcome: You sell your house through Agent B but for pretty much the same price as what Agent A recommended, and what else has happened - in stead of paying Agent A 1.5% of £395,000 we are paying an extra 0.75% on the promise that we would get more cash to cover the costs - an empty one.
But what else has happened? We could have spent the couple of grand tidying up as Agent A said, with the realistic price and the house would have shifted 6 months ago. But now as prices have risen by 5% over that six months the property range we were looking at has increased in cost by £30-£40,000!
All this seems obvious, but it is human nature to see the pound signs in front of our eyes and fall for the sales pitch. And what are the motives for other agents? Well Agent A didnt get the job, but B did - so thats they way it needs to be.
All that has happened is that Agent B has 'snared' you. And if they have to drop their price - they knew it was unrealistic to start with, they were prepared - but in any case their dropping you by tens of thousands only costs them a few hundred quid off their commission of several thousands, worth it to get it sold and get a new propertly in its place.
So, what do you do about it when you are 'sold to' this way? But the ball back in their court, and you will see how honest they are being. And be honest with them. Turn back their deal like this: they can have their high percentage as long as it is sold for at least X before X date. If it is not the percentage lowers as time goes on and as the selling price lowers.
*Then* you will see how honest they have been with their assessments and their motives.
Edited by justinp1 on Wednesday 7th March 10:58
absolutely fvcking spot on. are you EA by any chance?
minimax said:
justinp1 said:
xxplod said:
Any PHers dealt with them? We had them out to value our house. Valued it literally tens of thousands higher than anyone else. Wanted 2.25% commission. Gave it all the spiel about "London buyers.... relocating....yadda...."
We didn't go with them and we've now had several calls, very agressive, demanding to know whether we've had offers, why we didn't go with them etc... Their pitch seems to be, if they achieved the daft price they suggest marketing it at, it's worth paying 2.25%. All this when a house round the corner from us on with Foxtons is priced £50K too high and hasn't sold for months!
We didn't go with them and we've now had several calls, very agressive, demanding to know whether we've had offers, why we didn't go with them etc... Their pitch seems to be, if they achieved the daft price they suggest marketing it at, it's worth paying 2.25%. All this when a house round the corner from us on with Foxtons is priced £50K too high and hasn't sold for months!
Its important to look at *their* motives here and then match them to yours with a counter offer. I shall explain.
Lets take two estate agents. Agent A comes to your house, and tells you that to get the best price you should tidy some stuff up and spend a couple of grand doing this. After this he wants to market your property at £395,000.
Agent B comes to you house and tells you how many people want to move into the area, how great your house is and how you should be aiming to get £439,000.
Agent A may have been the more honest and realistic one, but Agent B is the one which makes us happy, excited and is going to make us £40,000 richer than we thought we were!
Fast forward three to six months to a year later, interest was poor to start with but is starting to pick up, one of two things can happen:
1) As house prices have risen anyway, the overpriced point of your property is becoming more realistic anyway
2) If you have not had a sniff, they will convince you to drop the price to £395,000
So what is the outcome: You sell your house through Agent B but for pretty much the same price as what Agent A recommended, and what else has happened - in stead of paying Agent A 1.5% of £395,000 we are paying an extra 0.75% on the promise that we would get more cash to cover the costs - an empty one.
But what else has happened? We could have spent the couple of grand tidying up as Agent A said, with the realistic price and the house would have shifted 6 months ago. But now as prices have risen by 5% over that six months the property range we were looking at has increased in cost by £30-£40,000!
All this seems obvious, but it is human nature to see the pound signs in front of our eyes and fall for the sales pitch. And what are the motives for other agents? Well Agent A didnt get the job, but B did - so thats they way it needs to be.
All that has happened is that Agent B has 'snared' you. And if they have to drop their price - they knew it was unrealistic to start with, they were prepared - but in any case their dropping you by tens of thousands only costs them a few hundred quid off their commission of several thousands, worth it to get it sold and get a new propertly in its place.
So, what do you do about it when you are 'sold to' this way? But the ball back in their court, and you will see how honest they are being. And be honest with them. Turn back their deal like this: they can have their high percentage as long as it is sold for at least X before X date. If it is not the percentage lowers as time goes on and as the selling price lowers.
*Then* you will see how honest they have been with their assessments and their motives.
Edited by justinp1 on Wednesday 7th March 10:58
absolutely fvcking spot on. are you EA by any chance?
LOL, hell no!
Just general experience of business deals and negotiation. The main key with these things is to think about what the 'other guy' wants and how I would maximise the situation if I were him. I think estate agency is one of the industries where most people 'lose' the most amount of money. They pay several thousands of pounds for the facility of being screwed around and 'advised' to take a lower offer so the agency can grab their commission and move on.
I use to be an Estate Agent and am now a Property Developer. One thing that makes me laugh is the term "negotiator" applied to EA staff.
Negotiator? my arse. They are "go betweens" I negotiate deals, the EA simply conveys my message to the vendor or purchaser, and reports back. They get paid a lot of money for advertising, banging a board in the ground, opening a front door and delievering a few messages, Thats it.
Negotiator? my arse. They are "go betweens" I negotiate deals, the EA simply conveys my message to the vendor or purchaser, and reports back. They get paid a lot of money for advertising, banging a board in the ground, opening a front door and delievering a few messages, Thats it.
jamesuk28 said:
Another point. While some may argue that foxtons have the sellers best interests at heart, ie trying to get top dollar for your property, ask yourself this how many buyers when seeing a Foxtons board or details run a mile?
Not enough. In fairness, while they stink, their agressive approach does tend to bully buyers into paying a higher price. Swings and roundabouts. Wouldn't go near them myself for either side of the business. Their little jubs in £50 suits drive like spastics as well.
I know of buyers who are proud to say they bought through Foxtons as it seems to add kudos to their property and implies that money is no object to them. That's London for you.
The biggest problem with estate agent's fee structure is that they actually have no incentive to get a better price for your house.
As with most businesses, volume is good for them, so they want to sell your home as quickly as possible at any reasonable price. Let me give you a simple example:
Assume 1% commission (like up here in Leeds!!)
Agent A values your house at £525k. After spending fvck all on some digital photography, an ad in the homes section and an internet listing, he gets an offer for you house for £500k. He stands to make £5k if he convinces you top accept the offer.
If he tried to find a buyer at £550k, he only stands to make another £500 - so why would he bother with weeks of marketing?? If he can make the sale at £500k and get his commission, there is virtually no incentive for him to work harder for a sale which would make you a further £49,500.
IF, on the other hand you offer him a commission of, say 1% for the sale up to £500k and 15% of anything above that, he is going to work a lot harder to secure a buyer at £550k. He then makes an extra £7.5k - but you make an extra £42.5k!
This is how to truly incentivise a salesman to get the best possible price for your house and know he is really getting the best price.
As with most businesses, volume is good for them, so they want to sell your home as quickly as possible at any reasonable price. Let me give you a simple example:
Assume 1% commission (like up here in Leeds!!)
Agent A values your house at £525k. After spending fvck all on some digital photography, an ad in the homes section and an internet listing, he gets an offer for you house for £500k. He stands to make £5k if he convinces you top accept the offer.
If he tried to find a buyer at £550k, he only stands to make another £500 - so why would he bother with weeks of marketing?? If he can make the sale at £500k and get his commission, there is virtually no incentive for him to work harder for a sale which would make you a further £49,500.
IF, on the other hand you offer him a commission of, say 1% for the sale up to £500k and 15% of anything above that, he is going to work a lot harder to secure a buyer at £550k. He then makes an extra £7.5k - but you make an extra £42.5k!
This is how to truly incentivise a salesman to get the best possible price for your house and know he is really getting the best price.
johnfm said:
The biggest problem with estate agent's fee structure is that they actually have no incentive to get a better price for your house.
As with most businesses, volume is good for them, so they want to sell your home as quickly as possible at any reasonable price. Let me give you a simple example:
Assume 1% commission (like up here in Leeds!!)
Agent A values your house at £525k. After spending fvck all on some digital photography, an ad in the homes section and an internet listing, he gets an offer for you house for £500k. He stands to make £5k if he convinces you top accept the offer.
If he tried to find a buyer at £550k, he only stands to make another £500 - so why would he bother with weeks of marketing?? If he can make the sale at £500k and get his commission, there is virtually no incentive for him to work harder for a sale which would make you a further £49,500.
IF, on the other hand you offer him a commission of, say 1% for the sale up to £500k and 15% of anything above that, he is going to work a lot harder to secure a buyer at £550k. He then makes an extra £7.5k - but you make an extra £42.5k!
This is how to truly incentivise a salesman to get the best possible price for your house and know he is really getting the best price.
As with most businesses, volume is good for them, so they want to sell your home as quickly as possible at any reasonable price. Let me give you a simple example:
Assume 1% commission (like up here in Leeds!!)
Agent A values your house at £525k. After spending fvck all on some digital photography, an ad in the homes section and an internet listing, he gets an offer for you house for £500k. He stands to make £5k if he convinces you top accept the offer.
If he tried to find a buyer at £550k, he only stands to make another £500 - so why would he bother with weeks of marketing?? If he can make the sale at £500k and get his commission, there is virtually no incentive for him to work harder for a sale which would make you a further £49,500.
IF, on the other hand you offer him a commission of, say 1% for the sale up to £500k and 15% of anything above that, he is going to work a lot harder to secure a buyer at £550k. He then makes an extra £7.5k - but you make an extra £42.5k!
This is how to truly incentivise a salesman to get the best possible price for your house and know he is really getting the best price.
Someones read freakanomics
I did some work last year with one of the top 5 country house agencies. They accepted a performance related fee, so if they can do it, Foxtons could too. If they won't, then there are plenty of agencies to choose that would who come without the aggro that Foxtons carry.
Have to say I've had a bias against Foxtons ever since the time I watched 5 of their wide boys drag racing each other in their Minis up Queen's Gate in South Kensington in the rush hour.
Have to say I've had a bias against Foxtons ever since the time I watched 5 of their wide boys drag racing each other in their Minis up Queen's Gate in South Kensington in the rush hour.
jamesw2000 said:
johnfm said:
The biggest problem with estate agent's fee structure is that they actually have no incentive to get a better price for your house.
As with most businesses, volume is good for them, so they want to sell your home as quickly as possible at any reasonable price. Let me give you a simple example:
Assume 1% commission (like up here in Leeds!!)
Agent A values your house at £525k. After spending fvck all on some digital photography, an ad in the homes section and an internet listing, he gets an offer for you house for £500k. He stands to make £5k if he convinces you top accept the offer.
If he tried to find a buyer at £550k, he only stands to make another £500 - so why would he bother with weeks of marketing?? If he can make the sale at £500k and get his commission, there is virtually no incentive for him to work harder for a sale which would make you a further £49,500.
IF, on the other hand you offer him a commission of, say 1% for the sale up to £500k and 15% of anything above that, he is going to work a lot harder to secure a buyer at £550k. He then makes an extra £7.5k - but you make an extra £42.5k!
This is how to truly incentivise a salesman to get the best possible price for your house and know he is really getting the best price.
As with most businesses, volume is good for them, so they want to sell your home as quickly as possible at any reasonable price. Let me give you a simple example:
Assume 1% commission (like up here in Leeds!!)
Agent A values your house at £525k. After spending fvck all on some digital photography, an ad in the homes section and an internet listing, he gets an offer for you house for £500k. He stands to make £5k if he convinces you top accept the offer.
If he tried to find a buyer at £550k, he only stands to make another £500 - so why would he bother with weeks of marketing?? If he can make the sale at £500k and get his commission, there is virtually no incentive for him to work harder for a sale which would make you a further £49,500.
IF, on the other hand you offer him a commission of, say 1% for the sale up to £500k and 15% of anything above that, he is going to work a lot harder to secure a buyer at £550k. He then makes an extra £7.5k - but you make an extra £42.5k!
This is how to truly incentivise a salesman to get the best possible price for your house and know he is really getting the best price.
Someones read freakanomics
I did!! But, it is also the system I have used in the distant past to incentivise a salesman.
In London (not sure where you are based) it can be risky to overvalue for 2 reasons:
1) If the house sticks on the various websites it goes stale (ie buyers tracking the sites wonder why its not sold and so dont bother seeing it)
2) If it sells and then gets downvalued by the surveyors and you decide to readverise it, the same alarm bells start ringing for buyers-ie why did the original sale fall through.
I recently saw this in a property near to us. Foxtons advertised it for £450k which was far too much as it was up 4 storey staircase (ie no lift). It didnt sell for ages when eveything around it went under offer in 24-48 hours. Eventually it was reduced to £399k! and guess what-still no buyers even though it was a comparatively good deal at this price.
1) If the house sticks on the various websites it goes stale (ie buyers tracking the sites wonder why its not sold and so dont bother seeing it)
2) If it sells and then gets downvalued by the surveyors and you decide to readverise it, the same alarm bells start ringing for buyers-ie why did the original sale fall through.
I recently saw this in a property near to us. Foxtons advertised it for £450k which was far too much as it was up 4 storey staircase (ie no lift). It didnt sell for ages when eveything around it went under offer in 24-48 hours. Eventually it was reduced to £399k! and guess what-still no buyers even though it was a comparatively good deal at this price.
johnfm said:
The biggest problem with estate agent's fee structure is that they actually have no incentive to get a better price for your house.
As with most businesses, volume is good for them, so they want to sell your home as quickly as possible at any reasonable price. Let me give you a simple example:
Assume 1% commission (like up here in Leeds!!)
Agent A values your house at £525k. After spending fvck all on some digital photography, an ad in the homes section and an internet listing, he gets an offer for you house for £500k. He stands to make £5k if he convinces you top accept the offer.
If he tried to find a buyer at £550k, he only stands to make another £500 - so why would he bother with weeks of marketing?? If he can make the sale at £500k and get his commission, there is virtually no incentive for him to work harder for a sale which would make you a further £49,500.
IF, on the other hand you offer him a commission of, say 1% for the sale up to £500k and 15% of anything above that, he is going to work a lot harder to secure a buyer at £550k. He then makes an extra £7.5k - but you make an extra £42.5k!
This is how to truly incentivise a salesman to get the best possible price for your house and know he is really getting the best price.
As with most businesses, volume is good for them, so they want to sell your home as quickly as possible at any reasonable price. Let me give you a simple example:
Assume 1% commission (like up here in Leeds!!)
Agent A values your house at £525k. After spending fvck all on some digital photography, an ad in the homes section and an internet listing, he gets an offer for you house for £500k. He stands to make £5k if he convinces you top accept the offer.
If he tried to find a buyer at £550k, he only stands to make another £500 - so why would he bother with weeks of marketing?? If he can make the sale at £500k and get his commission, there is virtually no incentive for him to work harder for a sale which would make you a further £49,500.
IF, on the other hand you offer him a commission of, say 1% for the sale up to £500k and 15% of anything above that, he is going to work a lot harder to secure a buyer at £550k. He then makes an extra £7.5k - but you make an extra £42.5k!
This is how to truly incentivise a salesman to get the best possible price for your house and know he is really getting the best price.
Completely agree.
Last time I sold, I tried to do a deal with an EA that on top of their standard % comm I would give them 10% of any premium above asking.
And guess what? Not interested. They didn't have an in-house lawyer to draw up the amendment and so couldn't be bothered.
I was quite taken aback. Happy in the end that when it was sold at over asking they missed out on a chunk as well as the sale.
Horse_Apple said:
johnfm said:
The biggest problem with estate agent's fee structure is that they actually have no incentive to get a better price for your house.
As with most businesses, volume is good for them, so they want to sell your home as quickly as possible at any reasonable price. Let me give you a simple example:
Assume 1% commission (like up here in Leeds!!)
Agent A values your house at £525k. After spending fvck all on some digital photography, an ad in the homes section and an internet listing, he gets an offer for you house for £500k. He stands to make £5k if he convinces you top accept the offer.
If he tried to find a buyer at £550k, he only stands to make another £500 - so why would he bother with weeks of marketing?? If he can make the sale at £500k and get his commission, there is virtually no incentive for him to work harder for a sale which would make you a further £49,500.
IF, on the other hand you offer him a commission of, say 1% for the sale up to £500k and 15% of anything above that, he is going to work a lot harder to secure a buyer at £550k. He then makes an extra £7.5k - but you make an extra £42.5k!
This is how to truly incentivise a salesman to get the best possible price for your house and know he is really getting the best price.
As with most businesses, volume is good for them, so they want to sell your home as quickly as possible at any reasonable price. Let me give you a simple example:
Assume 1% commission (like up here in Leeds!!)
Agent A values your house at £525k. After spending fvck all on some digital photography, an ad in the homes section and an internet listing, he gets an offer for you house for £500k. He stands to make £5k if he convinces you top accept the offer.
If he tried to find a buyer at £550k, he only stands to make another £500 - so why would he bother with weeks of marketing?? If he can make the sale at £500k and get his commission, there is virtually no incentive for him to work harder for a sale which would make you a further £49,500.
IF, on the other hand you offer him a commission of, say 1% for the sale up to £500k and 15% of anything above that, he is going to work a lot harder to secure a buyer at £550k. He then makes an extra £7.5k - but you make an extra £42.5k!
This is how to truly incentivise a salesman to get the best possible price for your house and know he is really getting the best price.
Completely agree.
Last time I sold, I tried to do a deal with an EA that on top of their standard % comm I would give them 10% of any premium above asking.
And guess what? Not interested. They didn't have an in-house lawyer to draw up the amendment and so couldn't be bothered.
I was quite taken aback. Happy in the end that when it was sold at over asking they missed out on a chunk as well as the sale.
I hope the owner of he company didnt hear that they 'Couldnt be arsed!'
If it was the owner that said that he deserves to lose every penny. Changing T&Cs for that should be a simple process and shouldnt need 'their lawyer' to do it for them. After all, if they dont have implcit knowledge of the terms of the deal they are offering, how can they offer it effectively, and if it is really that complicated wording for them not to understand, then how is the client supposed to!?
Their loss though!
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