I am not sure of this answer, but what estate agent invented the charging model of a variable rate of commission based as a percentage?
Whoever did, has enjoyed a long and sustained period whereby every estate agent in the country has adopted the same charging model to the consumer - but why have we put up with it for so long, and does it actually work for the consumer in today''''s market.
Firstly, we have paid up over the last xx years because there was no alternative - the general public had no options. The local estate agent had complete power because they "had" contacts and built up applicant lists that were exclusive, and there was no way the consumer could advertise to those buyers.
However, with technology advancement and the introduction of the worldwide web, this has seen websites such as rightmove.co.uk move into the top ten internet sites in the UK with over 80 million searches per month. They advertise over 1 million homes for sale, which is virtually total stock availability, coupled with instant property photos, home buyers have now become reliant on this marketing method.
But this blog is about value for money, not about rightmove.
Why should you pay an average of 1.5% of your property value? - if you actually had to draw cash out from your bank and hand over the money in ten pound notes to your agent, I am confident you would question the amount and at the very least ask yourself "was there not another way".
Another spin on this subject is trying to negotiate the rate you can get from a local agent - I give you a scenario: You contact 4 agents and ask for their best rates, you push hard on one agent and manage to "get a deal" in your eyes. However, that agent is also handling 20+ other properties and he has a buyer who is interested in a few houses similar to your type and price range. The issue you have to ask yourself is, if the agent has the opportunity of pushing either your home or another client that is paying him 2% compared to your 1% - what one will the agent push harder?
The estate agency market should and must be transparent - that's our firm belief. You should be charged a fixed amount not based on your sale price, but based on value for money and service. There is no difference in costs to an estate agent selling a property worth £100,000 to a mansion worth £1,000,000, so why should that person at the top end pay more for exactly the same service.
At the very least you should ask for a breakdown in cost to see exactly what you are paying for and compare like for like against other agents.
All we ask as an estate agent ourselves, is consider us in that decision process and ask us to list our service levels like for like as well.