Most estate agents charge a percentage fee based on the price they sell your property for, and this can be anywhere between 1% and 2%.
The agent should carry out the duties necessary to secure a ‘willing and able’ buyer who is prepared to pay the best price for your property in the time frame that suits your circumstances best as well as offer post-sale administrative services, which may involve communicating with Solicitors and other agents to help you reach a speedy conclusion.
Most people want the best possible result. However most also want a low fee. However, you cannot get the best result for the lowest fee.
In much the same way that wouldn’t expect the best car for the lowest price or the best clothes for the lowest price. They might be passable and do the job, but they won’t do it especially well.
That’s pretty much the same for any service I can think of. If you’re offering the best service in any industry for the lowest fee, it’s only a matter of time before your business fails.
I think it’s therefore a much better idea is to agree a fee with your agent based on how well they’ve actually performed for you. A fee based on results. A higher fee for better results and a lower fee for not so good results.
You might think you’ve done brilliantly by ‘negotiating’ an agent into a much lower fee, but looking at it from a commercial viewpoint, they won’t be especially happy with that low fee – so how can you be sure they are giving you anywhere near 100% effort to actually sell your property for the best price?
The truth is you simply can’t be sure. Heck too many people have told me over the years they weren’t even sure their agent was really working for them when paying a full fee!
Sure, it’s easy to assume you’ll get total commitment because their fee increases with a higher sale price, but if you have agreed a 1.5% fee with an agent a difference of £20,000 although being huge to you, is worth just £300 in extra commission for the agency and just £15 to £30 for the negotiator who actually sells your property. £30 certainly isn’t going to motivate anyone to do more than is necessary.
Or you could also look at this way – If this agent is willing to concede to your fee demands quickly, how tough a negotiator do you think they will be when selling your property?
So why not offer the agent a fantastic fee? A fee that will guarantee they work incredibly hard for you. But, and here’s the caveat – only if they prove they have performed well enough to warrant such a fee (i.e it’s linked to the result achieved).
A sliding fee scale might not be an acceptable proposition to many agents, and you can read between lines for the reasons as to why some might baulk at the idea.
However, you will find some agents like myself that will relish the challenge to work hard, earn a great fee and likely a recommendation or two on the back of a sterling job done.
This approach will coerce the agent into working much harder for you because they want to achieve the higher commission fee, however at the same time you’re happy as you’ve achieved a fantastic result – and none of us mind paying a fair fee for a job well done!
With this kind of arrangement your goals are aligned with your agents – and that always leads to better results!
The best agent isn’t the cheapest agent, it’s the agent who is motivated to do more to make sure you achieve the best result.
“We were very impressed and he certainly earned his fee. In the end we had an over asking price offer after 18 days of the flat being on the market. We were over the moon. James is supported by Jack who was great at communicating with us as to what was happening. From being cautious at going with these gents we cannot praise their professionalism and service enough.” SE15 Seller