At last people are starting to ask why do estate agents still exist. As I have said before, in a previous blog there is now no longer any need to use a high street estate agent to sell your house. Everything they used to do can be done using an online agent for less than £1,000, irrespective of the selling price in most cases. The only thing left for sellers to do is show potential buyers around their home. After all the owner will know more about the property than the estate agent, however good they say they are, ever will. If necessary, even viewings can be sub contracted out for minimal extra cost.
So why do estate agents still exist? Why exactly! It could be that older sellers are reluctant to trust the new technology or do not have confidence online. It could be vendors choose to take the easy, traditional option despite the thousands of pounds they are wasting unnecessarily. More likely it is the fact that estate agents are “like the proverbial giant squid “sticking its tentacles into everything property that smells like money.”
Estate agents are letting agents, charging both tenants and landlords commission and fees. They arrange repairs and maintenance, some inflating the landlord’s bill way above the actual cost. One case involves former BBC Watchdog presenters Lynn Faulds Wood and her husband John Stapleton who are suing Foxtons, accused of charging landlords ‘secret commissions’ of nearly 50%. They say Foxtons tried to charge them £2,000 to fix a leaky shower, which their own plumber fixed for under £400. In another case landlord Dr Chris Townley is suing Foxtons after he was charged £616 for changing a light fitting – a 49% mark-up on the original £412.50 invoice for the work. More on this story
It would also appear that estate agents have found another niche market acting as so-called buying agents. Merryn Somerset Webb says in the latest MoneyWeek issue: “buying and selling houses is very time consuming, why don’t all buyers hire an expert to be on their side? Someone who knows every house on their patch, when it was sold and for what, what its price per square foot should be and where the damp patches are.”
Merryn says that whilst she agrees Britain “could easily do without estate agents – as long as the buyers started using buying agents”
Seriously, is any of this a sane reason to pay a ‘buying agent’ thousands of pounds – normally around 1% of the purchase price?
A property survey by a qualified surveyor should find all faults with the property. A quick check on Zoopla will tell you what homes in any particular area are selling for. As for the local area, all the essential checks such as schools and crime flood risk should be done by buyers as due diligence. Employing a ‘buying agent’ to find your next home is a complete idiotic waste of money. Something that ‘cash rich, time poor’ people do, not what most people should do. Certainly not as a proviso for demise of traditional high street estate agents.