A HomeOwners Alliance survey recommended all home sellers negotiate on fees but eMoov warned ‘estate agency won’t change unless the commission-only model becomes a thing of the past.’
The research found just 2% of estate agents state fees online and that no major regional or national estate agents make any reference to their rates or terms and conditions on their websites either.
EMoov research suggested estate agents charge an average of £774 an hour against lawyers on £500, doctors on £250 and vets on a lowly £33 an hour.
Russell Quirk, CEO and founder of eMoov, said: “We believe that the no sale, no fee is damaging the reputation of the estate agency industry and promoting a wasteful approach where ‘successful sellers’ are the losers.
“In a system where only successful sellers are charged, one out of four people are paying for four out of four people’s marketing costs. Home sellers could be charged significantly lower fees if estate agents adopted a fixed-cost approach. We are not saying that the entire fee needs to be paid up front. Part of it could be paid on completion, but that ‘winners’ fee should be fixed and transparent so home sellers are clear on the costs.”
Other problems listed in the Homeowner’s Alliance report include the fact two-thirds of estate agents insist on doing an in-home valuation before discussing fees and that average fees range from 1% to 2.5% plus VAT for a sole-agency contract.
Hidden fees are another issue, including “£99 registration fee”, “marketing incentive fees” of £200, or hefty non-refundable deposits of up to £500 if the home seller withdraws from the sale.
Other contractural issues problems include the right to charge commission beyond the home sale contract, fees charged upon exchange even if the sale falls through at completion and lengthy sole agency lock-ins of nearly half a year, compared to some agents that require no more than two weeks written notice.
Some London estate agents have also begun charging both the home seller and the home buyer fees, according to an Evening Standard story last week.
Jan Hytch, president of the National Association of Estate Agents, speaking on the Your and Yours programme last week said home sellers rarely base their estate agent selection purely on cost.
On the diversity of fee add-ons, she said: “The industry is unregulated, therefore any contract a seller enters into is entirely between them and the agent who agree between them how to proceed. We would also urge all sellers to go to agents registered with the NAEA.”
Hytch added that with 12,500 estate agents the sample of 160 checked by the Homeowners Alliance was very small.
