Should I give a reward to the estate agent direct?

[trying_to_survive]

Hi there - not really a business question.
We are selling the house due to separation and moving on.

I have negotiated with the estate agent for 0.7% from 1% - they are the best estate around here and reputable.

Already have an offer but its not concrete as the buyer still has to go through finances - Estate agent is going to continue to sell (keeping it on portals etc).

A feedback that I have found that estate agent "might not work hard" due to low percentage (this feedback I got from a different estate agent!) - He suggested maybe I can give the agent (i.e., the person who sells the house gets a £200 direct from me as a reward) - this might motivate them.

So as an example, if the house being marketed for £100K and they sell it for £100K then the agent company gets 0.7% + I give the agent directly £200. On top of this I am thinking of adding 1% too directly to the agent for every amount then get "in excess off" - so if the agent sells for £110 - then they get £200 + whatever they get from the company.

I am happy increase the figures that I give on top to motivate the team behind for the sale - But, I have no idea if I am thinking this right way or not (I have never sold a house before!!!)

What are you thoughts please? Should I not do anything and just the estate agent get on with it? I am ringing them everyday for now for the last two weeks and I can never tell if the estate agent is working hard or not - The sales director sounds very professional but I am after a lot of viewings and that isn't yet happening. They brought in 7 viewings in the first two week (over a week ago) and we are 3 weeks in for listing....I am happy to wait for another six months for it to get a asking price...

 

[Fagin2021]

What are you thoughts please? Should I not do anything and just the estate agent get on with it? I am ringing them everyday for now for the last two weeks and I can never tell if the estate agent is working hard or not - The sales director sounds very professional but I am after a lot of viewings and that isn't yet happening. They brought in 7 viewings in the first two week (over a week ago) and we are 3 weeks in for listing....I am happy to wait for another six months for it to get a asking price...

Part of the agents job - and a very important part, is to weed out the no-hopers, the chancers, the simply curious and the potentially criminal before they are brought round for a viewing.

 

[trying_to_survive]

Part of the agents job - and a very important part, is to weed out the no-hopers, the chancers, the simply curious and the potentially criminal before they are brought round for a viewing.

Thanks....I don't mind selling to a criminal if they pay the asking price lol just kidding.

Are you suggesting not to pay any reward?

 

[Lucan Unlordly]

So effectively you aim to take the 0.3% commission from the agents employer and give it to him direct?

Sounds like a sure fire way of losing him his job!

 

[trying_to_survive]

Maybe....but its upto the person to decide that right; maybe the company doesn't mind?

 

[Lucan Unlordly]

Maybe....but its upto the person to decide that right; maybe the company doesn't mind?

They will...
They have a portfolio of houses to sell and want their agent working for all customers not just one because he's giving them a backhander

 

[Porky]

1. Probably get shot down for saying this but in my experience over the years most estate agents are bloody lazy and next to useless, bunging the specific employee a brown envelope is unlikely to motivate them and they will likely be on a commission anyhow by the employer.

2. I agree with @Lucan Unlordly there would be a certain conflict of interest for sure and wouldn't go down well with his employer. Doing this would be counter productive IMO.

3. Ensure your property is listed on Rightmove with them for as long as possible, Rightmove has something like 84% reach of the top four property websites in the market. If your selling you want your property listed on it imo. Make sure it is still listed. Sometime they pay to advertise it for a couple of weeks and then take it off as it costs them money to advertise. I can guarantee the bulk of your viewing will come from this source.

Good luck

 

[Mark T Jones]

Absolutely no point.

There are good agents and bad ones.

The good ones will get on and do the job whatever.

The bad ones will take the course of least resistance- irrespective of fees.

The fact that they dived to the bottom on pricing wouldn't give me much confidence

 

[WaveJumper]

No back-handers to lazy estate agents use the most notable one in your area, there is normally one who sticks out and "seems to specialise" maybe be a bit pricer but they normally also achieve a better price and have a list of clients looking in your location.

And as above it should be front and centre on Rightmove

 

[hikiwari]

If they are the best in your area and reputable you shouldn't need to give a financial incentive. I've never heard of this before and I've bought/sold nine residential properties in my life. You've got an offer, which is what you want, and the buyer is going through finances with the solicitors and this can take a few weeks.

So is there a problem? Well for me it is odd that the buyer hasn't asked the agent to take it off the market as a condition of the offer. That's the normal thing to do but this hasn't happened so the agent has left it on. Also, the agent should list your property as 'under offer' on the portals. Has he? If he has, you won't get any enquiries, if he hasn't he runs the risk of pissing off your buyer.

You didn't specifically say if the offer was full asking price or not but you've hinted it wasn't, and you haven't said if the agent you are using was also the highest valuation.

But if you're not in a rush to sell and "happy to wait for another six months for it to get a asking price" why are you phoning the agent every day? You're just going to irritate him. Phone them once, ask them for an update, ask them to call/text/email you with any further updates and tell them you'll call them every Friday morning. You could do this with your solicitor as well. But calling every day is not helpful.

Good luck.

 

[Mark T Jones]

Having bought & sold numerous properties, here is my watch-list for deciding whether you are dealing with an amateur (actually can be adapted to buying any value service).

Gives the highest 'valuation'. (Hint, they aren't valuing, they are saying a number to get you to commit to a contract.

Talks in terms of tens/hundreds of viewings rather than a handful of genuine., interested prospects. (no pre-vetting).

Creates an initial stampede which promptly fizzles out. (gives an illusion of activity & the vague off-chance that some mud will stick).

Urges you to accept the first offer on the table.

I'd add, doesn't stampede to the bottom on price, but justifies their fee.

 

[WaveJumper]

Agree with the above and I would add there's something to be said for knowing the value of your own property, ie what have others sold for in your road, area etc, have you checked online for current sales that have gone through local to you.

I too have moved around a few times and have had agents under value by as much as a 100k and over value in a bid to excite me into giving them a sole agreement.

 

[Newchodge]

I cannot understand why you would pay someone extra for doing their job.

May I suggest that answering daily pointless phone calls from anxious sellers will seriously intefere with the amount of time available to do the job.

 

[trying_to_survive]

No back-handers to lazy estate agents use the most notable one in your area, there is normally one who sticks out and "seems to specialise" maybe be a bit pricer but they normally also achieve a better price and have a list of clients looking in your location.

And as above it should be front and centre on Rightmove

Thank you for that.

I think I will just leave it - The estate agent is definitely reputable - atleast in the top three.
Somehow in my head I keep worrying if negotiated too low from the asking commission of 1% to 0.7% but maybe thats just me worrying over nothing.

Its on Rightmove - the estate agent called me yesterday and walking me through viewing stats. He said I am doing 139% better in terms of online viewing but the conversion to enquiry is almost none.

He says he doesn't know exactly why yet - could be price, floorplan, house being located on main road and any number of things. But we have a buyer lined up and still subject to finances and estate agent is going to try and get more through the door instead of "keeping all eggs in one basket with this buyer".... I was just imagining there will be several viewings, lots of offers and this is not happening and got me worried.

 

[trying_to_survive]

If they are the best in your area and reputable you shouldn't need to give a financial incentive. I've never heard of this before and I've bought/sold nine residential properties in my life. You've got an offer, which is what you want, and the buyer is going through finances with the solicitors and this can take a few weeks.

So is there a problem? Well for me it is odd that the buyer hasn't asked the agent to take it off the market as a condition of the offer. That's the normal thing to do but this hasn't happened so the agent has left it on. Also, the agent should list your property as 'under offer' on the portals. Has he? If he has, you won't get any enquiries, if he hasn't he runs the risk of pissing off your buyer.

You didn't specifically say if the offer was full asking price or not but you've hinted it wasn't, and you haven't said if the agent you are using was also the highest valuation.

But if you're not in a rush to sell and "happy to wait for another six months for it to get a asking price" why are you phoning the agent every day? You're just going to irritate him. Phone them once, ask them for an update, ask them to call/text/email you with any further updates and tell them you'll call them every Friday morning. You could do this with your solicitor as well. But calling every day is not helpful.

Good luck.

Thanks. The buyer is giving the asking price - although the property is marketed at "Offers in excess of X" the buyer offered exactly X.

I did suggest to Estate agent - if it should be changed "Under offer" - Estate agent is reluctant not to do this yet and contacted the buyer that that offer is accepted "subject of finances". He did say its about risk management.

I will stop with the calling!

 

[DontAsk]

OIEO, OITRO, fixed price etc., are all just bulls**t to make the vendor feel better. It will sell for what someone is prepared to pay. The EA is duty bound to pass on all offers.

Presentation is critical. My wife has a routine to "dress" the house before every single viewing and (most importantly) before photos are taken.

Who took the photos? The EA on his mobile? Get a proper photographer in. Ours last one had floods outside the windows, slave flashes everywhere and the pics were superb.

As for bribery. What about the other poor sods in the office? Or the ones who do the viewings? Spend the money on the photographs.

Have ALL the agents (and even other staff) in the office been to view and make notes on the property, so they are not winging it when they have to respond to enquiries?

 

[IanSuth]

Not worked in estate agency but when a recruiter there were many times we had applicants who had accepted job offers but you just had a bad gut feel - they were the ones you kept half an eye out for people or kept the 2nd choice warm.

Often the gut feel turned out to be correct and the person never started - I would be asking your agent if there is a particular reason he is not sure about the current offer completing and reacting from what they say

 

[Paul Kelly ICHYB]

You want to give a bung to an estate agent who has probably already sold your house?

 

[Fagin2021]

Not worked in estate agency but when a recruiter there were many times we had applicants who had accepted job offers but you just had a bad gut feel - they were the ones you kept half an eye out for people or kept the 2nd choice warm.

Often the gut feel turned out to be correct and the person never started - I would be asking your agent if there is a particular reason he is not sure about the current offer completing and reacting from what they say

'Gut feeling' is often dismissed as subjective and unscientific but that's not the case at all. Gut feeling is actually the accumulation of knowledge and experience in your sub-conscious. When appropriate, these experiences surface to inform your conscious decision-making.

Take the case of following a car that you just know is an accident waiting to happen. You might not be able to explain why you know this, but you've stored various experiences (wandering across lanes, varying speed with no reason, braking in bends, wearing a hat etc ) that tell you to watch out.

When I recruited people I'd sometimes come across candidates where everything seemed right -qualifications, work history, track record, personality and so on but I'd get a nagging sense (gut feeling) that all was not well. Digging deeper often, though not always, proved me correct.

It's the same with salespeople. Those with a lot of experience can often tell whether a sale will be made or not based on their gut feeling about the prospect.

Sorry - bit of a ramble.

 

[WaveJumper]

I worked for an estate agent once lasted a month, they weren’t called Bairstow & thieves locally for no reason

Another observation over the last few weeks here quite a few houses have suddenly come to market, normally a board pops up with sold the latest crop or boards are for sale or let, feel the market has slowed somewhat this year.

 

[DontAsk]

feel the market has slowed somewhat this year.

As always, it depends on the property and location. Some round here sell really quickly, other have been languishing for months.

My son is selling and has triggered a bidding war for his house in Brum.

 

[Mark T Jones]

As always, it depends on the property and location. Some round here sell really quickly, other have been languishing for months.

My son is selling and has triggered a bidding war for his house in Brum.

Always the problem with broad, generic stats.

The housing market is undoubtedly quiet right now. There are areas where it is plummeting and areas where it is booming.

Much like when people on here say the High Street is dying.

 

[IanSuth]

Always the problem with broad, generic stats.

The housing market is undoubtedly quiet right now. There are areas where it is plummeting and areas where it is booming.

Much like when people on here say the High Street is dying.

Son in Coventry had real trouble renting as much more demand that availability - waiting lists for viewing cancellations etc.

Believe family sized properties in the west midlands may be a hot spot in the country

 

[ethical PR]

Thanks....I don't mind selling to a criminal if they pay the asking price lol just kidding.

Are you suggesting not to pay any reward?

I am sure individual staff aren't allowed to take bribes from property owners.

 

[KeithGreen]

Another thing to consider is that estate agents are required to comply with money-laundering regulations. A gift like this may get the individual and the firm in quite serious trouble.

 

[tomyderigo]

Hi there - not really a business question.
We are selling the house due to separation and moving on.

I have negotiated with the estate agent for 0.7% from 1% - they are the best estate around here and reputable.

Already have an offer but its not concrete as the buyer still has to go through finances - Estate agent is going to continue to sell (keeping it on portals etc).

A feedback that I have found that estate agent "might not work hard" due to low percentage (this feedback I got from a different estate agent!) - He suggested maybe I can give the agent (i.e., the person who sells the house gets a £200 direct from me as a reward) - this might motivate them.

So as an example, if the house being marketed for £100K and they sell it for £100K then the agent company gets 0.7% + I give the agent directly £200. On top of this I am thinking of adding 1% too directly to the agent for every amount then get "in excess off" - so if the agent sells for £110 - then they get £200 + whatever they get from the company.

I am happy increase the figures that I give on top to motivate the team behind for the sale - But, I have no idea if I am thinking this right way or not (I have never sold a house before!!!)

What are you thoughts please? Should I not do anything and just the estate agent get on with it? I am ringing them everyday for now for the last two weeks and I can never tell if the estate agent is working hard or not - The sales director sounds very professional but I am after a lot of viewings and that isn't yet happening. They brought in 7 viewings in the first two week (over a week ago) and we are 3 weeks in for listing....I am happy to wait for another six months for it to get a asking price...

You are selling a house the first time, it is natural you feel uncertain or even insecure. I bought and sold more than ten houses in the past thirty years and I think you do the right things. I.e., you negotiated hard, you consider to incentivise the agent to sell for more and you keep an eye on how hard they work. However...

Doing the right things is the first step, but often counter-productive without "doing things right". What I mean, two aspects...
1) Is the 0.7% 'too low' and will not allow the agent to market your property extensively? It is on the low-side and your property will not receive as much of the agent's attention and budget as more expensive houses sold on 1% commission. Sorry, but you will get what you pay for...
2) Why do you offer only 1% bonus? Instead, make sure your house is advertised at market value. If the house is correctly valued then offer an attractive bonus for the agent that will make him want to sell to the right buyer at a higher than asking price. You will not lose money - you will gain a committed agent and better chances to end up with the right buyer. Early 2023, and only three months after the Mini-budget disaster, we sold our family home and we were happy to pay a couple of thousand (the 10% "in excess of" bonus) to the agency when they got the right buyers who loved the house and paid pre-mini-budget value. But it's important to make sure the valuation of your property is correct before offering such bonus. Calculate the average market price per square foot of your property, then compare it to the average sold prices per SQF of recent sales in your area - do not use advertised values, check the "sold" data on rightmove.

 

[DontAsk]

Calculate the average market price per square foot of your property,

Average of what? Your only selling one property.

then compare it to the average sold prices per SQF of recent sales in your area -

That simply does not work. BTDTGTTS. There are too many other variables and using an average risks seriously under- or over-valuing the property.

 

[tomyderigo]

Average of what? Your only selling one property.

That simply does not work. BTDTGTTS. There are too many other variables and using an average risks seriously under- or over-valuing the property.

Average sold price per SQF of similar sold properties within a 1/4 mile radius from the past 12 months. It is part of the Red Book valuation method the RICS surveyors use. Feel free to tell the RICS that it doesn't work

 

[DontAsk]

Average sold price per SQF of similar sold properties within a 1/4 mile radius from the past 12 months. It is part of the Red Book valuation method the RICS surveyors use. Feel free to tell the RICS that it doesn't work

Round here there are too many individual properties for this to ever work. We live on a street that does have similar, properties (maybe a dozen) but they hardly ever come up for sale (one, ours, in the last 25 years, three in total in 30 years). The estimates on Zoopla, for example, are a joke. Two local agents didn't really have a clue when we had them round last year for a valuation after we had done some alterations.

 

[Mark T Jones]

Average sold price per SQF of similar sold properties within a 1/4 mile radius from the past 12 months. It is part of the Red Book valuation method the RICS surveyors use. Feel free to tell the RICS that it doesn't work

There are a few significant key words there;

1/4 mile radius - maybe - but in fact the first number of a postcode can make a big difference, literally from one side of the street to another.

Similar sold properties - that's the real catch-all. How similar?

Age?
Orientation of garden?
condition?
Detached or not?
Colour of bathroom suite?

 

[tomyderigo]

Round here there are too many individual properties for this to ever work. We live on a street that does have similar, properties (maybe a dozen) but they hardly ever come up for sale (one, ours, in the last 25 years, three in total in 30 years). The estimates on Zoopla, for example, are a joke. Two local agents didn't really have a clue when we had them round last year for a valuation after we had done some alterations.

"Round here there are too many individual properties..." --> it is exactly why the RICS Red Book uses £/sqf in their valuation. The methodology creates the ability to compare almost everything with everything and then at the end give small allowances for some perceivable differences (like cosmetic condition being significantly better or worse than the average). When I refer to "Similar properties" I do not mean similar look, or exactly the same modifications, etc. Similar = same number of bedrooms, about the same size, same "type" and you should exclude new-builds from your calculation (I understand that your home is not a new-build). E.g., if your house a 3-bed 1000 sqf semi-detached then you will first pool the properties that are recently sold 3-bed semis that are not smaller than 750 sqf and not larger than 1,200 sqf. If there were only a few of those sold in the past 12 months than you can A) extend the period to 18 months, 24 months... or B) include terraced houses of 750-1,200 sqf. You need to have a bit of understanding of the local property market to decide which ('A' or 'B') is a better choice.

I think you do not understand the following: in the same location the per square foot prices of properties are very similar. The more similar the properties are the more similar the per SQF prices are

Unfortunately, no one will do the work for you. You must collect the sold prices and addresses from Rightmove and to find the size of properties in square metre you must go to the governments EPC Register (Google it).

Search for the houses by your postcode in the EPC Register and write down the house size from their EPC certificate (it will be shown in square metre, XXsqm and YYsqm). Now calculate what is the sold value of both houses per sqm. That is
££House1 divided by XXsqm = ££X/sqm
££House2 divided by YYsqm = ££Y/sqm
££House3 divided by YYsqm = ££Y/sqm
etc.
The more the better, but you must have at least 8-10, then calculate the average of the above to get the ££average/sqm.

Two more steps and you have the market value of your house:
1: You know the floor space of your house. LEt's say it's 100 sqm and the average sold value you calculated based on Rightmove and the EPC data was £4,000/sqm. You have the base value of your house, i.e., £400,000
2: Finally, if your house in a SIGNIFICANTLY BETTER cosmetic condition than the condition of the rest of the properties you included in the calculation above then you can SLIGHTLY improve the value, e.g., by 5% to £420,000. Similarly, if SIGNIFICANTLY WORSE cosmetically then adjust by max 5% to £380,000

Remember, the last step is only about the current cosmetic condition. Not how much floworspace you added, how you repaired the roof, etc. All those and more was taken care of when you created the average. Avoid thinking your house is so different. May be for you but not for the buyers.

 

[tomyderigo]

There are a few significant key words there;

1/4 mile radius - maybe - but in fact the first number of a postcode can make a big difference, literally from one side of the street to another.

Similar sold properties - that's the real catch-all. How similar?

Age?
Orientation of garden?
condition?
Detached or not?
Colour of bathroom suite?

Mark, the above manifest much less in the inherent value than you think. The inherent value of the land and the house in per square foot, square metre is very similar and defined by the area. It makes property values more similar, more comparable and easier to value than the popular belief. That is why the RICS surveyors have to stick to a strict methodology where those aspects you listed matter only at the very end of their calculation.

 

[Lucan Unlordly]

I think you do not understand the following: in the same location the per square foot prices of properties are very similar.

Unless I'm misunderstanding what you are saying, you appear to be overlooking many aspects that drive people to buy and pay a premium for a particular house?

If you put our Victorian semi detached house up against our adjoining neighbours based on square footage we are significantly ahead due to having a 4th bedroom. More importantly all our bedrooms are genuine doubles, not a box room in sight. Next door have a very appealing double frontage, door in the middle, sash windows either side which gives significant kerb appeal. We have double width at the back = bigger garden, off road parking etc., Overall there are many other differences. They have an a large open plan kitchen diner, we a smaller kitchen but a separate dining room.

When next door went on the market a few years ago there was a bidding war and the sale price was much higher than we would have expected for ours, irrespective of the square footage.

 

[DontAsk]

"Round here there are too many individual properties..." --> it is exactly why the RICS Red Book uses £/sqf in their valuation. The methodology creates the ability to compare almost everything with everything and then at the end give small allowances for some perceivable differences (like cosmetic condition being significantly better or worse than the average). When I refer to "Similar properties" I do not mean similar look, or exactly the same modifications, etc. Similar = same number of bedrooms, about the same size, same "type" and you should exclude new-builds from your calculation (I understand that your home is not a new-build).

You can be in our out of the conservation zone, backing onto a petrol station or not, etc., etc., etc., all within 1/4 mile, all of which affect the value of "similar" properties. Then there's snob value from being on one street or another, even one side of the road or the other.

Square footage seems to be worked out from the footprint of the house, but that includes all manner of differences such as one has a massive hallway whereas another has larger real living space, One has a lot of restricted head height, etc.

Merely "similar" properties are still too dissimilar, or you have to factor out so many variations that you have too small a sample to calculate a meaningful average.

I think you do not understand the following: in the same location the per square foot prices of properties are very similar. The more similar the properties are the more similar the per SQF prices are

I understand completely. I've been through exactly the exercise you suggest in two recent house moves. It doesn't work, other than at a very granular level.

 

[IanSuth]

There are a few significant key words there;

1/4 mile radius - maybe - but in fact the first number of a postcode can make a big difference, literally from one side of the street to another.

Similar sold properties - that's the real catch-all. How similar?

Age?
Orientation of garden?
condition?
Detached or not?
Colour of bathroom suite?

School catchment

Council tax precept area

There is a footpath beside my house, until the recent changes it was the constituency boundary and houses other side had a premium. Equally throughout the early 2000's you couldnt get into a particular school from our side of the footpath and again they got a premium (but not as big as those living the other side of the railway/motorway behind the houses opposite us). Now however that school has dropped down the ranking and the one nearer us has gone up and the premium has evaporated.

a 50m ring around my house covered 3 school catchment areas, 3 council wards (1 tory, 2 that flip around between all 3 main parties), 2 parliamentary constituencies (1 labour 1 hardcore Tory)

A target on a map and a website algorithm (zoopla etc) is no match for an estate agent who knows the area and how/where to market particular properties because of local knowledge "catchment for sort after secondary" etc