The cost of Estate Agency fees

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    • #246844
      lovelocktfl
      Participant

      Nearly all the estate agents that I have come into contact with are the same; they want 5% commission plus VAT to sell your property. Some will do deals with exclusive contracts, but to date I have only been able to reduce the commission to 4% with one of the five agents.

      A further problem arises where 2 estate agents are involved (non-exclusive contract), each one expects 2.5% and if the commission is lowered, they will switch their resource into a property which earns them more money. If the primary agent sells its own property, then they still keep all the 5% commission for themselves.

      It’s a catch 22 situation…….do you want a company to agree to a lesser commission but have no chance of selling, or a company that will sell the property but require more money.

      Although I am unfamiliar with the selling of property in Spain, it appears to me that the estate agents join together to share customers between them, instead of competing with each other, which in my opinion reduces their incentives to provide a better service, competitive prices and improved conditions for their customers.

      In the UK recently I sold my mothers-in-law property for £375K @ ¾% + VAT = £3375. In Spain an apartment sold for E375K @ 5 % + VAT = E22,500. An agent told me that the Spanish property market is different to that in the UK. I couldn’t agree more ———-A whopping difference.  A Cartel comes to mind?

      I ask that my identity be anonymous. I don’t want to end up with concrete socks.

    • #246883
      Mark Stücklin
      Keymaster

      You would think that this was a business just dying to be disrupted by new technology but nothing much seems to change. I’ve read about one or two online agents trying to shake things up but nothing breaking through from what I can tell.

      In defence of agents in Spain in the foreign market segment it is true that their costs are higher and the business is riskier so there is some justification for higher commissions than a typical UK agent. The question is how much higher is reasonable? I’ve seen 10% to 15% at the cheaper end, albeit on new homes sold by developers.

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