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Old 08-05-2008, 01:18 PM
 
3,459 posts, read 5,757,673 times
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Of course you should ask for a discount.

Paying a 6% commission on the cost of the home is the equivalent of 18 months worth of principle payments on a 15 year note. Put that cost at both ends of the transaction, and you're giving away three years of your life for the agents help.

I don't even want to think about how long it would take to pay off the commissions on a 30 year mortgage.
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Old 08-05-2008, 01:38 PM
 
1,422 posts, read 2,295,230 times
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Quote:
Originally Posted by middle-aged mom View Post

I was just about to post that link myself!!!


So, on a $350,000 property - 2% plus VAT which you correctly pointed out, I'd forgotten that = $8,225 plus, say, $2,000 solicitor's fee (including VAT)- $10,225

On "average" commission alone - let's say 6%, in the US the cost to seller
would still be: $21,000
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Old 08-05-2008, 02:30 PM
 
3,490 posts, read 8,200,000 times
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I certainly wouldn't be holding up the UK system as an example of how a 'good' real estate system works!!
It's a NIGHTMARE to get a place to completion in the UK, and getting a decent agent is almost impossible, because they get paid so little that they really just don't seem to care. I think they are mostly on salary plus a small amount of commission. It's just a job to most agents there, and as a buyer you have no representation at all.
Selling my flat in London last time was hell on wheels. I had to push and push and push to get any info from the agent who had the listing - and I knew that any buyer who went to a different agency.... probably wouldn't get to see my flat because there was no MLS.

It did sell, but it was tough - and that was when the market was better. I happen to think that commissions over here are very high, but at least the agent is vested in getting the listing sold. In the UK there is so little accountability it's not even funny.

Neither system is ideal, there has to be a happy balance that could work.
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Old 08-05-2008, 02:38 PM
 
Location: Barrington
63,919 posts, read 46,452,709 times
Reputation: 20674
Quote:
Originally Posted by London Girl View Post
I was just about to post that link myself!!!


So, on a $350,000 property - 2% plus VAT which you correctly pointed out, I'd forgotten that = $8,225 plus, say, $2,000 solicitor's fee (including VAT)- $10,225

On "average" commission alone - let's say 6%, in the US the cost to seller
would still be: $21,000
Sole agency contracts are presently the most common real estate contract in the U.K., meaning that the sole agent represents only the best interests of the seller. That agent is not going to find the best value for the buyer, show them the competition or produce the facts of the local marketplace. The Sole agent is going ot find out as much as possible about the prospective buyer's urgency and financial situation and use it to the advantage of the seller's and their own best interest.

Because "sending out postcards" is no longer the best way to become sold in any market, the concept of a co-operating broker is evolving all over Europe. Why settle for one estate agent , when you can have thousands of Estate Agents aware of and potentially interested in selling the property, assuming co-op compensation is being offered.

Of course in the U.K., in Europe as in the U.S., sellers have many choices on how to become sold.
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Old 08-05-2008, 03:14 PM
 
Location: Barrington
63,919 posts, read 46,452,709 times
Reputation: 20674
Solo Estate Agent Fee :
UK Estate agents with homes, houses & property for sale on rightmove.co.uk


Solo Estate Agent fee 1-3%:

Sell my home, house, property, online estate agents - Sell4Less

Solo Estate Agent Fee .5-4%

In the U.S. it is ilegal for an agent to benefit from a referral to a lender. Not so in the U.K. and scams abound there, as they do everywhere:
Estate Agents Information Guide - what to look out for
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Old 08-05-2008, 03:17 PM
 
27,206 posts, read 46,537,403 times
Reputation: 15661
Quote:
Originally Posted by middle-aged mom View Post
Solo Estate Agent Fee :
UK Estate agents with homes, houses & property for sale on rightmove.co.uk


Solo Estate Agent fee 1-3%:

Sell my home, house, property, online estate agents - Sell4Less

Solo Estate Agent Fee .5-4%

In the U.S. it is ilegal for an agent to benefit from a referral to a lender. Not so in the U.K. and scams abound there, as they do everywhere:
Estate Agents Information Guide - what to look out for
I never heard of the above but I'm from a country that is united in the benelux, and that might be different. Never even heard about referral fees.
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Old 08-05-2008, 03:22 PM
 
1,949 posts, read 5,961,838 times
Reputation: 1297
Quote:
Originally Posted by sterlinggirl View Post
Of course you should ask for a discount.

Paying a 6% commission on the cost of the home is the equivalent of 18 months worth of principle payments on a 15 year note. Put that cost at both ends of the transaction, and you're giving away three years of your life for the agents help.

I don't even want to think about how long it would take to pay off the commissions on a 30 year mortgage.
Huh? The buyer doesn't pay the commission. The seller does. The commission is not mortgaged. The buyer cannot ask the listing agent to discount the commission...the agreement is betweent the seller and their agent.
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Old 08-05-2008, 03:23 PM
 
930 posts, read 2,416,360 times
Reputation: 1006
Why is this, if a doctor is a doctor and anyone can give you treatment?

Please do not compare a physician with a 7 year education to a realtor with a 63 hour education. It is laughable.

There are lazy, greedy, uneducated people at all levels and sometimes you pay more and get less.

Yes but the extremely low standard to get a real estate license and ridiculously high commission absolutely begs for the lazy and the greedy.
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Old 08-05-2008, 03:29 PM
 
Location: Barrington
63,919 posts, read 46,452,709 times
Reputation: 20674
This is a excellent source of information about some of the very recent legislation occuring in the U.K. to " fix the broken process" where one in every four sales fail between agreement and close.

The Home Information Packet ( HIP) appears to be the equivelent of a preliminary title search, estimate of energy costs and a very high level property discolure.


HIP's Defined (Property: Home Information Packs)
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Old 08-05-2008, 03:51 PM
 
1,422 posts, read 2,295,230 times
Reputation: 1188
Quote:
Originally Posted by middle-aged mom View Post
Solo Estate Agent Fee :
UK Estate agents with homes, houses & property for sale on rightmove.co.uk


Solo Estate Agent fee 1-3%:

Sell my home, house, property, online estate agents - Sell4Less

Solo Estate Agent Fee .5-4%

In the U.S. it is ilegal for an agent to benefit from a referral to a lender. Not so in the U.K. and scams abound there, as they do everywhere:
Estate Agents Information Guide - what to look out for

I'm talking from personal experience and I have never heard of anyone in the UK paying MORE than 2.5% and that was if they were selling through more than one agent.

The topic here is negotiating on commission terms.

We could argue all day about the UK system versus the US system - neither is perfect.

My view is that people are now realising that they can negotiate terms and that with more and more people accessing the internet and more and more information available fees are going to drop.

There will always be a market for agents to list, market and give viewings on properties but I've seen nothing to convince me that a buyer needs an agent.

If agents start charging more because the market slows in the UK then I can see plenty of people simply switching to discount agencies, as is clearly starting to happen here in the States - look at Redfin for example.
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