Should You Use a Buying Agent? - Part Three
Of course, buying agents should use their skill to buy at a good (i.e. below market) price and you may want to structure the deal you have with them to incentivise this.
Ask about the agents degree of local knowledge in terms of capital values and rental income and get at least three references. If they are unwilling to give them, then go to someone else.
Buying agents charging structures vary a great deal.
Some work on a free initial service with fees only payable on exchange of contracts or completion. Others will charge a basic retainer or registration fee – typically this will about £1,250 in London, though this can be much higher or lower depending on how up or down market you are going.
The fees will typically be 1.5% to 2% plus VAT of the purchase price. Some companies will deduct the retainer fee from this, some will not.
If you vary the percentage to incentivise them to get a good price, that's fine but this implies you know something about market values where you are buying.
See also part one and part two of this guide on earlier blogs.
Part four out tomorrow.
Or go back to main site at www.lettingfocus.com
David Lawrenson
Ask about the agents degree of local knowledge in terms of capital values and rental income and get at least three references. If they are unwilling to give them, then go to someone else.
Buying agents charging structures vary a great deal.
Some work on a free initial service with fees only payable on exchange of contracts or completion. Others will charge a basic retainer or registration fee – typically this will about £1,250 in London, though this can be much higher or lower depending on how up or down market you are going.
The fees will typically be 1.5% to 2% plus VAT of the purchase price. Some companies will deduct the retainer fee from this, some will not.
If you vary the percentage to incentivise them to get a good price, that's fine but this implies you know something about market values where you are buying.
See also part one and part two of this guide on earlier blogs.
Part four out tomorrow.
Or go back to main site at www.lettingfocus.com
David Lawrenson
This entry was posted by lettingfocus, on
Wednesday, January 10, 2007.
