Buying Agent and Estate Agent - A Potentially Incestuous Relationship?
Good buying (or property finding) agents should know their patch well and they will have bought quite a lot of property in the area for their own account and / or for other buyers.
The property finders work for their clients to find properties for them.
They take the hassle out of the search process and should get good prices from agents and other sellers by using their buying power and knowledge of the market.
The fees they charge to their clients will involve an up front registration fee and a final finders fee.
The finders’ fee may be based upon say doing a detailed report on 15 properties for which a fee of upwards of £2,000 will be charged. Alternatively, the fee will be based on the price of the property purchased - 1.5 per cent to 2 per cent is normal. All these charges will generally have VAT on top and the registration fee will be at least £500 plus VAT, which is normally deducted from the final fee.
And for the estate agent, the existence of buying agents makes their job that much easier.
A property comes up where the estate agent knows he has a buying agent waiting for exactly that kind of property for a client.
The estate agent knows the property can be sold easily with a minimum of aggravation. Indeed, to make sure he gets the business from other estate agents, the estate agent will make it known to the vendor that he has a buyer just waiting to snap up the property.
In these circumstances, if the estate agent is up against other estate agents, he may well be confident enough to reduce his commission to get the business, because after all, he won’t have the usual marketing expenses to incur on this sale. The buying agent will insist that the property is taken off the market - and the vendor will normally agree to this.
The danger is that the relationship between the two sets of agent becomes too incestuous and the vendor loses out or, in the worst case, both the buyer and seller get "ringed" with the agents pocketing commission for doing a duff job.
The property finders work for their clients to find properties for them.
They take the hassle out of the search process and should get good prices from agents and other sellers by using their buying power and knowledge of the market.
The fees they charge to their clients will involve an up front registration fee and a final finders fee.
The finders’ fee may be based upon say doing a detailed report on 15 properties for which a fee of upwards of £2,000 will be charged. Alternatively, the fee will be based on the price of the property purchased - 1.5 per cent to 2 per cent is normal. All these charges will generally have VAT on top and the registration fee will be at least £500 plus VAT, which is normally deducted from the final fee.
And for the estate agent, the existence of buying agents makes their job that much easier.
A property comes up where the estate agent knows he has a buying agent waiting for exactly that kind of property for a client.
The estate agent knows the property can be sold easily with a minimum of aggravation. Indeed, to make sure he gets the business from other estate agents, the estate agent will make it known to the vendor that he has a buyer just waiting to snap up the property.
In these circumstances, if the estate agent is up against other estate agents, he may well be confident enough to reduce his commission to get the business, because after all, he won’t have the usual marketing expenses to incur on this sale. The buying agent will insist that the property is taken off the market - and the vendor will normally agree to this.
The danger is that the relationship between the two sets of agent becomes too incestuous and the vendor loses out or, in the worst case, both the buyer and seller get "ringed" with the agents pocketing commission for doing a duff job.
This entry was posted by lettingfocus, on
Tuesday, April 24, 2007.
