Online agency and DIY sales platform Settled claims on its website that traditional agents charge commission of up to 3.5% + VAT - equivalent to around 4.2 per cent of the sale price - even though it admits this figure is wrong.
Estate Agent Today approached Settled about a claim on its website saying: “Typically high street estate agents can charge anything from 0.75% to 3.5% of your home’s sales price in fees, not forgetting the additional 20% for VAT”.
Settled (which also says on its home page that “estate agent fees are bigger than a Texan's waistband and we don't think that's fair”) has extensively publicised the page with the 3.5% + VAT claim. Earlier this week it tweeted property professionals - including the corporate Twitter account of Estate Agent Today and the personal account of EAT’s editor, Graham Norwood - urging them to read the piece.
However, when EAT approached Settled asking the agency to substantiate the claim of 3.5% + VAT, by naming any high street agent that actually charged that much, the firm backtracked.
Gemma Young, the founder of Settled, told EAT: “Thanks so much for flagging this. Clearly it's a mistake that's slipped through into this blog post - we hope there are no agents charging this much! We'll make sure this is changed. We're a start up and are trying to release lots of helpful content but clearly we missed this error.”
Settled later got in touch to say the story on its website had been written by an intern. As of early this morning the 3.5% + VAT claim was still on the site, despite the firm saying it was wrong and would be changed.
Settled claims this information came originally from the HomeOwners’ Alliance.
However when EAT approached the HOA it was told while the alliance knew of several high end agents charging 3.0% + VAT for multiple agency agreements, it did not know of any charging 3.5% + VAT.
Settled is a DIY sales website where vendors can present their home “in front of thousands of buyers instantly without charging you a penny” according to its website. However, to have those homes listed on Rightmove and Zoopla the vendor must pay £199 at which point Settled says it will “throw in” professional photography and a floorplan. An EPC and For Sale board also incur additional charges.
On Settled’s own pricing page, it makes no reference to VAT.
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And another low cost entrant. Every one that launches can only promote one thing - price. And with so many, it's a race to the bottom. And those that understand pricing strategy understand there is no money to be made at the bottom. I do like the layout of their website though. It's similar to paypal.
The blame the intern excuse is always a popular one...When they going to take it down then?
perhaps they are proud to finish first in the "race to the bottom"???
They need to come to Ipswich where there is a price war on who can charge the lowest amount. One agent will sell your property for free for the first 20 on the market in July. Its all unsustainable and average commissions of 1% to 1.5% will return, but I am sure there will be casualties before that happens. I for one would prefer to have an actual agents office to go into to talk to about my biggest asset, so I have no issues with on-line agents. There will always be room for both just not as many high street agents are there are now.
Yes, Robert, room for both, which some high-street agents don't seem to understand. If they are no threat, why do many traditional agents get so defensive about it? Hybrid agencies are the way forward, and I'd say many high-street agents are already heading this way. The best of both worlds, offering the most successful attributes of online and traditional in one big package.
Estate agency is one area that doesn't seem to have been affected by the financial crisis and global austerity - see also rich people, bankers, politicians and house prices - but surely we can't have all these new agencies popping up forever. I walked down my high street earlier and counted 11 different branches! Surely that's not sustainable?
@Sceptical as Always - why does it have to be a race to the bottom? Cheaper doesn't always mean naffer. Look at what Aldi and Lidl have done in the supermarket sector - they've given Sainsbury's, Tesco, Waitrose and Morrisons a right kick up the backside and got rid of some of the complacency those retailers were starting to show.
To a lesser extent, Ryanair and easyJet have done something similar in the aviation industry. Fair enough, an argument could be made that they've brought all other airlines down to their level by making price a bigger consideration than comfort or customer service, but they do what they say on the tin and they're very effective at it. They get you from A to B and it doesn't cost you a small fortune along the way.
If online agents can offer a service that is as good as a traditional agent for a fraction of the price, that has to have an appeal. As long as quality isn't sacrificed, cheaper estate agent fees are surely no bad thing? If quality is sacrificed, then that's a different issue. But we'd need to know more about the experiences people have had with online agents before we can judge their quality or otherwise.
"Thanks so much for flagging this. Clearly it's a mistake that's slipped through into this blog post - we hope there are no agents charging this much! We'll make sure this is changed. We're a start up and are trying to release lots of helpful content but clearly we missed this error."
Hmm, sounds a bit like they weren't expecting to be caught out and are now backtracking as fast as they possibly can.
@Sceptical as always - the race to the bottom is happening across the whole of society, why should property be any different? Just look at Love Island and Big Brother - the fact these shows exists says it all.
Nice profile pic, by the way. Why ever did they cancel it?
Probably should have got their facts straight before they disseminated the information. Now it makes them look a little silly and unprofessional.
Blaming the intern is a little bit weak. It may well be true, but with my cynical hat on I'd say the top brass are trying their best to pass the buck.
Blame the intern and don't blame the person that was due to proof read the whole thing before it went live. If we are letting the lowest common denominator complete the wording for your site then you are asking for trouble.
Does anyone know of any good online experiences? We just hear of lots of people trying and moving back to traditional agents. The agent that gets you the best price overall for your property is the best agent and we urge everyone we talk to use a traditional or hybrid agent as they generally (I have no evidence for this just anecdotal evidence) achieve the better price. After these bargain hunters have had their time online they soon warm up to traditional high street agents as we deal with more and more sellers moving to traditional agents from online now than ever.
As a High Street industry we all need to be singing the same tune and making sure the message is delivered as a service industry and advertising the property is just a small part of what we do.
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