The founder of a controversial service helping vendors find the ‘right’ estate agency and negotiating its fees says he has had ‘the low hundreds’ of clients in its first year - and expects more as the service becomes better known.
Agency Negotiation was set up in its present form about a year ago and has had a relatively low profile existence to date. Its founder - Chris Arnold, whose background includes working for a London agency - has told Estate Agent Today that it is still “early days” but that he is pleased with the progress it has made to date.
After being contacted by a vendor, the firm recommends three estate agents from the local area as being best suited to selling the type of property at its likely asking price.
The agents are selected on the basis of interviews by Agency Negotiation as well as analysis of their performance: there are no financial or other relationships which agents have with Agency Negotiation to ensure they are included on any shortlist.
The pitches made to the vendors by the shortlisted agents are then analysed by Agency Negotiation - which is not present at the appraisals - and fees charged by the instructed agent will be negotiated by the firm on behalf of the vendor.
The firm will also look at contracts - “particularly issues like withdrawal fees, tie-in periods and so on” says Arnold.
The seller then goes on to pay £250 to Agency Negotiation on the completion of the sale, with no payment to the agent. “I’m firmly on the side of the seller but I’m not against estate agents at all and recognise how good many of them are” says Arnold.
Chris Arnold says this process means his service is independent and offers more in-depth assessments of agencies, and their appropriateness to sell a vendor’s home, than that offered by review websites.
He says some 45 per cent of sellers choose the ‘wrong’ agent, either through lack of time or lack of knowledge of the market place, and says well under a third of owners succeed in reducing estate agencies’ commissions. He also says agents are become more motivated to secure a higher sale price to optimise any ‘negotiated’ - lower - commission.
“There have been quite a few estate agents who have resisted my involvement, not recognising any role for an intermediary of this type. But quite a few others do see a role for a service like this” says Arnold.
Perhaps unsurprisingly, he says most of his negotiations have been with independents rather than corporates, although his firm’s website - which includes large numbers of audio interviews with agents, often on this subject - does also include discussions with representatives of chains like Winkworth and Knight Frank.
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Compare the Agent .com eh?? I reckon I may just set up a business that negotiates with the companies that negotiate with the Negotiators and get people to pay for that. I wonder how long he has been in our industry, which London agent he worked for and how he comes up with his figures. 45% of how many Sellers choose the wrong agent, and where from?? This idea is wrong on so many levels, and may even be open to an occasional back-hander??
Terence - love your business idea, so true!
The model is alike a broker model. I would imagine Chris (as a past agent) would know good and bad bits agents are offering and bits they may not be offering.
I do the same at times. Typically I get a agent to agree to a higher fee in order to include sub agents to increase exposure to more buyers to achieve a best price.
Two recent cases have included a Countrywide office manager opening to subbing independents and a LSLi (Your Move) to sub 6-7 local agents.
Both clients were happy with higher fees for extra exposure. One got £35k more than another agents valuation.
In the CW case they pulled in 7 viewers and our sub agents pulled in another 9 viewers for them, resulting in 3 offers from different offices.
I took zero fee, as both cases are micro corp/ independent main agency trials.
If Chris Arnold concentrates on recommending the right agent for the right type of house rather than negotiating a few hundred pounds off already rock bottom fees and charging £250 (+VAT?) for it, he'll be on to a good thing.
Richard, We find the best agents know why they're worth the higher fee. It's not in our interests to negotiate fees so low that they lose motivation. Not quite hit the VAT threshold yet. Thanks for asking.
What a load of utter rot.
Had to check for a minute. Thought I'd logged into Property Industry Eye by mistake:)
When selling your property you have to choose the best agent for you and the general public DO NOT know what is best for them. I find homeowners generally go for the cheapest or most recognised brands in their area and bringing the clients back to the independents IS a brilliant idea.
The one thing i'd have to say is that by negotiating the contracts etc do you de-motivate the vendors? as they may feel like they have passed the buck onto you.
We do not negotiate on contract terms or price - would we still be recommended? everyone else in the area charges 1/2 as much but delivers only a fraction of what we offer. would we get a look in? - doubtful as I cant see homeowners wanting to pay full price after shelling £250 out to someone who couldn't get us to move our price. How could you recommend us?
Rodger, you don't negotiate on fee or terms. Wouldn't preclude us talking. Our fee Negotiation is based on a sliding scale. If the valuation is realistic and the agency achieves 100% of the asking price, it's one of the few times we work for free. The terms (if you are referring to length of agency agreement) vary depending on the area avge days on market. If its Doncaster, I would expect longer period of agreement than Windsor, for example. At the end of the day, all we are trying to do is help those vendors that are naive avoid the ex-timeshare salesmen. For the vast majority of vendors, we're probably not needed, but for £250, peace of mind can add value.
... and justify your fee?
Rodger, there's easy ways for agents to increase stock on their books. Increase fees and win more over other agents who are lower initial costs.
Agents can easily adjust their marketing for a more win win model.
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