The average fee paid by sellers to high street estate agents in the past year is £4,055 claims Purplebricks - an increase of eight per cent, significantly above inflation.
The claim is made in a new phase of the ‘Commisery’ campaign launched today and involving TV property presenter Amanda Lamb.
The hybrid agency says the £4,055 figure comes from analysis of Land Registry data and In high-priced areas such as London, the commission paid has almost hit £11,000.
“This campaign will open people’s eyes to commisery – the misery you feel when you’ve forked out thousands on commission and haven’t got anything more for your money” says Lamb.
“Research shows that 95 per cent of people don’t realise exactly what they are paying in commission, until the bill hits and this needs to change. It is virtual money because it isn’t paid up front and in some ways the amount is hidden until the last moment. Factoring in VAT is something people forget to do as well, so what starts as a low percentage on paper adds up into a considerable sum in commission paid” she adds.
Purplebricks says traditional agency fees have - in its words - “skyrocketed as house prices have risen.”
In the 12 months to September the total value of houses sold in the UK through high street agents was £227 billion, on which they earned £4.089 billion, the equivalent of £4,055 per sale.
In the previous 12 months the average commission earned from each sale was £3,761 while in 2014 it was £3,449. Purplebricks says that as house prices have gone up, so has the amount of commission paid - up 15 per cent in two years.
In Inner London, where the hybrid says the average property price has reached £581,000, traditional agents earned an average commission of £10,871 in the past year. In the UK’s most expensive borough Kensington and Chelsea where the average property price is £1.27m, agents have earned an average £24,600 per sale.
In the North East, the cheapest region in Great Britain where the average price of property is £124,750, Purplebricks claims traditional high street agents have made £48m in 2016 on fees, taking an average commission of £2,352 per sale.
“People too often engage an estate agent without realising or thinking about whether there is a better alternative. The service they receive is the same whether the house is valued at £100,000 or £1m, therefore the fee paid for securing the sale should be the same” claims Michael Bruce, Purplebricks’ chief executive.
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When are traditional high street agents going to put a stop to the rubbish the likes of Purple Bricks and others are being allowed to state in their adverts about fees, average over £4000 per sale I wish!! Last week another online agent stated that the average was £5000. Can someone please complain to the Advertising Authorities and put a stop to these misleading adverts.
Graham Butt estate agent for over 50 years
I think you overestimate the ASA's powers.
I'm sure, if the ads were misleading, they would have been asked to take them down by now. They probably have a large legal team who have found some clever loophole that allows them to say what they say. They've been around for a while, saying this sort of thing, so surely they would have been challenged already if they were doing anything untoward? Not saying what they say is right, but they probably have some small print somewhere that covers them very nicely in the event of a challenge.
It's like their claim to be a 24/7 agent, which is utter nonsense. Doesn't exist. And who would want it to?
But they're probably able to get away with the 24/7 claim because it's impossible to prove otherwise.
Isn't it time that Purple Bricks disclosed what percentage of properties they don't sell and the clients effectively pay a fee for absolutely nothing at all. As traditional agents are typically no sale no fee clients have nothing to lose.
Weird stance from Amanda Lamb - has she been this anti-agent before?
Why doesn't estateagenttoday do and interview with independent agents and let them explain they don't all get and average fee of £5000 and don't get paid up front so don't make money if sales have fallen through also let them explain no add on and you don't have to use their solicitor and also I'm sure purpletits fees have gone up
All very well, Gavin, but this is a trade forum so not really going to have any benefit as most of the people reading this site already know that. That sort of thing needs to go in the mainstream press - just like what PB are doing. This is when organisations like the NAEA really need to fight back and big up full service agents /dispel the myths being peddled.
"It is virtual money because it isn’t paid up front and in some ways the amount is hidden until the last moment. Factoring in VAT is something people forget to do as well" this is a pile of rubbish, does she really think agents hide the commission amount until the last minute?! oh and they also conveniently forget to tell their vendor that their fee normalluy excludes VAT! I am sorry but this simply isn't the case! Personally on valuations I break down my fee to a monetary amount and add the vat so my vendor knows exactly the amount payable on completion!
Graham, Paul and Gavin you are all spot on by the way!
If you don't sign up to Purple Bricks 'up front' fee, you can pay a commission fee, plus VAT, which is a percentage of the sale price realised, so how exactly is that any different from from the traditional estate agents package? It really is about time that the regulating bodies start to look closely at the dealing of Purple Bricks, its advertising is clearly misleading and is not all that it seems!
The real commissery is when you pay an upfront fee and the agent doesn't sell the property and you can't get your money back. This is the story I am hearing from multiple customers who have used an agent that promotes commissery.
Will this campaign include more naff adverts of those two actors pretending to be the Bruce brothers? Let's hope not!
What nonsense to imply that if an agent is handling a £1m house and a £100k house (in the same area) they will both get exactly the same service. Buyer, seller and conveyancing related demands around the £1m house will usually be far, far greater than demands around the £100k house ... not always, but usually (I am handling 2 £100k flats improperly converted from a chip shop which are so complex that in hindsight a far higher fee is well warranted .... swings & roundabouts).
Typical anti-PB comments here. In most cases, fair and justified - and I have plenty of issues with their model and their aggressive levels of PR - but it does sometimes seem to be the case that they are criticised no matter what they do. They can't win. They will be bashed either way.
If they are no threat to traditional agents, why do trad agents take against them so much? Why so defensive?
Some will say PB are charlatans, but it would be churlish to deny that they are doing something right, with their share of the online market, their visible presence and their ability to get under the skins of older heads in the industry. I've said this before, but I have seen quite a number of PB boards out and about on the street. Their PR drive - aggressive and in-yer-face as it is - is very effective. People know who they are, much more than any other online/hybrid offering. Granted, they have significant financial backing and plenty of dosh to be playing with, but I think it's dangerous to write them off completely, even if much of what they preach is baloney.
Virgin offer flights; so do Ryan Air, both are seats on a plane but you'd not catch me on the latter even if it was free - I want the job done properly. The same applies!. Funny how their turnover devide customers was so much greater than the fee they misleading quote! must be all the "bolt ons you have to take!!"
Sorry, but this is nonsense. Ryanair might not offer the most luxury service in the world, but they do what they do very well. They're a no-frills airline; they never pretend to be anything other than that. They get you to where you need to be in a cheap, hassle-free way. Cheap, cheerful and reliable.
You could argue that firms like EasyJet and Ryanair have led a race to the bottom, with other airlines having to slash their prices to compete, or you could say that the low-cost airlines have made travel far more accessible for people who previously couldn't afford it. The safety standards and reliability of EasyJet and Ryanair is generally top notch. There are things you can criticise and dig these firms out for, but they do the job properly.
The idea that PB are offering some bargain basement product because they are charging less doesn't seem to hold up to scrutiny. Just because something's cheaper, doesn't mean it's of lesser quality. Just look at the revolution being caused by Aldi and Lidl, with very little impact on quality. There should be a place in estate agency for all kind of models - low-cost, high-end, middle of the road. Some agents do charge far too much, others don't. Many offer a very good service, but not all.
This idea that traditional agents are the only ones who offer a fantastic service is nonsense. There are plenty of agents out there who offer substandard fare.
Do you actually work for them Jon?? Do you actually work in our industry?? You seem rather vehement in your defence of them and against how we do business. Whilst PB are permanently slagging off the traditional agents in their advertisements, no-one does the same to them except for on this forum. If you do not like what you read, don't come on here. Contributors here are (mainly) working within this industry, and only we see it. We post opinions and it is not your right to dismiss what they are saying because it does not fit in with what you believe.
Where did I dismiss anyone? I just put across my opinion. You know, like you have.
I'm not vehemently defending them, I'm just pointing out that they're not the devil incarnate.
Anyway, let's agree to disagree.
How can you tell someone not to come on here just because they don't share the same opinion as you?
There's a chapter on the high street versus online agent issue in Smeaton’s “The Real Estate Agent and the Great Conspiracy Theory” alongside many other issues which come up here often– let’s hope Joe Public reads and is able to make a more informed decision when it comes to choosing an agent.
UPFRONTERY
up¦front|ery
[upˈfrʌnt(ə)ri]
NOUN
Describes the cheek of an estate agent to charge the full fee up front even if the property is not sold.
"the agent had the upfrontery to ask for the full amount before a viewing had even taken place”
ORIGIN
Early 2017, believed to have followed the introduction of the word “Commisery”.
Local Property Experts are about as much of a joke as you can have. Having previously worked for these idiots I can assure you they are glorified UBER drivers. They take property on the market and get paid no matter what, customers complaints are off the scale, refunds given all the time, paranoid about trustpilot, must get review on sale agreed, aftersales is almost beyond a joke and no structure to get the best price. No rapport built with buyers as don't have database. All you need to do is educate your vendors and you wont lose business or I am certainly not being affected at all. No threat in the future, you cant operate like this and succeed. Trust me they wont have anywhere near the impact some people imagine educate educate educate that's all you need to do !!!
'Research shows that 95 per cent of people don’t realise exactly what they are paying in commission'..... Are they seriously kidding to suggest only 5% of customers understand / realise what they are paying.?
I think that's pretty incredible such comments can be made without evidence of the research. Powerful for homeowners to hear when considering a move.
I personally feel the traditional method of agency will be more important than ever. Online portal leads have drastically reduced since late Q4 of 2016 and into 2017,which is very exciting.
Time to pick up the Alexander Graham Bell and do business the right way.
When will agents stop selling themselves so cheaply? The number of hours that go into most transactions are relatively high. More so if a purchaser is selling via online. Do the agents really think that the public expect them to work for so little? Doctors, lawyers, dentists, architects, etc., all have a sense of worth.
Let those that demand low fees use those agents. Busy fools that those agents are.
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