The former head of Rightmove’s lettings division has blasted High Street estate agencies for “living in the past, charging exorbitant fees and not doing enough to justify their meaty commissions.”
Sam Mitchell, who quit the portal at the end of last year to become chief executive of online agency HouseSimple, has also accused High Street agents of “cashing in” on almost half a billion pounds of fees paid as commission by sellers in the past 12 months.
In a fierce attack on traditional agency, Mitchell even cites his former employer in part of his criticism on the industry. In a statement he says: “Consumers want value for money, and are, quite rightly, asking ‘why am I paying an agent thousands of pounds for listing a property on Rightmove and managing a few viewings?’”
Alongside his outspoken comments, Mitchell also cites the results of a survey in June of 1,023 people - all of which have used an estate agent to sell their property.
It says:
- 89 per cent want agents to be more transparent over their fees;
- 41 per cent claimed to be unaware that they could have negotiated their commission fee;
- 29 per cent wished they had negotiated a lower rate after they had agreed it;
- 46 per cent felt pressured by their estate agent;
- 20 per cent said they were not confident negotiating so didn’t challenge their agent;
- 55 per cent said they paid at least 1.0 per cent commission to the estate agent;
- over 25 per cent claimed to pay between 1.4 per cent and 2.0 per cent.
Mitchell uses this data to claim that sellers could potentially be saving millions of pounds every year in fees if they were prepared to negotiate with the agent.
He says that if they haggled down their initial quote by just 0.25 per cent they could have saved £487m in agent fees. His calculations are based on Land Registry data for house prices and Office for National Statistics data for the number of homes sold by High Street estate agencies.
A statement from his agency claims there is “so much confusion over fees” and “a wide disparity between agents’ prices, with some websites not even listing their fees.”
“Unfortunately, for many people, they don’t feel comfortable haggling, and estate agents are extremely good sales people who can put forward a convincing argument as to why they are worth the commission they are charging. But at the end of the day they also want to secure your business, and if they are as good as they say they are, then your house shouldn’t be on the market for long, and they will have had to do very little work to make their commission” says Mitchell.
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Sam, with 71% of all you surveid saying they did not wish they had negotiated their fee lower; sounds as if most High St agents are doing a pretty good job of demonstrating their true value to clients.
It smacks of desperation when another onliner, yet to make a profit, and in need of ever more investment to stay afloat, starts quoting public dissatisfaction with estate agency to try and get publicity. It also shows a lack of understanding of the market to suggest that these agents are all raking it in, when it is widely known that agents are facing the worst financial pressures in decades. Cheap PR Sam.
Such comments or outbursts are one of many reason(s) the public have little or no respect for our indsustry
Such valued commentary and opinion about the public getting value for money from estate agents from an ex-employee of a company who, as everyone knows, offer exceptional value for money - for just listing a property! Pot, kettle Sam.
Bless him,
Guessing it will not be long until he jumps ship to a new employer soon ....
This online vs high street debate is far from black and white. In reality the best high street estate agents could charge 4%+VAT and still provide better value for money compared to an ‘internet only’ listing agent.
Remember ladies and gentlemen.........traditional estate agents still get instructed on over 90% of properties going to market........Purplebricks made a loss of over £26,000,000 last financial year and their share price has collapsed by 37.58% in the last 12 months. Stay strong....keep giving great service and keep your costs down and the rest will follow. Push on.........
Well said Freedom Road
Don’t you just love it when some highly paid exec hoping for a massive payoff lectures others on the morality of making money, it’s kind of ironic don’t you think? Maybe he should resign and give his job to an illiterate unemployed person, after all, how hard can it be...
Here here to all the previous comments . The only trouble is the on-liners continue to win the PR battle as traditional agents as a profession has always had a bad name. Fake news and fake facts will keep the crowdfunding investors coming - it's just how long they hang on in and realise what really is going on.
Meanwhile the rest of us in the real world are cutting costs providing excellent service and are held to ransom by Rightmove etc!
Onwards and upwards !
Latest P&L for HS in Jan 18- a loss of £13.7m. Have an awesome day everyone.
All the traditional agents above talking about the "loss" for Purplebricks show only your own ignorance and myopia. These aren't losses, these are the up front costs for taking over your industry. Amazon STILL makes losses in some quarters. Yes it is is the most valuable company in the world! (perhaps you all think it is worthless too). Investors are supporting PB like they supported Amazon for the same reason. They see the MEGA amount of wasted fees and costs that are currently bled out of customers by the high street model. They see that for a very modest (yes modest) upfront investment they can do to you what Amazon has done to crappy local shops and accrue that fee income (reduced of course) to themselves.
:) you think online estate agency is like Amazon. I guess it is, in the same way as North Korea is like the USA. Lastminute.com
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