Estate Agents - What do I get for my money??

Dinarius

I am selling a small site with full PP in Dublin 2 via a very reputable estate agent.

The ask on the site is (excess) €850,000.

They want to charge 1% up to €925,000 and 1.5% above that.

How does that sound?

What surprises me is that they want me to pay for the For Sale "V" board, as it is known. A cool €690 + V.A.T. @ 21%.

They are not going to produce a brochure unless I pay for it.

They will send out press packs and information packs to anyone that is interested.

All classified ads to be paid by me @ €6.00 per line.

Is this all normal? Could I do better?

Thanks.

D.

Imposter

That sounds ridiculous. They want to increase the percentage they make once it's over a certain amount! That can't be right. Most professionals reduce the rate the bigger the transaction.

As for paying for all those things seperately what exactly do you get for that 1%/1.5%? It doesn't look like you get anything to me.

But then again i've never had any dealings with estate agents so what would I know!

Borzoi

Imposter wrote:

That sounds ridiculous. They want to increase the percentage they make once it's over a certain amount! That can't be right. Most professionals reduce the rate the bigger the transaction.!

Normalish rates that. The idea of the rate increase is to incentivise the agent at the higher end. Having said that - what do you think it's worth? I'd only give the bonus rate above the value that I think it is worth.

BTW It really does annoy me to see ad an for 'excess' or advertising a price way below what you expect for the site/building. It just wastes everybodies time.

But €690 + for the for sale sign, ouch

joejoem

Im an estate agent, our fee does not increase with the value of the property, and our standard marketing fee is €380 which includes the sign, advertising on our own website and www.myhome.ie and brochures then our window displays that are spotted around. It would seem you are being ripped off. Are you selling by Public Auction or by private treaty?

antoinolachtnai

Well, it's cheap if he gets you a good price, and it's very expensive if he doesn't succeed in selling it.

I would think that at this level, you should be prepared to pay a premium to deal with someone who really knows what he/she is doing. The advertising of the property isn't really that critical. If he gets the sale, this guy will just open his pocketbook and ring his developer friends to see if any of them wants to buy it off you. That's what you're paying for.

You have to accept the fact that the guy may not really know you that well, and doesn't know whether you are really prepared to sell at a realistic price, so he wants to make sure costs are covered.

Personally, I would propose giving them:

1200 euro marketing fees up-front for an agreed campaign. (why would you want a brochure to market a site to a builder with his lower rear torso hanging out of his trousers? It's the kind of thing you either want or you don't.) Be sure to keep the sign if you are paying for it. If things don't work out to your satisfaction with this agent, you can always use it to put up your own sign afterwards.

0 percent for the first 850,000 (what's the point in giving a commission up to this level? I am assuming that almost anybody could sell this site for this price.)

15 percent for the next 50,000

30 percent of anything over 900 grand.

This would give him some incentive to hold out to get you the price you want. I have no idea whether they would agree to something like this. But I would certainly give it a go. It would be an interesting discussion anyway, and it might flush out what he really thinks is a realistic price for the property.

If you want to sell within a certain timeframe, you should factor that in too.

You could also tread into the dangerous world of the 'personal bonus', payable directly, if you have a sufficiently tough neck.

I'd be interested to hear how it works out!

Whatever you agree, the objective should be to give the guy an incentive to hold out for the best price he can so you make as much money as possible.

joejoem

I would not agree. Working at 1% is incentive enough to get the highest price. If you have doubt in your agent you should withdraw it. I don’t know where you are getting a budget of €1200 for marketing, this is way over the top unless you are planning to advertise a spread in the times over 3 weeks. There should be no reason for incentives, all offers should be relayed to the vendor and the ultimate decision should rest with him. If I were to sell a house at a price under its value, I would expect to quickly gain a bad reputation. I think your best bet would be to speak to a few agents and let them compete for your business.


"1200 euro marketing fees up-front for an agreed campaign. (why would you want a brochure to market a site to a builder with his lower rear torso hanging out of his trousers? It's the kind of thing you either want or you don't.) Be sure to keep the sign if you are paying for it. If things don't work out to your satisfaction with this agent, you can always use it to put up your own sign afterwards."

I would eat my hat if all parties interested in this site were "builders with there lower rear torso hanging out of his trousers?" this is no longer the case, of all the developers that I have dealt with, none would arrive to view a site in such a manner, in fact none would work like that. I would be very dissapointed if I went to view a site and found that there was no brochure with a picture, measurements, location, price etc...

antoinolachtnai

Well, the guy said he would do an information pack and send it out, didn't he? The point isn't how developers might or might not dress (not that it matters) it's just that they have a different way of evaluating property from their buy-to-let and owner-occupier brethren.

The problem with flat percent commissions is that they give the agent very little incentive to try to get the best possible price. You would be almost as well to negotiate a flat fee for a sale and trust in the agent's goodwill. Why would the agent bother to find a purchaser for 905k, if he already has one at 900k? All he's going to get is an extra 50 quid, hardly worth driving across town on a busy day for. As a result, the seller could lose out.

I'd be interested to hear your view on the most efficient way to market a property. 1200 euro isn't necessarily a lot for a marketing budget in my opinion. It's a nice big sign and a couple of four-line ads in a couple of newpapers for a couple of weeks. It's not going to set the property market alight. I am open to correction on this. There may be a better way.

All just my opinions of course. Be interested to hear more of your views from the 'inside'.

ur mentor

Price for a V shaped board is not too bad. However I wonder is it needed for this tyoe of sale?
1% commission is OK. I would be more interested in time frame and when agent gets paid. I have seen them deduct fee from deposit. They are paid but sale is not complete and they often can have a great deal of work with solicitors etc getting the deal to actually finish and all the money to come in. Human nature being what it is ther eis no extra money in it for them to rush. So agree to pay them when you get all the money and insist on short closing date. no more than 3 weeks.
No way would I agree to pay 30% regardelss of how high the price went.
It is the buyer you need to concentrate on. Will this agent get to the widest possible number of buyers prepared to pay more than a similar property? If not then he cannot get the highest price. If he can then he will. Choose an agent with a success rate and preferably with a recent sale of similar as they should have underbidders.
All the best :cool:

Dinarius

Many thanks for all the replies. Very useful.

I am selling by private treaty.

I have not yet signed the contract with the agent. I will probably be doing so on Monday afternoon.

Yesterday, I made a couple of calls to a developer (who would have to get a builder to build it for him) and a builder with financial backing. Both expressed interest and called to me for plans and planning permission.

The developer called me back and said that the numbers didn't stack up for him. No way could he justify anything near the €850k asking price. In fact, it would be nearer to €700k. He wasn't offering that. He said I should proceed with the sale and see how it went. He was dead straight about it. He also agreed that there was no need to spend much on advertising. A couple of classified ads would do. In his view, the agents should sell it off their database of builders/developers.

I have to say, this scared me a bit. I've been having a look at the numbers and I have to say that he may have a point.

If the builder comes back to me on Monday with any reasonable offer, I would be very tempted. A bird in the hand and all that............ Right now, €750-800k would look very tempting and would get me the house I've agreed a price on!!

D.

antoinolachtnai

I would definitely get it on the market in some form to validate the price you got offered.

I would definitely get an offer from the builder before you start. You can go back to it and avoid the commission later if the agent doesn't deliver.

If you are in a hurry, at least get it on the market for a week or two before closing out for almost 100k less than you'd planned. If the agent even gets you an extra 9k for it, then it'd be worth it.

Dinarius

Thanks again.

To be honest, I'd be surprised if the agents have got it so wrong in their calcualtions. But, even if their 20% out (i.e. I get only €680). I'd still be happy. I have agreed a price on, what is for us, our dream home, and I don't want to lose it no matter what. The price is excellent, even for Dublin.

As they say in the stock market, "You must always leave something for the next guy." Too true. If a builder is willing to ensure that I don't lose this house, he can have the building at a fair price without risking loads of others bidding against him once I sign up with the agent.

By the way, how much is a booking deposit on a house of 800K? My accountant says €5k is enough. Correct?

Thanks.

D.

antoinolachtnai

It's entirely up to you. You could ask for more if it makes you feel more comfortable.

I'd find out how long he plans to take to close and get you your money. If he thinks and your solicitor thinks it'll be done in 3 weeks, that's almost certainly enough. If it's going to take more than 5 or 6 weeks, you'd need to get more than that, just to make sure the guy stays focused.

Be sure you're completely comfortable and that you're doing the right thing. This could be the only opportunity you ever get to make an extra 100 grand just by waiting a week or two longer.

Dinarius

antoinolachtnai wrote:

This could be the only opportunity you ever get to make an extra 100 grand just by waiting a week or two longer.

Too true.

It may also be the only chance I ever get to buy a house like this at this price. Everything seems to have conspired in my favour; it was withdrawn at auction in November; no one looks for a house in the weeks leading up to Christmas; the For Sale sign was taken down; the only other viewers last week were the bidders at the auction.

Ever feel that something has your name on it? That's how I feel right now.

If I get one year at this house, I'll have it worth €1m+. But, that's not the point..........

I want it. The price is fantastic. I am willing to concede a bit on the sale of my building in order to get it.

By the way...........anyone got any experience of bridging? I may need it for a while. What % should I be expected to pay? I want an interest only load until the dust settles.

Thanks.

D.

lomb

where is the site in D2 , il tell u what its worth approx.

lomb

the problem with estate agents i feel is that some unethical ones may choose to sell a site to a builder mate who is a good customer and not relay back the potential buyers bids. this may be more of a problem in the country.
u probably wont suffer this problem in dublin with a reputable agent.

i think the highigh fee for erection of the board is so they have made back their costs in the case u choose to withdraw it.
1% isnt much though overall although u will have to pay 21 % on this.

antoinolachtnai

Well, you can certainly get bridging. It will probably have to be from your regular bank. Not an easy item to shop around for.

3 months bridging on on 800,000 euro is likely going to cost you 800,000 * 7 percent (or so, you're going to have to pay a premium because you haven't signed contracts on your sale yet and they might well want a mortage on the site as security, adding to the cost) * 1/4-year = 14000 euros.

You always end up needing more bridging than you expect.

Would you not consider asking the seller if they would hold the closing on the house for 12 weeks? You could afford to pay them 14 grand extra to make it worth their while.

(And remember, if this advice doesn't work for you, let me know and I'll send you your money back!)

lomb

wel i def dont feel 7% is alot. the fact that ur dealing with 800000 means it only appears alot. in the same way 1% of 800000 is 8000euro appears alot for commision.
if u shop about id say ud get it closer to 6% though.. dont try the delay tactic as ul be gazumped in a rising market. if its the house u want dont let the natural tendancy to be miserley to get in the way. just my 2 euro cents.

antoinolachtnai

Well, it's certainly a couple of grand, which is a lot, at least it would be for me! If you need to spend it though, you need to spend it and you're right, there's no point in being cheap about it.

The problem Dinarius is going to have is that they might try to charge him a commercial lending rate on the bridging, because he doesn't have any sale contract in place for the site.

I'm not talking about leaving the property on initial deposit. You would sign contracts, but the transfer of money and title wouldn't happen until 12 weeks hence. This is a pretty common thing to do. You couldn't get gazumped (at least not legally, anyway).

lomb

antoinolachtnai wrote:

I'm not talking about leaving the property on initial deposit. You would sign contracts, but the transfer of money and title wouldn't happen until 12 weeks hence. This is a pretty common thing to do. You couldn't get gazumped (at least not legally, anyway).

this would be ok i think.

mayhem#

My advice?

Get a sign made up yourself, nothing to fancy just aslong as it clearly states "for sale", size of the property and contact details.
Also make sure you have a good dependable sollicitor who will handle the sale for you.
Whip up a nice little brochure yourself on a pc and print it on glossy paper. Then sit back and wait.

If that doesn't atractenough atention and sell the site you should contact several estate agents and compare their prices. Be clear to all of them that you are talking to sevela agents and bargain the best deal out of them.
Be sure you get an all-in deal which include all promotional work, brochures etc.

E.

Selik

I know of a site in Sandymount that sold for €360,000 just over 2 years ago. The site in question was tiny (not much over 1300sq ft) but it had full PP for a dormer bungalow (which is now built obviously!) - just goes to show how important location is to some people...