Why do estate agents and solicitors charge a %

homeOwner

I dont understand why estate agents and solicitors are allowed to charge a % of the purchase price as a fee.

If you buy a house worth 500K why is the work involved charged at 5K and if you buy a house worth 800K its charged at 8K? Surely there is the same amount of work involved. I can understand the difference in buying something trivial and something expensive or something simple and something complicated but 2 semi detatched houses in suburban dublin will require roughly the same work. The estate agent or solicitor probably will not do much more work on the more expensive house than the cheaper one.

Is it another rip off or am I missing something?

garred

Don't know if it answers your question but when we were signing for our last house with our solicitor (sound bloke) he was saying that people think he just signs forms. He does a fair amount of paper work, research, etc. With regard to the % thing if he slips up on the paper work he would be open to be sued so obviously higher priced houses would mean bigger law suits.
Don't know if he was waffling but he seems an honest fella. Don't know why the estate agents do it though but I'm sure there is a reasonable explanation.

Scruff

i thought there were some places that charged a fixed fee for solicitors and surveyers...must look that up

dublinguy2004

garred wrote:

when we were signing for our last house with our solicitor (sound bloke) he was saying that people think he just signs forms.

Yeah, solicitors are just like your best mate...

garred wrote:

He does a fair amount of paper work, research, etc.

very tough stuff that...

garred wrote:

With regard to the % thing if he slips up on the paper work he would be open to be sued so obviously higher priced houses would mean bigger law suits.

Your basing that argument on perception. You don't have any facts regarding the number of dud deals that actually happen.

garred wrote:

Don't know if he was waffling but he seems an honest fella. Don't know why the estate agents do it though but I'm sure there is a reasonable explanation.

An honest fella eh? Sure he's happy as larry

MorningStar

Scruff wrote:

i thought there were some places that charged a fixed fee for solicitors and surveyers...must look that up

THere are but it's a little bit of a scam too. In a new housing estate a lawyer may give a fixed rate for all in that estate. As only part of the work is individual he gives a reduced fix rate to all there. So he cuts his expense down drastically and passes on "some" of the cost.

There really isn't that much to the standard house purcahase for a lawyer a few searches in the libraray and checking some standard documentation. They charge extra for extra work. Was charge €150 for a letter that could not have taken any longer than 10 minutes.

Lawyers have a closed market that does not allow average people to operate in. They can charge what they like tradition has it by %. The suggestion that it is to cover liablity is at best ill informed. Insurance covers that.

garred

dublinguy2004 wrote:

Yeah, solicitors are just like your best mate...


very tough stuff that...


Your basing that argument on perception. You don't have any facts regarding the number of dud deals that actually happen.


An honest fella eh? Sure he's happy as larry

Yes there is more to a solicitor's job than signing forms and it is tough (might be a bit strong but I'm sure its not a walk in the park). Contracts to be read and proofed, land title to be investigated/registered, dealing with other parties reps, etc.

No I'm not basing it on perception its fact. If a solicitor is negligable in the transaction of property he can be sued. Fair enough as mentioned above they may have insurance to cover this but its probably why they base it on percentages. This is my own opinion, as I stated, and if anyone knows otherwise..great as it is what the op wants to know.

Yeah he is an honest fella, dealt with him on numerous properties, always takes calls, even gives advice over the phone without charging.

If you have a point to make fine, but there are ways of making it rather than coming across arrogantly.

Dellgirl

Quote:
Originally Posted by garred
when we were signing for our last house with our solicitor (sound bloke) he was saying that people think he just signs forms.



Yeah, solicitors are just like your best mate...


Quote:
Originally Posted by garred
He does a fair amount of paper work, research, etc.



very tough stuff that...


Quote:
Originally Posted by garred
With regard to the % thing if he slips up on the paper work he would be open to be sued so obviously higher priced houses would mean bigger law suits.



Your basing that argument on perception. You don't have any facts regarding the number of dud deals that actually happen.


Quote:
Originally Posted by garred
Don't know if he was waffling but he seems an honest fella. Don't know why the estate agents do it though but I'm sure there is a reasonable explanation.


An honest fella eh? Sure he's happy a

Whats with the sarcasam? Why couldn't you give a straight helpful answer instead of a bitter sounding litany of arsewop.

MorningStar

Blingarella wrote:

Whats with the sarcasam?etc...

Proabaly the same reason you couldn't reduced the quote to the first line
Somepeople are just like that

Dellgirl

Aren't they just....Morningstar.

ck1

If you are a member of a Credit Union you can avail of their solicitors package. From memory I beleive the fee is fixed at around €1k plus VAT plus costs. Costs are Land Regristry, Stamping, etc.

The majority of other solicitors charge a % because they can. Bit like a Price Fixing, I have always managed to negotiate a fixed fee for my clients on both solicitors and estate agents.

Always remember that the price they quote you generally is exclusive of VAT so you are paying another 21% on top of their fee. Additonally, the % fee they charge will not include the other costs, Land Registry, etc.

Victor

homeOwner wrote:

I dont understand why estate agents and solicitors are allowed to charge a % of the purchase price as a fee.

Thats capitalism for you.

bbbbb

I'm sure if you feel the percentage/amount is too much, you can haggle it down?

I would think a percentage for estate agent is good, gives them an incentive to get a better price?

MorningStar

Victor wrote:

Thats capitalism for you.

Actually that is quite the oppsoite. It's a closed restricted market hence they can call their own terms and there isn't really any thing to compete with

Victor

Perhaps, but if A is quoting 1% and B is quoting 1.5%, there is competition.

MorningStar

Victor wrote:

Perhaps, but if A is quoting 1% and B is quoting 1.5%, there is competition.

THey are begining to compete a small bit now but it doesn't make is a free market. At one point it was next to impossible to get any kind of deal out of them. They are still paid a lot for what essentially is work they don't do. Most of the leg work is done by somebody else and if it were done by time as oppsoed to % it would be a fairer system. There are very few occupations that can charge on any other basis than time and materials even doctors do it by that. Imagine a doctor got his nurse to do his job and then charged you based on your weight!