Things are looking up for the UK property market and, unfortunately, therefore rather gloomy for estate agents. How so? When things are somewhat tough estate agents can attempt to sort of justify their high fees by demonstrating how long it takes to sell a property, how much effort has to go into the process and how few transactions are ongoing from which to net the spoils of their labours. (I use the term 'labours' very loosely indeed however).
The recent news from the Centre for Economic and Business Research is cause for celebration for almost everybody. They say that house prices will rise by 16% by 2015. It should be good news indeed for those estate agents who've been suffering a drought in sales since those heady days of 2007, as well as all the doomsaying from economists and pundits alike. But traditional estate agents, lording it up in their uber-posh high street branch offices, ought to be taking this kind of heady news with a certain amount of caution, because once their job becomes easier again, it's going be more and more difficult for them to justify their outrageously high selling fees.
The average estate agents selling fee in the UK is a wallet draining 4000 or so. In London it's nearer double that. When prices increase their trajectory once again, more buyers will flock to jump back on the property bandwagon. As they do, homes will sell quicker and easier making the property spivs' lives revert to type as one of consequent ease. It won't be long before the public, ably assisted by a ravenous media, begin to question how a job that is already easy can then get easier and, as prices rise, net the benefactors even higher commissions for less effort.
Until the property market starts its upward trend for real, there's not much point trying to play off one estate agent against another when it comes to commissions, but as soon as that trend starts there'll be even less point because the best place to go when it comes to those selling fees is ... online. Online estate agencies can spread their marketing message much further afield than traditional offline agencies. They're also as knowledgeable, professional and effective as their high street cousins. Perhaps even more so. And they can actually justify their fee scale - not that they'd really need to, because for the most part those fees are about one-tenth of the commissions charged by those high street cousins.
So as the property market takes its first faltering steps towards a recovery that's long overdue, we may well be seeing the end of the estate agency industry we've come to know and love. (Pardon my coughing, I have something stuck in my throat.) It's an industry that could become a victim of its own success, because while prices rise towards the peak predicted by the Centre fro Economic and Business Research, typical selling fees could well be plummeting. So what's gone up over the years, may well, in the case of estate agency fees, come right back down to earth again, taking the whole industry with it. The old estate agency paradigm may well end up dead ... so long live the new, sleeker estate agency industry.
The recent news from the Centre for Economic and Business Research is cause for celebration for almost everybody. They say that house prices will rise by 16% by 2015. It should be good news indeed for those estate agents who've been suffering a drought in sales since those heady days of 2007, as well as all the doomsaying from economists and pundits alike. But traditional estate agents, lording it up in their uber-posh high street branch offices, ought to be taking this kind of heady news with a certain amount of caution, because once their job becomes easier again, it's going be more and more difficult for them to justify their outrageously high selling fees.
The average estate agents selling fee in the UK is a wallet draining 4000 or so. In London it's nearer double that. When prices increase their trajectory once again, more buyers will flock to jump back on the property bandwagon. As they do, homes will sell quicker and easier making the property spivs' lives revert to type as one of consequent ease. It won't be long before the public, ably assisted by a ravenous media, begin to question how a job that is already easy can then get easier and, as prices rise, net the benefactors even higher commissions for less effort.
Until the property market starts its upward trend for real, there's not much point trying to play off one estate agent against another when it comes to commissions, but as soon as that trend starts there'll be even less point because the best place to go when it comes to those selling fees is ... online. Online estate agencies can spread their marketing message much further afield than traditional offline agencies. They're also as knowledgeable, professional and effective as their high street cousins. Perhaps even more so. And they can actually justify their fee scale - not that they'd really need to, because for the most part those fees are about one-tenth of the commissions charged by those high street cousins.
So as the property market takes its first faltering steps towards a recovery that's long overdue, we may well be seeing the end of the estate agency industry we've come to know and love. (Pardon my coughing, I have something stuck in my throat.) It's an industry that could become a victim of its own success, because while prices rise towards the peak predicted by the Centre fro Economic and Business Research, typical selling fees could well be plummeting. So what's gone up over the years, may well, in the case of estate agency fees, come right back down to earth again, taking the whole industry with it. The old estate agency paradigm may well end up dead ... so long live the new, sleeker estate agency industry.
About the Author:
Home buyers don't bother to traipse into estate agency offices these days. 90% of them search for estates online. eMoov cover the whole of the UK but save money by not having hundreds of estates which you otherwise end up paying for in high estate agents fees. eMoov are online estate agents. They are a step up from private house sales and ten times cheaper than the High Street. Why pay more?
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