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TeddyBear

Does The Estate Agency Business Need Its Own Glass-Steagall Act?

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I've often seen it posted on here, why are estate agents so stupid, don't they realise that if they sold 5 properties at 200k they'd make more than triple one at 300k?

Thing is, I don't think the directors of EAs are stupid at all, I think many have a serious vested interest in keeping up property values because they are holding property as an asset. Take one of the aggresive agents working in London who seem more interested in selling less properties at higher value from what I've experienced, their corporate blurb says their business includes...

Financial services, including on site mortgage advisors, new homes for sale in London and around the UK, commercial property for rent and sale, surveying, conveyancing and property management.

Overall, getting more sales commission probably is peanuts compared to the rest of the business that relies on high asset (property) prices on their balance sheet etc.?

I am aware that there are all sorts of different agencies, some belong to the banks etc.. The one I'm thinking of here is a private limited company, very active and very aggressive in certain parts of London.

If estate agencies were independent entities, if their directors, parent companies etc.. could not also have another business dependent on high asset prices, it would surely remove some of the power they are exerting in keeping things "sticky"??

Not sure if I've explained the thought well - happy for it to be shown up as all wrong but it does perplex me when I see how certain agents seem so unmotivated to sell, yet for the agent (poorly paid young buck in big agency) themself, they would want the commission surely but presumably are acting on training/instructions from above to laugh off lower offers, tell sellers to hold out for more?

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if they dont get any sales, due to the agents not dropping the prices of property, when similar houes with different agents are, then they wont get any sales, nor any commission, thus go out of business. their other "products" wont get any customers either, thus their other bussinesses go out of business.

if its the EA that holding the prices up, and the vendor wants to drop/had no viewings they will move their business else where, this no more advertising revenue and will go out of business.

if a "Agent" (as you say "(poorly paid young buck in big agency") sees their competitors earing more commission, they will leave and if they are any good will find ajob else where, and the EA will be on a slippey slope of high staff turn over, or highering cheaper people with no or little experience, which will give the vendor little confidence and they wil lmove their business else where, and the EA will go out of business.

if the EA isnt flexible enough to move with the market, or even before the market, they will make a killing. there is more properties on the market than there has bee nfor a few years, so if the Directors are clever enough they will stay in business and but the new porsche this year

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They must all hope to become the last estate agent left in the country.

Try keep house prices high so that less people can afford to buy them. Less sales result in more estate agencies closing until eventually there is only one estate agent left.

Their ultimate wish must be for house prices to be so high that they only sell one a year, then they can have the rest of the year off after they sell it.

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Every member of my family puts their house on for sale with the agent that quotes the highest value. The agents know this and won't suggest a lower price. They let the vendor accept reality at there own pace. You can't force someone to come down to earth, you can but wait.

Think about the hysterical reaction to house price crash we get from our friends and family. If you're a stranger touting for business it would be suicidal to getting a commission.

As ever, the problem is the punters, not the pros about to relieve them of their money.

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Despite the suggestion creating yet another 'professional' class, maybe the answer is to have another market. EAs work for the seller - maybe we need a BA (buyer's agent) that buyers take for granted in property transactions as sellers currently take for granted on their side of the deal... at the very least, it implies an equilibralum - the more percentage to be gained, the greater 'talent' that side of the deal attracts (or something...).

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Does The Estate Agency Business Need Its Own Glass-Steagall Act?

I think it was on this forum some years ago (yes, I have lurked, I admit it) that someone suggested that EAs should be made to wear the Star of David?

I remember it because I had a mouthful of coffee at that moment & ended up ditching the keyboard.

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I think it was on this forum some years ago (yes, I have lurked, I admit it) that someone suggested that EAs should be made to wear the Star of David?

I remember it because I had a mouthful of coffee at that moment & ended up ditching the keyboard.

Missing how you got from title to this point?

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Every member of my family puts their house on for sale with the agent that quotes the highest value. The agents know this and won't suggest a lower price. They let the vendor accept reality at there own pace. You can't force someone to come down to earth, you can but wait.

Think about the hysterical reaction to house price crash we get from our friends and family. If you're a stranger touting for business it would be suicidal to getting a commission.

As ever, the problem is the punters, not the pros about to relieve them of their money.

I echo this! My dad tried to do the very same, until I got involved. Got a peaky price too.

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EA regulation?

A good thing not to let people get a stranglehold on an asset that has such power to sink our economy when it bubbles and bursts? Hardly akin to mass extermination is it? Look where the repealing of the Glass-Steagall act got us - human greed unfortunately needs to be controlled.

Edited by TeddyBear

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Every member of my family puts their house on for sale with the agent that quotes the highest value. The agents know this and won't suggest a lower price. They let the vendor accept reality at there own pace. You can't force someone to come down to earth, you can but wait.

Think about the hysterical reaction to house price crash we get from our friends and family. If you're a stranger touting for business it would be suicidal to getting a commission.

As ever, the problem is the punters, not the pros about to relieve them of their money.

Fair enough when they put them on - although I do know of a few who go for the middle price. What I'm talking about is the aggresive reaction to lower offers that a few powerful EA chains (and I'm talking about London mkt here, which is still moving, albeit slowly) around here seem to have. It just doesn't make sense if what they really want is a high volume of sales going through their books.

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Perhaps what we need is a separate valuation agency. If you want to sell your house, you contact the valuations agency, they have 3 independent 'experts' give you valuations. Your local estate agents then bid for your custom, offering the most competitive rates against prices within valuation ranges they can offer. Not that different to current process, but would perhaps give sellers a realistic valuation and competitive commission rate. What the housing market needs to shed is the fact that estate agents (to all extensive effect) bid up the asking price of properties to gain business, even if that means that sellers risk having an overpriced property on the market.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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