Monday, October 20, 2008

Do they have the reserves to put the competition out of business?

Estate agents selling homes for NO fee as property sales collapse

A chain of London estate agents is offering to waive its fee on any property sold before the end of the year. The move, which could cost it up to £10,000 on each transaction, comes as sales have collapsed due to the credit crunch and financial crisis. A leaked email reveals how a senior sales executive at Lauristons has written to potential clients in south and west London offering to sell their homes 'for an unbeatable 0 per cent selling fee'.

Posted by whostolemyendowment @ 12:43 PM (929 views)
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7 thoughts on “Do they have the reserves to put the competition out of business?

  • a) charging “up to £10,000” to sell a property is criminal.
    b) surely this attracts vendors not buyers, so what is the point? The shortage isn’t in the number of properties for sale!!

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  • Oh dear, the vultures have decided to eat themselves.

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  • This could be good. Vendors can drop the asking price by the amount they are saving without losing out. There’s another 2% drop then! All paid for by the EA. Shame they’ll be out of business so quickly…

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  • I think the idea is to get vendors to drop their price by that amount to attract more interest.

    EAs know that it only takes a few vendors to drop their price in a particular area for others to follow suit, in the hope of speeding up the crash and get the ball rolling again sooner.

    Not a bad idea. I suspect it will have similar effects to the governments stamp duty holiday.

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  • This can (and will) only increase supply and thus push prices down even faster. It’s being driven buy the fact that agents live on VOLUME more than PRICE.

    For example, an agent would much rather sell 10 houses quickly for a £5k fee each than 5 houses slowly for a £9k fee each. People like to be busy, as well as earning.

    So basically volume is low is because prices are wrong. Therefore, the smart agents are going to force prices down. The agents’ fight for survival means that this is going to happen more and more.

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  • I think estate agents have byu-passed the anger stage of asset bubble bursting psycholgy and gone straight to desperation !

    Denial, Anger, Desperation, Acceptance

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  • Does that mean completed by the end of the year ? 10 weeks ? In which case very few homes are going to be sold fee-free. I guess they also insist on sole trader status for a minimum six months so they will get a lot of properties on their books in return for a small outlay.

    Not a bad marketing ploy.

    If I was a seller, I would rather have someone pay for my HIP.

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