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Estate agents sell for free
Mira Bar-Hillel, Property Correspondent20 Oct 2008
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 0per cent selling fee".
Company insiders said the offer had been agreed by the firm's management last week and is available across its six branches, taking in the lucrative markets of Chelsea, Chiswick, Richmond and Kew. Normally estate agents charge between 1.5 and three per cent commission.
London estate agents are struggling to sell more than two properties a week on average, with fears that many offices will be forced to close down.
The letter from Lauristons invites prospective sellers to contact their local branch "if you are interested or if you know anybody who may be interested in this unique offer".
Some analysts saw it as an attempt to kick start sales. But industry sources immediately slammed the move as a way of killing off competitors and accused Lauristons of undermining confidence in an already struggling market. One senior figure said: "This is a crude attempt to shake independent competition out of the market place. It is a mark of desperation and won't instill confidence in sellers."
Foxtons are the only other estate agent ever to have offered a 0 per cent sales commission, but never in such difficult economic conditions, limiting it to an 'introductory' offer as they aggressively spread into new areas.
Rivals today criticised Lauristons and said vendors should be careful to look at the small print before taking up the offer.
Ed Mead, of Douglas & Gordon, said: "Potential clients need to ensure, for example, that if their property is placed on the market before Christmas but not sold until after the New Year there will still be no fee.
"But in general, when people are looking for a successful agent, one has to suspect that charging 0 per cent commission is not a good sign". London property prices are around 15 per cent down on last year and are forecast to fall by a further 15 per cent in coming months.
But the number of house sales has fallen much more sharply by up to 60 per cent.
Experts say that this is to some extent the result of the credit crunch which made many unable to buy, but also a consequence of buyers staying away in the expectation of better bargains to come.
From the beginning of this month all estate agents have to belong to an approved ombudsman scheme, but the regulator has no powers over the fees which agents charge. Lauristons refused to comment.
Rightmove said today that the level of unsold property on estate agents' books remained historically high last month at an average of 76 due to the lack of buyer activity and sellers' reluctance to accept a lower price.
Reader views (6)
As a owner of a Real Estate company in New Zealand, really thinking outside the square and making a statement is something that should be applauded not condemned, maybe if others had thought of it first they would be less hasty to criticize. I can see the positives and negatives but doing the same old everyday is the biggest crime of all. Innovate and change or die you choose.
- Leigh Roy, New Zealand, 28/01/2009 04:01
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The property market is slow, & Estate Agents such as Foxton considered to be cowboys, I believe the way forward for any estate agent is to lower their commission 1% to 1.5% , focusing on marketing their properties to the overseas investors to take advantage of the uk property falling prices instade of playing the property leaders which they are not
- Al-Asady, London , Marylebone, 03/12/2008 09:51
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If this company was confident of selling your property they wouldn't be charging you £999, need I say any more!
- Another Agent, Bethnal Green, 21/10/2008 13:44
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Giving £999 up front to an agency selling for 0% is a great way of boosting their cash flow. But beware. If they go bust because they aren't getting any proper income from actual sales your £999 is not coming back to you!
- Agency Insider, London, UK., 21/10/2008 08:49
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I understand the deal on offer is actually an upfront marketing fee of £999 with a 0% selling fee in the event a sale proceeds to exchange. In my opinion this is quite simply a ploy to boost their immediate revenues where they must have fallen sharply as the company in question has lost market share over recent years. The only winner is the agent and only loser is the seller. Where is the incentive for the negotiators to actually push to sell the property? No agent in London would push that hard to sell a property if they have already been paid. Lets not forget all agents in theory offer 0% in the event a house does not sell, where we all work on a no sale no fee basis.
- Another Local Agent, Wimbledon, 20/10/2008 13:51
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hard to feel sorry for them; for an industry whose reputation reflects a lacking in integrity, knowledge, and to quote David Cameron - well chaps you should have put something away for a rainy day.
ps - your other article about someone who bought a 120ft flat for £175k and it is now worth £80 - sorry - don't feel sorry for him either - he is a property developer - he knew the risks, and sorry no flat that small should have ever been valued so high.
Guys you all wanted to benefit in the good times - now you are just going to have to suck it up.
- Jc, se1, 20/10/2008 13:50
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