September 11, 2023

Why Estate Agents need to charge higher fees


It is probably inappropriate to make a general statement around Estate Agents and Lettings Agents and the fee levels they charge, as there are a number of contributing factors to take into consideration.

What is fair to say though, is that in general in the UK, we have over the last 30 years allowed ourselves to be sucked into a fees war and fight to the bottom, in order to try and win as much business as possible, rather than justifying our true value as a business and charging our actual worth based on the service we deliver.

In countries around the world, you will expect to pay as much as 5% and more for the sale of a property, yet in the UK we have some agents charging .75% and sometimes even .5% to win businesses, with the national average being between 1.25 and 1.5%. Charging low fees just devalues and undermines the service that great agents deliver, and only serves to reflect the levels of service that are generally associated with Estate Agents in general – and we all know that that is poor at best!

I understand that charging excessively high fees in an environment where fee levels are low in general is probably the wrong approach, but do we as agents actually defend our fee levels to the extent we should? I would say, definitely not. These days it is far too common for a Lister/Valuer to capitulate as soon as they hear that Mr & Mrs Vendor are also talking to the cheap fee merchants in the town. I struggle to fathom why this is the case.

Whatever happened to the fine art of selling? That combination of skills, traits and behaviours including excellent communication skills, empathy and understanding, persistence and resilience, adaptability, and integrity and ethics, and the ability to drive and close a sale. The problem is, they are hardly taught anymore, and where they are, it is certainly not to the extent that it should be. One of my associates says “Selling is not a dirty word, it is an art and a science to be studied” and we as a business are very conscious of that and try to hammer this home with all of the delegates we engage with.

Having a robust sales process will ensure a higher success ratio. The ability to ask high quality questions, ensuring you get high quality answers to enable you to transition people and move them forward will result in more conversions. Building value is hugely important but can only be achieved once you have properly qualified your clients and fully understand their requirements and this will only happen by asking those high quality questions. The influence of persuasion will help your clients understand what value you offer over and above the competition and help them to make the right decision in instructing you. And finally, the ability to overcome objections and the confidence and ability to create them where necessary, in order that you can start to close the sale, will prove to be the final and winning act in your performance!

Selling really is an art. The ability to effectively sell requires a certain level of creativity, intuition and skill. Sadly, today in our sector, there is a distinct lack of this ability; at SJM Consultants we are striving to effect change.