Real Estate Agents

[Olaf]

I was reading an article this morning online and it made mention of Estate Agents in the UK and their fees. What blew my mind is that it stated that the average fee for selling your home over there was between 1-2%. We're charged 5-7%! What's with that? Now we don't have a VAT when we sell property, but that's insane.

 

[UKDEB]

And we even have a problem with the 1-2%. Well, I don't personally, but the British seem to believe that certain professions should provide their services free of charge, or at least at rates which would soon put them out of business.

What do your realtors do for their 5-7%? Ours market the property and show potential buyers around (although many vendors end up doing this themselves). They also negotiate with prospective buyers, but it could be argued that, because the deal is commission based, they might be more interested in getting a sale than getting the best price for their client.

We then also have to pay a property lawyer to deal with the conveyancing.

 

[SidB]

Originally posted by UKDEB
And we even have a problem with the 1-2%. Well, I don't personally, but the British seem to believe that certain professions should provide their services free of charge, or at least at rates which would soon put them out of business.

But some of them don't even deserve that. When I sold my last house it was valued at £132,000 (you'll be lucky if you get £128,000) by one agent, and £145,000 by another. I told them to put it on the market for £162,000 (ypu'll never get that, trust me) and got an offer in days. The agent never showed anybody around, I didn't get a sign put up, and I negotiated the price with the guy. In the end I phoned them and told them I'd sold it for them. So for printing off a dozen A4 sheets and making half a dozen phone calls they billed me for £2,800. No wonder they have such a bad press.

Havr you noticed how many of them drive expensive German cars ?

 

[Olaf]

It doesn't sound as if our agents do much more than yours. They advertise, show the property, schedule the closing, contracts, back and forth between the buyer and seller. etc.

We've bought several houses and I hate closings. You have to take a big check in to one, and you walk out with a pile of paper that you don't understand. When you look at the final closing statement, you feel as if everyone has gotten a piece of you. It's such a racket. More people are selling homes themselves. You can see homes at :

www.forsalebyowner.com

Just pump in a zip code. I think those people pay that company something like 1%, but I'm no sure about that.

How much is the VAT when buying a home?

 

[SidB]

Hi. The VAT is 17.5%, and is only payable on the fee, not the property value. Thank God.

 

[Mrs Dazzle]

. . . but don't forget one of the biggest expenses when buying a new house over here is our Government's Stamp Duty:

Over £60,000 but not more than £250,000 - 1% of purchase price;

Over £250,000 but not more than £500,000 - 3%;

Over £500,000 - 4%

The average price of a home in the UK is now approx £162,000, making it very difficulty for first time buyers to jump on board.

Around our area, in the New Forest down on the south coast of England, and especially in our village, to get something under £250,000 is rare

Steph - I know you have to pay some kind of property tax, how does that equate to our stamp duty?

 

[vernon]

I do think that American estate agents have a much higher degree of responsibility compared to ours, but even so I do think the charges in the US are increadably high. There has been a lot of pressure put on by the banking industry in the US to get involved in the realator business, if they are allowed to do so it is certain the rates will decrease. It is down to a fight between the two parties' political lobbying agents.

While there are many honourable realators in the UK there are also a lot of sharks about, anyone selling their house should really make sure they do their own research because if not you run the risk of getting a rogue who undervalues your house in order to get a quick sale ( and commission).

 

[Olaf]

Originally posted by Mrs Dazzle
Steph - I know you have to pay some kind of property tax, how does that equate to our stamp duty?

Our home is valued at $400,000 (that's a lot over here), and we pay around $4000.00 a year property taxes. It's just an average home, but we live near DC and housing costs more here than most places. When you close you have to bring enough for six months worth of insurance and property tax, which goes in an escro account, the mortgage company then pays the bills.

I can't believe the cost of a home over there. It's absolutely nutty. I guess you're just running out of land to build on? We have that problem in my area. The county over, closer to DC, has just about run out of land, and they're putting up these "McMansions" of 6,000+ ft on tiny postage stamp lots. Huge homes, smack up next to the neighbors. That's what I like about our home, it backs to the woods, and it's about 1/3 acre. Of course, we have terrible traffic. I don't think it's possible to build enough roads for all the cars around.

 

[UKDEB]

Ah, now you've opened a can of worms. We pay £1700 a year Council Tax (to local government), which is, I guess, similar to your property tax.

 

[Kilted_Yank]

Originally posted by Olaf
The county over, closer to DC, has just about run out of land, and they're putting up these "McMansions" of 6,000+ ft on tiny postage stamp lots. Huge homes, smack up next to the neighbors.

Olaf, they are building more and more of those home even in Prince William County now... Just ridiculous.

Of course, we have terrible traffic. I don't think it's possible to build enough roads for all the cars around.

Well, thats an inherent problem of living in or near a large population center... luckily enough for us, we make the DC commute early enough not to have to sit in traffic.

For those interested in the way property taxes work in the county that Olaf and I live in, see this: Prince William County Website