26
Jul
Estate agents' fees. Comparisons around the globe - Graham Norwood
UK estate agents charge lesser fees and offer a high-standard
service when compared to other countries across the globe. By
Graham Norwood.
We have all heard the stories: estate agents charge too much, do
too little and when the market is good the homes sell themselves
without any effort. These myths may be hard to shift but
international analysis shows precisely what good value UK agents
really do offer.
Commission in the UK varies from place to place but in central
London now – where the market remains unusually strong
– the charge can be 1.75% to 3% of the eventual sale price of
the property. Across the rest of the UK the rate is lower, ranging
from 1% to 2%.
But the story across the world, using figures drawn up from
different national estate agency authorities and government
statistics organisation, shows typically higher fees.
Australia 4% or higher
Denmark 5% or higher
France 6% or higher
Ireland 3% or higher
Netherlands 5% or higher
Spain 6% or higher
Sweden 4% or higher
Switzerland 4.5% to 10%
United States 6% to 10%
Comparisons of this kind are notoriously difficult because the
kind of service offered by estate agents (quite aside from the
quality) varies significantly across national boundaries.
In the United States, for example, the popular image of
‘realtors’ is very different to that in Europe: in the
US, the profession is highly respected because to become an agent
involves significant property, business and legal training.
The services offered in the US include ‘multi-listing’
– buyers register with only one agent in a location, but then
have access to a multi-agent database of homes on sale, which gives
them knowledge of almost the whole marketplace. US realtors have
also been the first to adopt much of the new technology now taken
for granted in the UK and elsewhere.
In Sweden, estate agents are tightly regulated by law: to secure
insurance, they have to be members of standard-setting trade
bodies. In Canada, agents are not allowed to practice without 200
hours of specialist training. To open a branch in Australia, agents
must undertake 30 days of courses and pass 16 individual training
modules.
Britain is less-tightly regulated, but in central London this does
not mean the agents are of any lesser standard than found anywhere
else. Most are members of the Royal Institution of Chartered
Surveyors – whose practices are seen as amongst the
world’s best – and membership of the Property Ombudsman
Scheme is compulsory for each agency.
However, the critical difference in London is the fierce
competition between agents (the website Primelocation lists more
than 1,700 rival agents’ offices across the whole capital),
which means service standards are driven up and fees to sellers are
kept modest when compared with many other countries.
So next time a dinner-party conversation turns to estate
agents’ charges, inject a little reality into the debate:
this time, the grass is not so green elsewhere.