Estate agents' referral fees
I'm not sure if the house buying and selling public is really aware that estate and letting agents can earn substantial income from referral fees from mortgage lenders, brokers, solicitors, conveyancers, utility swap companies and so on.
People may wonder why some agents' commission fees are so low compared to others, especially true with 'online agents'.
The deal is that the clients and properties are something like 'bait' around which referral fees coalesce. The more clients and properties, the easier it is to make money, even if the properties are not sold as the agent gets contact details of buyers and tenants, plus of course sellers and landlords; these can be referred for financial gain of some kind.
So, how important is it for estate agents to actually sell a property if, once it is sold, it is no longer 'bait'? Interesting thought.
The industry press believes this model is more relevant with corporate agents rather than small companies as these large entities have more clout to ask for higher referral fees from ancillary businesses so are more anxious that referral fees are not banned.
This article was in Property Industry Eye a few days ago, worth reading:PropertyEye Article on Referral Fees.
Paul Bonett F.N.A.E.A. M.A.R.L.A.