TheLetters


Steve Clemo Partner, Red Homes Ltd. www.redhomes.co.uk


For all the latest news visit us at www.the-negotiator.co.uk


Dear Editor


Re: Richard Rawlings letter in your March edition.


As he mentioned the word ‘democracy’, in the interest of a balanced debate I am responding.


Variable Fees. Why does Mr Rawlings use other country’s agency fees to justify unfair variable expensive fees in the UK? What do other countries fees have to do with the UK? He appears to hold UK homeowners in


contempt by being patronising and condescending, insinuating that they should accept the current fee structure of most agents without question. Does he take them for gullible fools? In France or Spain, equivalent property is


considerably cheaper than the UK so agents have to charge more to make a living. In 2008 I paid €100,000 for a traditional


stone French farmhouse with six acres of land. I was charged five per cent of the value – €5,000. Very reasonable, considering that selling a modest 3-bed ex-corporation house for £200,000 with an office based variable fee agent in Bracknell will cost £5,000 in fees! Is Mr Rawlings seriously suggesting that


agents can justify their fees because they can persuade buyers to buy a property they don’t like / cannot afford /know to be overpriced? How does an office based variable fee agent justify charging three vendors with the same style property on the same estate or street, in the same condition, three different fees from 1.8 per cent to 2.5 per cent? Is the 1.8 per cent a ‘budget’ service and 2.5 per cent a ‘superior’ service? Are clients getting the same service as each other or not? Is the agenda of variable fee office based agents to squeeze as much as possible from every homeowner? If not, then why the variation?


Low fee agents He insults homeowners who choose a low fee agent by saying they have no understanding of how they operate. He tags these agents with the same label without acknowledging that many offer a very high level of personal service that many office based, expensive agents do not. He states that low fee agents’ under-deliver in all respects. The same could be said of hundreds of office based agents.


18 l April 2012 l TheNegotiator


Those agents contributed to a longstanding negative reputation that the industry suffers by unethical and lazy behaviour regardless of size. How does he explain the continuing success of companies like mine and others who have sold thousands of properties all over the UK charging a very competitive low fee, giving a very high level of personal service which includes all the normal activities that you should expect from ‘traditional’ office based agents without the unnecessary overheads? We pass those savings onto the vendors. Regarding Red Homes, how does he


“Shouldn’t we be working in the vendor’s interest, those who sustain our business?”


explain why a considerable percentage of our instructions are by referral? Why are almost 100% of our sales completed to everyone’s satisfaction? How does he explain why our business has been profitable for the past six years and how we continue to grow our brand? We must be doing something right.


Car prices as a comparison This is just glib nonsense but it’s interesting that he uses the term ‘ripped off’: 3 vendors with the same agent with the same property on the same street charged 3 different fees all getting the same service? ‘Ripped off’ or not?


Rising fees reflect improving standards


Does he mean that an office refit is a justifiable reason to increase fees and is an actual benefit to the vendors? Someone has to pay for the agent’s overheads. Most people accept that in reality rising fees are due to the increase of fuel, vat, rent, business rates etc. not ‘rising standards’.


If everyone focused on price, the 0.5% agents would get all the instructions. They don’t.


Low fee agents don’t get all the instructions because office based variable fee agents continue to treat the home owning public as gullible fools and will tell them anything during the market appraisal, justifiable or not, because they are desperate to gain the instruction, eg: l overvaluing to gain the instruction. l claim that having more offices or being established for longer makes a difference to selling properties. l slander the low fee agent telling lies which include stating that the low fee agent can’t sell property. l claim that they sell more than other agents – some do but that’s because larger firms have more instructions. As the industry is dominated by office based variable fee agents, it’s obviously not in their interest to inform homeowners what is fact, for example, where and how buyers initially select properties to view – the vast majority on a property portal in their own home rather than in their expensive offices. Complicit in this cover-up are self-serving


trade magazines that rarely feature what low fee agents have to offer with the content consistently promoting the office based variable fee agent and how they can increase their fees at a cost to the vendor but for no extra benefit. The industry, including Mr. Rawlings


doesn’t want to admit that agent’s fees are based on overheads not on service. If they didn’t have huge overheads they would not have to charge high fees. Isn’t it about time the industry considered


the homeowner and provide the information that will save their valuable equity instead of misleading them so they waste it on agent’s overheads? Isn’t the industry supposed to work in their vendor’s interest, the people who sustain us in business? Mr Rawlings’ comments are typical of


someone who has made a considerable amount of money by charging clients unfair variable fees without any justification and who promotes his current business of encouraging agents to charge even higher fees. I suggest that the growth and success of


many virtual or homebased agents has scared him into making those comments.


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