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WHY COMMISSION BASED FEES ARE A THING OF THE PAST W


e have all seen the impact that online estate agency has had on the


residential market, where this disruptive model has drawn both praise and criticism. The most vocal praise being from happy customers


Andrew Vertes


whilst the most vocal criticism is from estate agents whose livelihoods are under threat, as they are unable or unwilling to adjust to this new model and modernise their service. Online


estate agency or the ‘fixed-fee model’ is in its infancy, it’s not perfect and any new and disruptive model will face a battle against well-established incumbents who will proclaim the need for modernisation in all areas of the working world, except of course, within their own industry. Despite still being in its infancy, the


fixed fee model is here to stay and I am proud to present the first viable fixed-fee


solution for the commercial property market. At Virtual Commercial we have reviewed many of the problems the pioneers of the online model faced on the residential side and have adapted our approach to not only address these issues, but to also provide a bespoke solution for owners of every commercial property use class and title. As an example our Marketing Pack, designed for those who want outstanding marketing with professional guidance and support, is charged on a quarterly basis and can be cancelled at a days notice. We have successfully found tenants or purchasers and completed on deals well within this 3-month term, saving our clients small fortunes. Our Professional Pack has no time limit as we saw that many online residential customers were put off by the 12-month fixed term. Clients can rest assured we will sell their property without the risk of renewals or additional fees. In addition this pack also includes a marketing board, negotiation, heads of terms and deal progression. It is important to mention we are always on hand to provide experienced advice as needed throughout the


by Andrew Vertes, CEO, Virtual Commercial transaction.


Whilst some people will likely think the model is too good to be true, we can operate this way as we optimise the professional’s involvement to only the times they are needed. Our positive reviews and ever increasing repeat clients, tells us our approach is working.


High street lease terms have moved away from 10 and 20 years to a more common 5 years with a third year break but rent values have risen significantly. Therefore if a lease length of just 3 years is agreed and a rent free period provided as part of the terms, does the estate agent deserve a commonly quoted 10% of one year’s total rent, subject to a minimum fee but often no maximum? This is a significant percentage and there is no guarantee that the tenant will not experience operational or financial troubles.


With commercial yields presently


ranging c.5-12% dependent on the location, is it fair to charge 8-10% of an annual rental value? We think not, but these questions are for you to answer. Until recently there was no alternative but there is now. We are proud to offer a choice.


COMMERCIAL PROPERTY MONTHLY 2018


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