Estate Agents Application Fee - Scaring Away Good Tenants
31 Mar 2015
Estate agents in general are getting a lot of criticism over their fee’s lately, not the fee to landlords, but the fee that we charge prospective tenants, the application fee.
When an agencies application fee that they are charging the tenant becomes more than the amount they are charging the owner, does it mean that they client changes ? Do they start working on behalf of the tenant or themselves rather than the owner ?
Estate agents do have to advertise their application fee that they charge to tenants, and state what this is for, whether it is per tenant or per property.
Suttons City Living charge each applicant a fee of £150.00, this is to cover the administration of the moving in process – paperwork, referencing and checking into the property. There is an extra charge of £50.00 if someone needs to have a guarantor, this is the cover the extra administration this causes.
Our tenants do not have to pay anything more than this before moving into a property, we do not charge any fees for cleaning and the end of a tenancy if the property is left in the condition that the tenants were given it in.
We do not charge a checking out of the property fee, and we do not charge for a reference at the end of their tenancy. We feel that the £150.00 covers all these aspects.
But we do understand the criticism that is being levelled at all of us, some estate agents are really taking advantage of a shortage of property to rent in Manchester City Centre.
The agencies we have been told about tend to quote a low application fee but then have many add on fees such as ‘check-in fee’ ‘check-out fee’ ‘referencing fee’ – the list goes on.
One agency actually charges the tenant extra if they want to move into the property in a short timescale, so it’s actually extra money if they want to move in quicker. This is ridiculous, if you have a property empty and a tenant wants to move in quickly, then estate agents should work for the landlord and get them in as quickly as possible, not try and put them off moving quickly with an extra fee.
Recently one gentleman I was showing around a property said that when he had added up one agencies fee before moving in it came to approx. £600.00, and that was for one person. So he did not rent through that agency. Another agency he viewed with had an application fee of £395.00, again he chose not to rent through them.
He was a wealthy individual looking for a place to use for only 4 nights per week when he was working in Manchester, he was looking at properties around £900.00 per month. The ideal tenant.
Due to those agencies application fee, the landlord missed out on a good tenant, possibly leaving their property empty for longer.
So I agree that regulation is needed to stop some agencies charging excessive fee’s but I do not think that an outright ban on fee’s would be correct. It costs money to process applicants forms, and the money would have to come from somewhere.
The benefit for Suttons City Living is that we are now getting more choice of quality tenants for our apartments because prospective tenants such as the gentleman above are choosing to rent through ourselves due to our reasonable application fee.
So in conclusion, I would recommend tenants choose which agency they are going to rent through carefully, asking for a total amount of fee’s that they would be charged before moving in.
I would also urge landlords / owners to check the fee’s that an agency may be charging to prospective tenants and decide if it is an amount that may turn good quality tenants away from renting their property.
If anyone does want more information regarding our service to landlords and owners please don’t hesitate to call our office on 0161 8329922 and speak with a member of the team.