« Back to all posts

Why my new agency will NOT be charging tenants any letting fees

YOPA NS

Election, referendum, election; Stamp Duty reform, tax reform and the rise of the online agent – one could be forgiven for believing that the golden age of agency has been and gone.

I’ve been in the industry ten years, so perhaps it passed before I even started, but I also firmly believe that we are entering a new era that the high street agent is primed to embrace.

I believe it so firmly, in fact, that I’ve actually opened my own agency in Shoreditch, east London.

This is because, firstly, there just plainly aren’t enough estate agents in east London and, secondly, the argument for a premium service is stronger than ever.

Online agents are disrupting the market on the sole premise that selling your home is unnecessarily expensive.

Once a high street agent slashes their fee in order to secure the instruction, they are only reinforcing that principle. I have been informed on numerous occasions by online valuers that their bosses are so well backed that they are willing to lose money until they are the leading brand – good luck with that race to the bottom.

And agency isn’t the only industry being turned upside down by these young upstart-startups.

Webuyanycar removes all the hassle from a process that strikes such fear into the heart of novice car sellers that they even tell you in their adverts you’ll get less money by selling through them, but won’t it be painless?

It’s a similar vein of apathy that an online agent will tap into. Dealing with a high street agent is tiresome because a) we’re dinosaurs b) we’re overly expensive and c) who can be bothered?

We have been fighting these accusations as best we can, but there is one aspect of agency that is currently making news where traditional agents have done themselves no favours; in fact, they have played directly into the hands of these online disruptors: lettings fees.

As a new agency, we will not be charging lettings fees.

Had there not been legislation banning lettings fees, we would still not be charging them.

They are fantastic earners, of that there is no doubt, but they are, to me, reprehensible.

Already I can sense the itchy fingers ready to type their outraged responses. EYE seems to have an article a day predicting the zombie apocalypse that will occur as a result of banning fees: tenants and landlords will walk dead-eyed amongst the ruins and only the agents hold the life-giving serum required to save them.

At an average of £400 per tenant, you cannot change my mind. Even those only charging £150 per tenant. What do you pay at the moment for a reference check? £12? £15? Perhaps you have a ‘premium’ service that costs £20. Oh, but the contract!

Are each of yours hand painted on goat parchment? Does it have to be touched up and lacquered each renewal, hence the further £100 to the tenant? Or is it just a Word document that your property manager changes the date on once a year?

“We’ll have to pass the cost on to the landlord, though.” Well, if it’s so expensive for tenants, maybe you should have been anyway.

If you do, will you break it down for them? I’ve been through the calculations for what it’s going to cost us per tenancy and I’m willing to take the hit.

Tenants pay these outrageous costs because they have no choice – there’s a word for that, but I worry it may make a number of you uncomfortable.

No, I am fundamentally opposed to agency fees and you should be too.

These are such easily scored political points that my bar for surprise has to continually be adjusted as yet another agent performs his King Canute impression.

Acting in favour of a lettings fees ban is as easy for a politician as it would be fighting big tobacco.

In fact, the only opposition I can see is from agents themselves. Hint: when the world seems against you, it might just transpire that all those trees you’ve been shouting at could actually be an entire wood – you just haven’t seen it yet.

I’m not Jerry Maguire, I’m not arguing that you should be making less money. I know you work very hard for it and, especially now, every penny is important.

But perhaps now is the time that agents need to be thinking about their reputation as much as their profit margins.

Instead of fighting the ban, get ahead of it. Disrupt the market.

* Alex Proudfoot is co-founder of a new agency, Sans Pere

ON THE MARKETMY DEPOSITSHamilton Fraser NSHUNTERS NS - to June 2017LANDMARK NSjobs board nsEXPERT AGENT NSKAPTUR NSTM trainingNFOPP SkyscraperArena Push news story pages

[ comments ]

Source:: Why my new agency will NOT be charging tenants any letting fees