A High Street estate agent has cautioned others within the industry against being tempted to go down the route of charging vendors a fixed fee.
The Director of SaleBoards Estate Agents in Exeter, has cautioned other agents not to be tempted charging vendors a fixed fee. Johnathon Newell of SaleBoards told how his company started offering fixed fees when his firm began, but said how this led him to lose money.
In an interview with Estate Agent today he said “We set up an office in 2007 just as the downturn kicked in. None of us had estate agency experience but we generally thought it was a good marketing tactic to have a fixed fee of £1,599 to differentiate us from established local agencies”.
Newall continues “At first it worked. We soon became the third largest agency in Exeter in terms of the size of our portfolio, behind only [local leading agencies] Wilkinson Grant and Fulfords, and the public appreciated we were trying something new”.
He indicated that the problems started when the flat fee seemed to discourage sellers of small and relatively low cost properties, whilst it attracted a disproportionate number of unexperienced sellers of large houses.
Newall says “We found ourselves with cheapskate and sometimes greedy sellers of big houses who would have made a very big saving, but were highly reluctant to reduce their asking prices even though this was a difficult market in a downturn”.