Letting agents should be forced to display their actual costs charged to landlords and tenants in the interests of transparency, in the same way that lenders must reveal their Actual Percentage Rates (APRs).
Under the idea, agents would have to display their actual costs in relation to an illustrated example – perhaps a two-bed flat.
Eric Walker of Bushells, which is due to open a further branch shortly, has come up with the idea after looking at competitors’ rates.
He said: “As we head towards the opening of our office in Docklands, I have been looking at agents’ terms of business and I am frankly appalled.
“I think agents should display some sort of APR based upon a 12-month let with a one-year extension.
“Assuming they all charge roughly the same for let only, rent collection, management, etc, you would think it a reasonably level playing field for landlords to gauge costs. It is not.”
He said his own firm’s only additional costs are renewal fees, and only where the extension is arranged by Bushells. The fee Bushells charge is £260 plus VAT with the admin fee split between landlord and tenant.
Tenants are charged a £30 reference fee. They also pay for the costs of processing a credit card, but nothing for debit card transactions.
Bushells has found that one firm, as a comparison, charges:
• Extension fees at same rate as for initial term
• £500 plus VAT admin fee split between landlord and tenant
• £250 admin fee to tenant for extension
• 10% ‘supervision’ fee to landlord for all works over £500
• 1.5% if the property is sold (whether agent is involved or not)
• £50 plus VAT references admin fee
• 3% credit card fee, 1% debit card fee.
Real-life example from Bushells’ books for a 12-month let-only to a couple – extended for one year – move in paid by debit card. Rent £300pw and assuming no works done (excludes VAT):
Bushells:
Commission: £1,560
Admin fees: £260
References: £60
Landlord extension: £780
Tenant’s fee: £0
Debit Card Fee: £0
Total: £2,660.00
A.N. Other agency
Commission: £1,560
Admin fees: £500
References: £100
Extension: £1560
Tenant’s fee: £250
Debit card fee: £30
Total: £4,000.00
Add in, says Walker, a £2,000 boiler: A.N. Other agency gets another £200 from the landlord plus a commission from the contractor.
So, on the basis outlined above, one agent actually charges nearly 13% of the rent while another would earn 8.5%.
In other words, while both agents claim to charge the same, one in real terms is charging about 50% more than the other.
Is this shocking? What do you think?
And surely this could be dealt with by agents having to give an actual ‘APR’ type example online.
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Comments
Have you seen this thread yet?
http://www.estateagenttoday.co.uk/news_features/Agent-up-in-arms-over-Allagents-rating
Allagents are bring out an agents fees comparison site
Clarity in agents charges would be a step in the right direction but its meaningless without some sort of measures in place to deal with agents who ignore it and probably unworkable in the current market. Different agents call the same basic charge by different names; whose to work out what each agent means? who is to check it?
Agent shsould be free to charge whatever they like within the law; if they can justify it and landlords or tenants are happy with the service they get in return then there isn't a problem.
We all get landlords on the phone whose only interest is in finding the cheapest agent; the cheaper agents would fight to have the lowest apr for fear of losing business; and in doing so will probably kill them off anyway - which equals more bad press for the industry and more calls to lower prices.
We need to clear out the rogue agents first; while they are allowed to operate the industry will never get the respect it deserves. Enforced regulation is the only way to do that and someone with the teeth to enforce it like RICS or TSO.
Once they are gone we could work towards a common way of advertising our charges to make it easier for landlords to see, and make, an informed decision if cost is their only factor. Regulated agents could then be subjected to a benchmarking system that rates their level of service.
Cost is a factor because as sure as eggs are eggs, this would need to be self financed.
@ richard
So, should agents not contribute ideas to EAT & LAT? Perhaps if they do, they should be anonymous else be accused of 'advertising' - mmmmm
I dont see anyone wishing to control prices - just to make sure landlords are clear on what those charges actually are before its too late. Its an important illustration - highlighting not just the cost in year one, but the effect of an extension. Service is another issue which is reflect in price - you could only have uniform pricing if there was uniform service and besides, if cost were the only factor, only cheap agents would get business.
Cant see how you can fin fault really, unless you are one of those who hide costs.
What an excellent way for Mr Bushell to get some free PR for his business. Sadly this seems to the the way LAT is going.
There seem to be 2 schools of thought - those who want to CONTROL what a lettings agent can charge, and those who simply want it to be CLEAR. I'm firmly of the view that a lettings agent should be free to charge what it likes, as long as it's pricing structure is clear. The consumer can then make an informed decision on whether the price is worth paying.
WE have always had our basic fee structure published.
When accepting management instructions we always meet the landlord & discuss their needs & requirements [ eg..part management, overseas management etc...] and negotiate our fees for services, all services.
If a landlord wishes to go in 'blind' IE:- not sit down and discuss our service, what fees are for, what we can and cannot do, legal aspects...then we consider them a bad risk and will not take the business, as sooner or later they will generate issues, and as managing agents we will end up in court, and our name will be tarnished.
Why would any landlord [who after all is supposed to be a businessman] sign a management contract without letting their legal bod scan it first.
Remember, smoke & mirrors will only fool people for a short time, they will always return to the honest up front guy, who they realise saves them money, and provides a real service in the long term.
I could print testament after testament from our landlords who have strayed, only to get shafted, then return to the office, bottle of cognac in hand, sheepish expression and a mouth full of apologies.
The fees I charge are between me and the client and I make them perfectly clear.
Tenants are advised of my fees for credit searches and they use us or go elsewhere.
As far as anyone else is concerned they can get lost it's nothing to do with them. What I earn is my business and nobody else's.
I have always disagreed with other's having to publish what their commission is. Many financial advisers get paid a fixed fee so it's not such a big deal. I have a flexible approach to fees and as such don't want my landlords to know what I charge others in particular where I have a long standing client with lots of business being sent my way there is no way I will charge the same fee to a one off landlord. All my information shows plus the old vodka and tonic.
@Mikey - we just did the comp against an agent who we were up against and who undercut us - we worked out at 9% over 2 years- they came in at nearly 14% and the gulf was even wider after year 3 - especially when you added in costs of extension to tenants
Spoke to LL - they were gob-smacked and grateful, and instructed us. I like it. Cheers
I have to say that its a very good exercise to undertake as doing so really makes you think from the clients perspective.
I can see why some agents get the others a bad name - all charges should be clearer as once they become apparent, the tenant is often sitting in the office waiting for keys!!
Agreed its been a very good debate and most of the posts (even the ones I've disagreed with) have largely been fair and considered remarks.
Now, about fee levels in London - good luck to you guys, I appreciate that like everyone else you're in a competitive market and if those fee levels are what the market stands then fair play. Naturally I also understand that your overheads are far higher than mine.
Its just an observation that (even at our much lower average rent levels) if I could take a sum of money equivalent to 8.5% of two years rent for a Tenant Find I'd be dancing in the streets (once I'd composed myself from weeping tears of joy).
@IO - I am not able to offer any express authority. The situation was regarding a fee dispute a number of years ago where a neg wrote to the vendor and said, "On this occasion, as a gesture of goodwill we will reduce our fee to 1.75%"
We were told that as this figure did not say 'plus VAT' it was reasonable to assume our charge was inclusive and that we could not seek additional funds.
Further, action in Court to reclaim fees does not include the VAT element
Best wishes
EW
@EW
Morning Eric thanks for your kind words but lots of good and interesting posts on what I agree with others is one of the best articles for ages.
Can you do me a favour - this VAT business and the customer not having to pay it unless it is displayed correctly. I thought it was still "Law" but what is the authority you can quote Comet if you don't want to pay ther £200 VAT on top of your £1000 plasma TV cost?
Is this just another OFT pronouncement that a lower Court would take note of for example? (Like asking a tenant to give notice to leave at the end of the fixed term!!!)
Regards
IO
P.S.
SAFEagent when is the marketing roll out to the public planned or have I missed it?!!
I've not read all the posts so forgive me if the following has been covered.
1. No agent if they are truly doing a proper job (and 90% of you think you do but I would probably be able to prove otherwise) can charge under 10% and think they are even close. 15% is charged by the most successful agent in my area and it is more than the competition because they are good at what they do, and are regulated too! Landlords will pay for an excellent service. Be totally up front with the landlord and you will cement a long business relationship.
2. The monthly management fee should be calculated as to what you expect your office to earn each hour to make an overall profit. Divide this by the number of properties you manage and ask yourself are you working for next to nothing?
3. If fees are set too low just to attract business then you will be a poor agent believe me.
4. Many Letting agents are living in a imaginary vacuum that gives them a false satisfactory sense of security.
5. Non-regulated agents should be prevented from trading, if only the Government would just listen. It won't prevent problems but it would eliminate plenty of crappy agents.
6. At the end of the day it's not what you charge landlords but what you do for your fee.
7. Agents are frightened to breakdown fees/charges so that a sensible amount is charged for each process, and landlords pay more only for what should be outside of your normal management structure, such as getting out of bed at 2 a.m. to deal with a problem.
8. Applicants should be given a full written breakdown of all charges they are likely to incur before, during and after a tenancy, and as soon as they show positive interest in a property, and before they part with ANY money. This is an OFT guideline.
9. I promise to get out more!
Two agents quote 10% - real costs ARE shocking. WE will be number crunching and hoping we are good value !!
Assuming we are (and we are good guys) we will be using this idea as we offer great service and only lose out when undercut.
Thanks LAT for this
@Ray Evans
Forgot to mention - you are spot on. IF anyone quotes a fee and does not expressly state PLUS VAT then you are not compelled to pay and they cant make any claim for it - I know this for reasons which nearly caused the death of a neg at my hands - Excellent point well made.
@steve - APR referred to ave percentage - not pounds as you appreciate. The fee example was on a 2 year let and the average percentage including other charges was just 8.5% - not too greedy
EW
Dear All
I have just read the comments and agree with most points, some of which have made me revisit some of my opinions. Perhaps my 'APR' thing was a tad off the wall - but my point was really about comparing eggs with eggs and making sure landlords and tenants know what they are letting them selves in for.
My friend Industry observer made excellent points as I would expect as did Steve - though perhaps we are looking at it little differently though in broad agreement.
A good fee deal is one thing, but when the agents income is topped up at the landlords expense, it unfair on the landlord and on the agent who was totally transparent and who lost out on a falsehood. An agent who is not honest about their charges is unlikely to be honest about the service they claim to provide.
Service is a key issue and a fee will often reflect that, but all agents promise it and frankly its only after the tenancy commences that it can be judged. Fee comparisons are inevitably made when an agent is chosen. I dont ask all fees are homogeneous, its a free market. What I hope for is that agents wear their fees on the their sleeve - demonstrate true costs then justify them howsoever they wish.
I have seen comments on review sites which say "Agent charged us for everything" and "Every interaction resulted in another charge"
Sometimes we are too close to the business and simply need to look at things from the customers point of view.
Finally, I will add that the vast majority of agents terms I have seen are excellent and very fair and written in simple terms. The lessons of OFT v Foxtons have been embraced by most - but still there are a few who profit from flouting the law. Its a great endorsement of the industry that so many of us agree on improving the industry
PS - Did I mention our new Docklands office is opening next month..... ;)
Best wishes
EW
Just pipped to the post - agree with last post
I will add that I slightly differ with Steve from Leicester.
I agree service is key - not fees. BUT when a crap agent says they will charge 7% instead of our 10% and we raised the ARLA, training, CMP, service, review ratings etc, you get the feeling that landlords sometimes think - you would say that!
BUT when you can say - 7% - really? Have you looked at the OTHER charges in their small print - we are transparent AND offer great service - its game set and match. If an agent isnt open with the charges - what else isn't quite as claimed?
Good idea to compare everything - properly and fully and show a landlord the real cost in £ notes - thats what counts. Now - how to get the other agents Terms of Business.....
Well, IMHO - I reckon this has been one of the best articles for some time.
I am not sure about the solution EW has suggested, but it really have generated some interesting issues
We focus much on service and justify this as why we charge more than the dodgy competitors - but now, we will be looking at their REAL charges and offer a similar comparison to the one above - it really is revealing and I for one am grateful for the re-focus
Steve - its 8.5% of the total rent over 2 years. Not that bad
I've just read in detail the actual example quoted and twigged that its for a "let only" (presumably broadly equivalent to what we call a "Tenant Find" - i.e advertising & marketing, accompanied viewings, taking references, preparing an inventory & schedule of condition, signing the tenant up, handing the keys over, accounting to the landlord).
London agents live in another world if an agent can charge total fees of £2,600 plus VAT, let alone £4,000 for a tenant find.
As established in earlier postings and APR style comparison puts me mid-table in terms of total fees charged compared to my local competitors, and I wouldn't get anywhere near a grand for a typical tenant Find. Granted my overheads (and local rent levels) are much lower than London prices but even so . . . .
@Ray Evans
Ray excellent point and I'd like to know if someone out there (EW perhaps?) can explain this to me. I agree 110% with you mainly because when this requirement came in from I think the OFT I was saddled with the task of changing all references to fees with VAT in both Tenant T&Cs and our Landlord contract (not to mention individual offices in their tariff of fees).
It used to say something like (using VAT at 20% for eassy figures) - Landlord fee £120 incl VAT.
The OFT in theior wisdom felt that idiot consumers needed leading by the hand and a better explanation. SDo you could no longer include the VAT but had to show it separately one of two ways, either:-
Landlord fee £100 + VAT @20% = £120
OR
Landlord fee £120 incl VAT at 20%
but either way you had to show the VAT rate being applied.
This has fallen by the wayside over the past 5 years or so but far as I am aware this requirement to display in the more detailed manner was never withdrawn. Personally I think it is overkill as if the fee includes VAT everyone knows at what rate but if it should still be shown in the more detailed manner why have we all stopped doing so?
@Dave
This is my last ever response to you no matter how ludicrous your postings.
I have no vested interest in anything. I was involved with a specialist lettings only agent (NOT sales) and am now self employed.
I have no intention of trying to control any discussion - but what I'd klike to see is sensdible discussion we might all benefit from - especially uyou I might suggest .
Your point and interest is nothing to do with this thread - which shall I remind you is what agents charge for lettings, not whether the UK property market is about to implode as you seem to desire.
By the way not all bubbles burst with a bang - those with less air sometimes just make a quiet pop and gently deflate. Given the number of kiddies parties you must attend surely you have seen this happen.
End of responsses to you no matter how daft your comments are.
Good wide ranging discussion today - not to mention the free advertising aspect of Eric Walkers post ;>).
There are too many things to pass comment on in a short time.
However, just one thing, someone did mention some do not show "plus VAT" on TOB's, quotes etc.?
In my view if one does not state it on quotes/estimates/terms of business fees that they are "plus VAT at 20% " (currently) they cannot legally charge it. I have never paid a contractor or anyone VAT who omits to state "plus VAT”.
It is common business sense to make everything very clear at the beginning, on procedures as well as costs and get them acknowledged and agreed in writing
Steve - If artificial rate are exposed and real costs evident, surely the service from the good agents looks better value.
People go for low fees over service if that important to them - but when the fees dont seem so low then service becomes the focus - not the price.
It works in Sales and always has otherwise the cheapest agents would be the most successful - they are not
Just to elaborate on my earlier point.
An APR style approach helps overcome the rogue agents who offer an artificially low headline rate then bump it up with hidden fees, so in that respect its a good idea. The trouble is, it shifts the focus onto price rather than value for money (which is something different) and that's why I don't like it.
I don't want to demonstrate to landlords that, when all fees are taken into consideration I'm the cheapest (because I'm not). What I DO want is to be able to open a dialogue with a landlord, talk about the service I offer, and convince him I'll do a better job than my competitor.
Coming midway in an APR style table (which is where I'd be) wouldn't do me any favours at all.
Actually - if an agent is getting 10% for 'supervising' they should not be taking a cut from the contractor.
One firm near us insists on 10% CASH - so a £100 job gets charged to Landlord at £110 and then agent charges 10% (which includes 10% on his back hander) so Landlord get a bill of £121 on a £100 job.
Whats worse, they think we are stupid for NOT doing it.
As with all good ideas, the rogues wont agree and will not comply - I know of 2 agents who still have "If the tenant buys the property whether introduced by us or not you will pay us a fee..."
We reported it to OFT - nothing. There needs to be some real policing and some real publicity and consumer awareness.
Dont know what the answer is - but its important that agents fees are highlighted to landlords and tenants ask the question at an early stage. Ongoing liabilities MUST form part of the core terms and be flagged at the top of any agreement.
The APR parallel is interesting but you would need perhaps a one, two and 3 year example.
Mmmmm - Good ad for Bushells Docklands! Hope it goes well mate
Whichever agent was used for the example should be named and shamed. Rip off or what?
Not sure APR is the answer - but defo transparency from the outset and before instruction
As a landlord - I get good service and sometimes not so good from the same company - but I know what the cost is.
I used an agent in London recently and was effectively mugged - OK, my fault for not dissected the terms of business - but they seemed professional.
Service was poor and the bills and charges kept coming.
My fault - but some charges not obvious. Unsurprisingly they werent members of any professional organisation. In my experience - use a professional firm, dont cut corners and you cant go far wrong
Sound idea.
I would suggest that % fee includes admin fees and bolt ons.
Simply - Landlords gets quoted say, Let Only fee - renewal fee. No other charges - ever.
Tenant is told when they register: Admin Fee - ref fee - renewal fee. No other charges - ever.
No agent should ever take a fee from a contractor - as for supervision fee - its a bit of a con frankly
Anything which makes charges & fees more transparent is a good idea.
Its irrelevant what should be done - unless landlords and tenants know what to look for and ask the right questions, they have no means of comparison.
Rarely does a landlord see more than the headline fee until Terms and Conditions are provided and these are usually received after the 'go ahead'
@Dave - in fairness - you do talk utter b******s - and I dont mean bubbles?
@industry observor
stop trying to control discussion
uk property is in a bubble of epic proportions...the only people who cannot see it are vested interests like you wanting the bubble to continue
all bubbles burst and this one will be nasty for anyone will multiple properties
@StevefromLeicester
Hey steady on old man or I'll have to change my views!! Hell next thing you know Peebee or Rant or even Brit 1234 will be agreeing with me next!!
The point in all this fees stuff and I agree with your comments and Eric Walker and his APR suggestion is the bigger picture.
Charging anything to a tenant in Scotland for anything in connection with the preparation or renewal of a lease(agreement) is illegal and always has been. Agents abided by this for years but in recent years have started to sail close to the wind. But as and when they do make charges if challenged had better smile and refund as legally they will lose every time.
Why mention Scotland?
Because apart from the lunatic idea of wanting to cut themselves adrift from the rest of us they do occasionally do some sensible things - and get watched by Westminster in doing so.
Latest example is TDP where there will only be one provider (in my view and hope DPS) and this fee stuff is being monitored down here. CAB and above all Shelter have on more than one occasion in the past commented and they have also done so again recently and have a strong lobbying ability in Westminster.
Don't be surprised if charges to tenants starts moving up the agenda especially given consumerism and above all the OFT. How many agents could actually justify the charges they make to tenants if challenged to do so. Indeed how many agents could win an argument that the Landlord should pay egverything and the tenant nothing.
After all who is it that wants the income checked, wants a tenancy agreement in place, wants an inventory, wants inspection visits etc? Not the tenant though they benefit from some of the above.
Industry Observer
You are mistaken. Dave is not a complete idiot. He is an idiot - but not complete - there are things lacking
Steve
Quality of service? How many agents say
"Yes Madam - we can do it cheaper than Joe's Estates, we charge 6% let only because our service is crap"
Service is meeting expectations and is variable as landlords expectations differ widely
Walkers idea is a good one as a starting point
@Dave
As I have said yto you before you are a complete idiot. Your views are totally worthless because tey are so biased and suit only your own agenda which is for whatever reason a house price crash.
I have tried to explain to you before if events unfold the way you hope (as they say "be careful what you wish for") then it is extremely unlikely that any buyer will be able to borrow what they need anyway - even less so than now.
Mind if you have a 75% deposit you may be OK.
Just as an ewxample for any posters here who may not have seen your wares before here is a sample:-
"Banks will be falling over themselves to lend money on houses that have fallen in value and are continuing to fall"
Not your exact words I grant you but that is what in effect you were saying. Banks lending on an asset(!) known to still be falling in value your world or lilely to take decades to recover and give the lender adequate LTV equity.
I think that sums up the total value of your contributions to grown up discussions - which is zero.
Keep off this site Dave and especially this thread as it is of interest to those who know what they are talking about and have something interesting to contribute
Steady Steve - agreeing with IO??
You are of course about service - but nothing indicates the service level a customer will experience until its actually received.
Further, look at review sites - 10 five star reviews punctuated by claims of appalling service.
Even the very best agent will get the occasional complaint.
The idea is to ensure fees are fairly and transparently displayed. It works in sales - a straight comparison and some agents charge more and are very successful for all the reason IO cites. Thats not the issue
Its the agents who HIDE charges by marking up services.
Come on £400 - £600 admins fees! It happens and its wrong
olympics is only on for 4 weeks. ??
Er - no it isnt. TV crews, press, athletes, spectators also go to Paralympics.
Here's something I don't say very often . . . . I agree with Industry Observer (well, with most of his comments anyway).
The key problem with an APR style figure is that agents don't necessarily offer the same level of service. A bank loan for £5,000 is a bank loan for £5,000 and price is the only significant differentiator. Agents differentiate on three things - price, level of service, and quality of service. An APR style figure only reveals one of those elements and will therefore favour those agents involved in (as another poster put it) a race to the bottom.
As for agents who offer a full management service for 5%, words fail me. They'll disagree vehemently of course but I'll say publicly that they're either cutting some seriously big corners on their service or they're making a loss / working for nothing.
Bloody hell. That is so obvious as an idea - cant believe that with all the talk no one has mentioned it before.
It would not go down with the bent agents next door who charge for EVERYTHING and make a profit on every tap fixed with a 10% 'service fee' and a 10% cash backhander for the contractor
@AA
=======================================
I doubt the boys in London would agree BTW - there is NOTHING available in our offices there - and the Olympics havent even started
=========================================
olympics is only on for 4 weeks.
things are changing fast and substantial price falls are going to put the whole credibilty of btl on the burner
@Confused
Sorry if I did not make it clear I am well aware as stated of the need for transparency in terms of all fees being published up front, and stating if they include VAT etc.
But I have been counselling for years against ripping off tenants with charges which is basically what this industry does. Fine if agents want too try and extort excessive fees that is up to them the tenant has a choice - to a degree - to rent from the expensive agent or not.
Unless 'displayed' before the tenancy starts any fee for anything cannot be charged if the tenant objects and goes to the OFT followed by TPO. Because the OFT has repeatedly said so.
We make money long term out of Landlords and short term from tenants so the temptation to rip off tenants is understandable (but in my view not justified). What I would always quwery, except in the case of a re-let to completely new tenants and then only in a tenant find only scenario, is why charge the landlord anything after the initial take-on fee except ongoing commission and maybe maintenance mark-up for work involving some significant effort on the agent's part?
Anyone still charging a mandatory fee if a tenant buys property form landlord without having instructions and a signed sale agreement is......
a) a crook
b) an idiot
c) Both
@dave Yeah - the price of soft fruit is falling as well and that fact is JUST as relevant to this thread.
I doubt the boys in London would agree BTW - there is NOTHING available in our offices there - and the Olympics havent even started
@AA
drinking..nope.
I just find it amazing that anyone seems to be missing that buy to let market is on the verge of collapse
all the evidence is there
@Clapham Agent - agreed - but this is more about making sure you know what you are paying
Eric is right - lots of landlords assume and get caught out. Some think these fees are standard fees and dont realise they are being robbed.
Agree in part as would certainly make things directly comparable. I don't think there is anything wrong though with the additional 10% management fee on high value works rather than general maintenance. We take NO commission from suppliers or contractors and pass on ALL the discounts we obtain from them but charge a simple 10% fee on all works above £1000. How many agents would organise for an oversea's landlord the refitting of a bathroom and kitchen for say £15k and not feel they were working beyond the call of duty without making some PM type of additional fee - after all an architect or external Project manager would probably charge 15%?
Sellers are more educated, they compare on reputation, past performance etc. Landlords, whether accidental or not, often just look at the bottom line, PRICE. I don't want to get involved in a price war - I've been doing this far too long to sell myself short. By all means let all the 21 year olds with 3 months' experience have a crack at setting up for themselves on a shoestring and operate out the back of a car. But soon enough landlords will realise that the only way is to use a reputable agent who is ARLA/TPOS member etc.
In short, stand proud, hold your ground on fees and let the bottomdwellers pick up the rogue landlords interested in the best price. They will come back when they realise that in life you get what you pay for!
There is no doubt some agents charges are not clear. There is also no doubt that when a landlord enquires about fees, they want to know the percentage.
I think many of the bolt ons are extortionate.
One agent pays about £28 for refs, they all all done on line - he has no input - but charges £50 - £22 profit PER tenant - for what?
Not sure an APR is the answer - but some clear terms at an early stage -
@dave - have you been drinking?
We are not cheap - but our fees - all of them - are listed at the top of our terms, and on our website.
The article is correct - we often get calls 'XYZ Estates has offered 7% - can you match it" - Er - no, because they will screw you elsewhere, charge 10% renewal (!!) as initial rate is discounted - really!
APR works in many regulated sectors - top idea.
I think landlords have more important things to worry about coming up...like where have all the tenants gone?
as prices fall...buying will be a no brainer for my kids rather than being ripped off on pointless rental fees.
In fact they'll be buying the forced sale of buy to let portfolios!
ongoing fees for owning
mortgage,building insurance...security thrown in
@pp -
Fair comments, but the point being made isn't about service or even % - its about comparing the TRUE cost on typical lets for comparison - A more expensive agent can argue their case as they do in sales - the point is to stop dodgy agent undercutting yet topping up their coffers at a later date
Ah - sensible idea - that wont go down well.
Your commission is your fee. Adding a little slice to everything else is just dishonest in my book.
Refs should be charged at cost - so should card charges. Admin fees should be reasonable. I know of one agent who charges £300 to landlords AND tenant for admin - £600 to draft a standard AST!!!
Thats more than some conveyancers charge!!
BUT unless a landlord shops around and gets terms of business, he will just accept the headline %
Mr W is right - it needs to be addressed.
Before every reader boasts their lower and lower fees in a race to the bottom - isn't it strange how, in a commodity market, that people are competing on price rather than service ?
The difference between 8 and 10 or 12 or 15% management is immaterial if the job isn't done right - although accepted, this doesn't automatically mean that the cheapest is worst or the most expensive is best !
I don't know about others on here, but none of our landlords menion choosing us because we are Arla members, ombudsman members, rics members, SAFE members, etc, etc, yet all of this additional protection for the landlord comes at a cost.
Industry Observer - The issue is not that all fees should be the same, but that all fees should be displayed in the same way - transparently. They are not
I get lots of landlords complaining about 'hidden' costs - rarely are these disclosed until immediately before the viewings start!
An excellent idea by the way EW - good agents would embrace it.
A good point. We all know what we charge - landlords just ask 'whats your fee for let only?"
They dont get the small print until instruction
A proper comparison tool is a great idea
I think its an excellent idea.
The fact charges are in Ts & Cs isnt the point - they are often hidden. We charge 10% and 5% for renewals - we get undercut by head line fees if 8% - a charge which is in perpetuiuty! Add in much higher admin fees, ref fees etc and we work out much cheaper and fairer.
10% maintenance supervision fee is perfectly normal. Many years ago it was 5% but generally now is charged at 10%.
If there is work involved other than simply handing out keys, such as organising the contractors, getting quotes, supervising the work and above all signing it off (i.e. taking responsibility) I'd suggest 10% is cheap. Otherwise let the Landlord in Australia organise it himself!!
The 1.5 sale fee I do not understand at all. In the Foxton's case the OFT made it very clear that any such charge if in a contract was a breach of Unfair Contract Terms unless the letting agent had clearly also acted as a sales agent THEMESELVES and not just passed it across the office to their estate agent colleagues.
Can someone please tell me why anything more than £50 is justifiable to the tenant for a renewal fee if they come into the office to sign? I assume by the way an extension is the same as a renewal but jaron is critical as a Periodic is an automatic extension. Agents should always visit the property and sign any renewal there in my view and if so then a slightly higher charge may be justified.
But when all that is involved via the computer is amending one page of a previous agreement and the tenant visits the office to sign how is any more than £50 justified? And why to both parties?
Keep the Landlord sweet and just charge the tenant and never charge a Landlord a renewal fee, only a re-let fee is my advice - and even then think twice about it. Look at which figure is highest in any calculation - the ongoing commission fee.
All fees have to be in a tariff and available to the tenants up front (OFT) otherwise they are Unfair (OFT).
Finally why should all fees be the same - don't agents provide better levels of service - witness Ajay Jagota - it is IMPOSSIBLE to provide a quality full management service and charge no additional fees unless you have an enormous number of properties on your books and even then have sensationally efficient systems. Just impossible.
We charge 8% for full management with a discount down to 7% for portfolios & no VAT, our only other charge is £75.00 per tenant applicant to cover referencing and administration. We do not charge for inventories, renewals, inspections or check-ins/outs as we see this as part of our management service. All other services e.g. EPCs, Gas Safe, Maintenance etc... are charged at cost. Top Management Letting Agents for Northamptonshire.
At Kis Lettings we charge 5% full
Management fees no hidden extras - no matter how you present the figures a landlord would/should be able to work out the best value for money.
We charge between 8% and 10% plus VAT of the monthly rent for full management depending on the size of the property or whether the Landlords have more than one property let through us plus a mileage charge of 40p per mile for handovers, hand backs and inspections - there are no other charges for Landlords. Let Only is £350 plus VAT.
Tenants pay admin fees of £175 for referencing, £50 for renewals and £25 for references and bounced cheques. All fees are shown in our literature - isn't this how it should be?