Estate Agent selling fees are undeniably some of the most questioned, argued and resented service charges of any industry. These fees are also amongst the most frequently and heavily discounted. That this is the status quo is an indictment on the real estate industry and the “professionals” operating within it.

There are myriad reasons why this climate exists – low industry entry barriers and disturbingly poor educational standards key factors on that list. However, chief among them is the industry’s almost endemic inability to communicate to sellers the real and absolute value of these fees. 

Without question there are outstanding practitioners able to justify and demonstrate why their fees are worth every cent. I can think of a dozen agents who are rarely, if ever, questioned about their fees simply by virtue of reputations built on consistently delivering amazing results. Though for every exceptional agent operating in any given marketplace there is an inexperienced, inept or just outright idiotic agent unable to rationalise selling fees and all too willing to massively discount them in pursuit of the “business”.

These agents have a detrimental effect on both the industry and the market. Obviously the prevalence of “discounting” makes the task of validating value to potential sellers significantly more difficult for the good operators out there – which is in effect a type of cannibalisation. When an owner is presented with the choice of two fees structures, both promising the same outcome, however one proposal is vastly cheaper it’s incredibly difficult to ignore the discounted rate. Regardless, the onus is on the agent to demonstrate to the seller why they’re the better option. Demonstrate that despite higher fees the return on investment will be greater when utilising them.

What is more profoundly concerning though is the correlation between those that discount fees, and who also inflate “potential” sale price quotations to their sellers. By that I mean agents that suggest to an owner an almost certainly unachievable selling price - again with the hope of securing an exclusive opportunity to sell the property. If the unwary owner is seduced by this attractive proposition and signs an authority, what ensues over the coming weeks (if not months) is a war of attrition between agent and owner, the agent battling the owner to “align” their price expectations with the real market conditions. Regardless of whether or not the property eventually sells the experience for the seller is abysmal, and only serves to exacerbate the general public’s distrust of the industry.

As supply tightens throughout 2016 agents must expect to be challenged on their fees as competition for selling opportunities increases and discounters sink to new lows. Those who can genuinely demonstrate their worth to sellers should expect to prosper.