Are my Letting agent fees too high?

by Readers Question

10:08 AM, 10th March 2016
About 3 years ago

Are my Letting agent fees too high?

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Are my Letting agent fees too high?

We have 3 properties with an agent for the last 12 years. We are generally ok with the service of the agent but now realise that the fees that we are paying for their services are too high, compared to other agents. Their site states 18% but we are paying 12%. Having phoned a few other local agents, who also advertise at 18%, we are finding fees for the same service at 8-9% and could be lower if we instruct an letting agent to look after all 3 properties.fees

We have raised the issue of fees with our current agent and his response was abrupt. He stated that if he offered us a lower price he would have to reduce the service that he offered and in some cases this would mean he would not be able to get good prices for repairs. Personally, I felt this was very unprofessional, but as we had been using this agent many years I asked him to take some time to review the fees.

To date I have not received a reply. I have 2 questions for the forum:

1. What is a reasonable level of fees for full management including collection of rent for the Reading, Berks area?
2. With tenants already in the properties how difficult is it to cut ties to either self manage or transfer to another agent?

Thank You.

Eudora



Comments

Neil Patterson

10:11 AM, 10th March 2016
About 3 years ago

Hi Eudora,

You may want to check out our partners at LettingSupermarket under our Lettings tab who offer full management at 4% !

See >> http://www.property118.com/letting-supermarket-full-management/68829/

Mark Arme

10:49 AM, 10th March 2016
About 3 years ago

Hello Eudora

Not in Berkshire as south coast based so can't help with question 1. As for question 2, you need to read your agreement with the agent.

Our agreement allows termination with 30 days notice. But we have found when other landlords seek to switch to us, they find a nasty clause saying something like "you agree that we may collect management commission for the entire period the tenant occupies the property, including where management is withdrawn".

As I said, nasty. We'd argue unfair, but landlords seem reluctant to take it on legally.

Where we have swayed landlords over, we have advised them to come to an agreement with the existing agent, usually offering them six months commission to walk away today. We then give the landlord six months free management to compensate.

The detail is always in the small print.

Good luck.
Mark

Rob Crawford

11:34 AM, 10th March 2016
About 3 years ago

Hi Eudora, firstly you should not compare management charges alone. You must get copies of the terms of business from all contending agents. This is the only way you can make a comparison. Some will offer a very comprehensive service others will not. Often what appears to be a cheap service will have many clauses that allow for additional payment to be made. The reason your agent probably seemed a bit annoyed is that he has probably put a lot of effort into delivering a good service to you that does not include these additional payment clauses. He probably gets fed up with potential clients comparing the percentage charge only. Its very difficult to define the quality of service, however, you say he has delivered a good service to date so why take the risk of a poorer service that may actually turn out more expensive?

Mark Arme

11:49 AM, 10th March 2016
About 3 years ago

Reply to the comment left by "Rob Crawford" at "10/03/2016 - 11:34":

Fully concur with this comment. Agent close to me charges £42 per instance to buy an item for the property. Yet already collect a management fee. Outrageous.

Steve From Leicester

12:14 PM, 10th March 2016
About 3 years ago

Well said Rob.

I'm an agent in Leicester. The fees I charge landlords are higher than many of my competitors and I make no apologies for it. I believe we offer a better service than many of our competitors. I also believe that though our fees cost a little more they represent good value for money and I'm always happy to explain why to a landlord.

Kelly Joanna

12:16 PM, 10th March 2016
About 3 years ago

An agent can charge you whatever you agree to in the terms of business. The larger the company the higher the fee i.e. if this is a corporate or multi branch they charge high fee's plus countless add on's too.
Check the terms and see what notice you have to give to end management. Give the small business a try. Little agents value your business and generally work harder for a lower fee. You might find that they will deal with the handover for you for free of charge as an incentive, once you have given your notice to the current agent.

Chris Clare

16:27 PM, 10th March 2016
About 3 years ago

The reality is it costs money to manage property and when you see these agents competing at silly percentages you have to wonder how they make it work, do they have additional hidden charges or do they just neglect the job?

If I were you and was happy with what I had been getting I would not question it.

Ian Ringrose

17:31 PM, 10th March 2016
About 3 years ago

The “standard” for normal full management (single let) is, 10% of the rent, and half a month’s rent each time a new tenant needs to be found. (Plus vat) Students and HMOs often cost more, as the agent has to do more work.

Some agents add lots onto the cost of repairs, or will only use trades people that give them a 50% “bribe”. Other agents just use the most expensive trade’s people as they are less effort to deal with. I have yet to find a way to compare the “real” costs between agents, due to this sort of issue.

As others have said you need to read agent’s T&C to know what it costs to leave them.

Gillian Schifreen

9:43 AM, 12th March 2016
About 3 years ago

Reply to the comment left by "Neil Patterson" at "10/03/2016 - 10:11":

How do Letting Supermarket deal with repairs?

Nick Pope

11:37 AM, 12th March 2016
About 3 years ago

I have properties in north Berkshire and south Oxon and I have taken to employing agents to find a tenants and collect rent (I manage repairs etc.) for which the charge is 6% plus lease preparation. I also insist on holding the deposit in the free DPS scheme rather than the agent schemes (£15 - £20 per month). I sign their contract but add a clause of my own - agreement terminable after 1 year at either party's option and fees cease thereafter. If they behave and do as they are told, pay the rent on time etc. then I don't take up the option and let them continue. It's worked so far!

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