On a recent course, at my own expense I might add, covering legal compliance, and elements of managing and running an effective and efficient business with the overarching theme that it is crucial to understand the value of the service an agent offers to their client I could have bit my tongue trying not to whiplash the agents that spoke of their delivery of service. Embarrassed that some actually thought that’s all landlords and tenants deserved. Anger boiled through my veins for much of the day.Fees were a major part of the conversation throughout the day both in class and out. Comparisons bandied around like a football.
By the end of the day, all the agents present were reconsidering their fee structure and how they “market” their service to the consumer – i.e.; landlord & tenant.
Some were not intending to be as open as others it has to be said and had hidden surprises for the landlords further into the signed contract…. not nice.
Most ranged from 11% – 15% on a monthly basis with a setup fee for the landlord.
For Introduction Only /Tenant Find, Only the average was around at 10%.
For the tenant the average for Referencing/Admin combined is £175.00 per applicant plus vat – remember all fees MUST by law be shown INC vat. If there are any “miscellaneous fees” to be charged it is paramount that these appear on the schedule of fees displayed in the office or/and on a line for the consumer to see.
No one admitted to any add-ons, many weren’t aware that they should have all their fees open and on their web page.
one agent in the room proudly declared their company was charging 5% for a Fully Managed Service. Interesting I thought how do they make it a viable company, what kind of service is being offered, what doesn’t the landlord know about?
My mission this day was to find out. Finally, after much small talk the candidate bragged openly: His intention was to wipe out as much of the competition in his area, get the landlords to sign a 5 year locked in agreement then increase the price by 3% per year but charge for every service they had during that time at least 20 %above the local average claiming most landlords never noticed and by the time they had signed up it was too late…… cringe – make your own mind up about that one.
For us at Mac, service is everything along with communication, accessibility, and everything being transparent. What another agent could you call at 11pm at night and not get an answerphone service if you’re a tenant or landlord? The services being offered by other agents, on that training day, was definitely, in my opinion, relative to the cost.
We have recently increased our fees for the first time in several years after much deliberation.
WHY INCREASE YOUR FEES you are bound to ask?
13 changes in legislation that agents have had to deal with in the last 13 months. Keeping up involves training, internal system, and process changes, amending and updating paperwork, buying new template documents, keeping the landlord up to date, sourcing new suppliers and so it goes on. And this is just when there is change occurring. This excludes the day – to – day provision – communication, negotiation, mediation, trouble-shooting, guidance, advice and support plus the compulsory landlord licencing in some areas costing both the agent and the people employed by the agent.
What can be charged for? Anything providing is made clear as per the Consumer Rights Act 2015. Most of the time we do not charge for everything on our listed fees page because we feel delivering and amazing service is more important. Sometimes when this is pointed out landlords and tenants alike are surprised and quite shocked.
We take what we do very seriously but in the main worry about whether we should be charging 12% for a fantastic service up until three weeks ago I attended a landlord forum. 100 hundred or so landlords present, listening to a group of speakers because they wanted to be informed, know more or offload their portfolio to a reputable agent with standards and values having received appalling services previously. Don’t get me wrong there we some awful landlords in the room too who thought they were well above the law – we won’t be working with them.
Finally, my thought to you for today is:
Managing your property is less than the equivalent of buying a coffee at Starbucks or one of the other leading brand coffee shops daily. This is your investment and possibly your pension wouldn’t you want to be with a company that cares and can keep you and your tenants legally compliant and informed.