Quote:
Originally Posted by Mike Harte
Not quite so, Peter. Most "middlemen" that you mention usually charge a fixed percentage fee regardless whether that is for purchase or sale, meaning that their cut is lesser the lower the sale price achieved.
This is one of the myriad reasons that there has been behind the consolidation within the life assurance industry. As returns on investments saw investment funds either stagnating or even losing value, so their fees and charges reduced. This left many companies unprofitable.
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Many investment pots too. At least compared to everyone's expectations when they were set up.
That said when my mother died and it came time to sell her house the Estate agent selected managed to talk a good talk but achieved absolutely zero results despite the property being in a desirable area and the market being reasonably buoyant at the time.
But it was 5 miles from their local office in a nearby town so perhaps not "on their map".
I placed it with the village Estate Agent and got an immediate bite and sale purely for the local convenience factor. The trouble was to try to judge whether the fact that the EA was also selling the buyer's apartment was a positive or negative thing.
On the one hand the buyer was unlikely to drop out. She had a business in the village and her daughter and family lived within 50 yds of my house.
On the negative side the EA had no reason to anything more than sit and wait whilst the lady's buyer dicked about for around 6 months failing to get his act together to complete the transaction despite having no property to sell. With interest rates as they were at the time and the costs of keeping the property insured, etc, that idiot's messing around cost me several thousand pounds and my buyer several months of aggravation. The market probably rose quite a lot during that time as well and my agreed price to sell had been based on the expectation of a quick and easy 3 person chain.
It would have been in the interest of an independent EA to discuss ways to speed up the process or adjust the price. But as my chap was gaining commission from both parties he had no real interest to do so and, of course, the client staying in the area was potentially far more useful to him than I would be.
I look at my few investments over the past decade and note that the values now are much what they were then (or less) and only those taking fees seem to have had any benefit even before we consider the effects of inflation. Even then one suspects they have not really profited so much as generated some turnover.