According to EstateAgentToday, the number of estate agents should be culled hard and they should stop charging percentage-based commissions. Apparently, in parts of London, they only need to sell one house a year to keep themselves in Armani suits and Gucci loafers, says The Guardian.
Now, we realise that the Grauniad and estate agencies are not natural bedfellows, but the article by Phillip Inman does seem to miss a few points. (Has he not heard of no sale, no fee? And isn't it a bit harsh to advocate that people should actually lose their livelihoods?)
Writing about the redundancies at Lloyds, he says they are sad for the families concerned, but that the industry always needed to shrink. "The next target should be the estate agent," he writes.
"Too many independent shop owners are elbowed out by estate agents prepared to pay ridiculous rents. They can only do it because they have convinced homeowners that percentage-based commissions are an acceptable, if not necessary, practice" he explained.
"Property price rises of 300% or more in the last 20 years mean they earn exceptional profits, especially in the south-east, where land and property prices remain at pre-recession levels" he further added.
"In some parts of London they only need to sell one house a year to keep themselves in Armani suits and Gucci loafers" he said criticizing agent's unlimited profits. "Just as the financial regulator is about to outlaw commission-based sales practices by financial advisers, commission should be banned in estate agency" he added.
Financial advisers now have to move over to a fee-based model, rather than charge a sales commission on products such as mortgages.
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