Wine Merchants go bust but estate agents doing very nicely

What do we expect if we buy everything at Tesco?

At least three off licenses and wine merchants have closed on Western Road/Church Road in Hove recently. I guess we only have ourselves to blame for shopping in super markets. I used to enjoy getting a vid from the local DVD rental shop and then choosing a bottle of plonk but now I am forced to queue up at the Tesco Metro behind people buying sandwiches or pasties or washing powder.

The news covered the fact that the recession had hit wine merchants but estate agents still seem to be thriving. Western Road/Church Road seems to have just as many estate agents. This is not surprising as, though property prices may have dropped around 10%, they are still up as much as 300% on ten years ago. As the general public are stupid enough to pay estate agents a percentage based commission their income must have sky-rocketed too. The estate agents in Church Road seem to think that the pavement outside their shops is a private parking space for their Jags and Porches. Nothing like rubbing it in!

Cut backs? - Not bloody likely!

It seems to me that whenever one deals with large sums of money one finds that the “professionals” involved demand a percentage based fee. Whether you are investing in funds or buying a property the professionals want a piece of it. When you are forking out 300,000 for a property the addition of another £4,500 can be easily overlooked but I see no reason why the estate agent should earn more merely because the property prices have increased. It seems to me that the estate agent business is money for old rope. Ask yourself: What do estate agents do? They keep a list of properties. They stick pictures in their windows. They maintain a web site. They keep your keys and show people around your house. And for that they can demand 2%. That is outrageous.

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One comment

  1. As a person who works on commission for large investments (not real estate, but advertising in my case), I have a different perspective on this. When advertising rates go up, sure, I make more money on each sale. But, when prices are high, there are fewer buyers and my overall income is generally depressed. When prices are cheap, I work harder, but the volume is high and my income is better. So, increased prices don’t necessarily spell a windfall for realtors.

    The other thing I would like to point out about commission sales is that unlike the salary or wage earner, without the sale, the salesperson brings home no pay check. Babies crying to be fed, creditors on the phone, that sort of thing. There is a lot of work that is done that is completely uncompensated, such as when a realtor spends an entire Saturday driving a buyer around and later realizes the buyer was just window shopping with no real intention to buy. Nine tenths of a realtor’s time is spent on work that never comes to fruition.

    So why should they exist at all, you ask. Because they know the business and can save buyers from costly mistakes in the form of tricks from disreputable sellers, overpaying on a purchase that might have been negotiated down further, and missing out on properties they may not have found on their own.

    Buyers and sellers have the choice of going it alone if they choose, but my contention is that brokers do provide a service for which they deserve compensation.

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