Estate agents warned against competing on fees

The useful part

Professionals says agents can become difficult to distinguish when their valuation pitches look similar. McKenzie said: "When someone needs a solicitor, accountant, architect or financial adviser, they rarely begin by asking who charges the lowest fee. "Cost plays a part, but it is usually considered alongside the experience and expertise of the professional, and the confidence that they will achieve the right outcome." He said estate agency can be different.

How it works

• Consumers may see competing firms as offering broadly similar services, marketing and technology.
• They are often naive and vulnerable and oblivious to the follow up questions they need to pursue once given the pitch.
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• "If every valuation presentation sounds similar, every marketing proposal follows the same structure and every agent describes their service in much the same way, it's hardly surprising that clients look to...
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What to take from it

He argues that agents who fail to demonstrate those differences risk making commission the main battleground. 'The fee becomes easiest to compare' McKenzie believes agents need to demonstrate their differences in areas such as negotiation, judgement and sales progression. "Great negotiation, sound judgement, strategic advice and the ability to navigate complex transactions aren't always visible at the point of valuation," he said.

Example or evidence

• Competence has its place but Character is they key to building relationships.
• "You're choosing the professional who will represent one of your most valuable assets and guide one of life's most significant financial decisions.
• "That means the more useful question isn't necessarily, 'Who charges the lowest fee?' It is, 'Who is most likely to achieve the best outcome?'" McKenzie said agents have become good at explaining what they do.
• In my opinion, the potential client is not qualified to judge what they are told.

Details worth keeping

That can leave vendors with one obvious point of comparison: the fee. Instead, agents need to explain what vendors receive for their commission. "Appointing an estate agent isn't simply buying a service," he said.