The estate agent's gravy train speeds on | Money | The Guardian

The estate agent's gravy train speeds on | Money | The Guardian

Ten years ago Christian Harper was working at estate agents Foxtons in the Chiswick area of west London. It's upmarket, and one of the homes he helped sell went for £302,000. The firm collected a fee of £6,000, which he thought reasonable given the amount of work involved – these were pre-internet days, which meant spending a fair bit of time and effort on brochures and local newspaper advertising, on top of the business of valuing, showing people around and negotiating.

Fast-forward eight years. House prices, particularly at the top of the market, have galloped ahead. The house went back on sale, with alterations and improvements, at £2m. Harper estimates that the fees earned by the agent from the sale were a cool £40,000. Yet less legwork would have been needed, he says. "The investment in marketing the house would probably be less as most marketing is internet-based. I am not aware of any other industry that could charge £34,000 more for doing less work, just because of market prices – outrageous! I have debated this point many times and, to date, not one agent could justify why they charge double the price to sell a house at £1m compared with one at £500,000."