Real Estate Agents Fee Highway robbery

[DisparateDan]

Sorry the cruncher that dont wash with me, If theres lack of clients why is there constructions going up on every bit of spare land in and around Pattaya, No excuse whatsoever to scam the potential buyers

More so in Jomtien.You are asking the multibillion dollar question. Bubble, bubble, ...and trouble ??

[chris2004]

I don't doubt the truthfulness of the statement, I just find it difficult to believe that this can be financially viable in all Real estate listings.

Perhaps in listings over a certain amount, where 1% would be sufficient to cover expenses and provide a return.

Or is it possible that real estate is so expensive in the UK where a 1% commission is adequate?

Prices are certainly quite high in the UK, depending on the area. But there are many areas in the UK where terraced houses (townhouses) go for between 3MB-4MB (equiv.) and the fees for these are still the same 1%, or 30-40KB (equiv.). So that would compare well with a medium sized condo or townhouse in Jomtien, yet here the agents would be wanting anything up to 200KB for the same sale.

I think the main difference in the UK is that there agents actually sell properties every day rather than just having thousands of listings but rarely, if ever, making a sale. And vendors in the UK generally want to sell their properties when they put them up for sale, and aren't just testing the water.

Many agents in the UK would expect to sell a decent property at a sensible price within a month of listing it, if not within days or even hours.

Only in London. My property in Yorkshire has been up for sale (at a very sensible price) for 9 months with no hint of a sale.

[KittenKong]

Many agents in the UK would expect to sell a decent property at a sensible price within a month of listing it, if not within days or even hours.

Only in London. My property in Yorkshire has been up for sale (at a very sensible price) for 9 months with no hint of a sale.

Not only in London. I'm not saying that every part of the UK has a booming market but there is certainly good demand in areas outside of London.

But if your place has generated no interest in 9 months then maybe your price isn't as sensible as you think it is? Or maybe your agents aren't advertising it at all?

[AnotherOneAmerican]

I just learned something, basically you are saying all those young farangs I see sitting in Alan Bolton's office and the real estate offices all over Pattaya do not have work permits. I would think they could qualify because they have English, Russian, German language skills (amongst others ) that are not possessed by a Thai.

As you're there, why not ask one of them for a look at his work permit?

I would be interested to see what it says.

(All foreigners are required by law to have their WP available for inspection at their place of work, if they can't show it, they don't have one)

[ToddinChonburi]

The USA is 6 or 7% depending on the realitor company. yes and they do nothing for it.

[DD13]

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Most of us know "roughly" what our properties are worth and the net figure we would like to achieve

So tell the agent to put their fees and taxes "on top".......whatever percentage they want......they can have 10% if they want to put the effort in.....

They may not like it.....but "hey" they are working for you.......not the other way round....

We all know that the majority of agents world-wide are frowned upon..."Chancers"... who couldn't get a real job even if they tried to.....and it's no different here ....worse if anything.....

I am inclined to agree that a panoramic sign on your wall probably works just as well........
probably only cost a couple of thousand Baht....

thats a daft idea. Your property will never sell. Buyers will always compare the price of your place to others on the market

I have sold many properties this way in the UK..............(Property was/is my business)

[Munger]

I cant believe that in the UK they will take 1% .

It is the truth.

But the Thai apologists still dont want to believe it. Everything MUST be better in Thailand. Now for samp duty / tax, nothing for the first 125 K, then 1 % after 250 K. in the UK. What is it in Thailand 5 /6 % on all sales ? Defend that "icladius"

[TheCruncher]

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Most of us know "roughly" what our properties are worth and the net figure we would like to achieve

So tell the agent to put their fees and taxes "on top".......whatever percentage they want......they can have 10% if they want to put the effort in.....

They may not like it.....but "hey" they are working for you.......not the other way round....

We all know that the majority of agents world-wide are frowned upon..."Chancers"... who couldn't get a real job even if they tried to.....and it's no different here ....worse if anything.....

I am inclined to agree that a panoramic sign on your wall probably works just as well........

probably only cost a couple of thousand Baht....

thats a daft idea. Your property will never sell. Buyers will always compare the price of your place to others on the market

I have sold many properties this way in the UK..............(Property was/is my business)

Didn't realise that Pattaya was in the UK these days.

[AnotherOneAmerican]

But the Thai apologists still dont want to believe it. Everything MUST be better in Thailand. Now for samp duty / tax, nothing for the first 125 K, then 1 % after 250 K. in the UK. What is it in Thailand 5 /6 % on all sales ? Defend that "icladius"

In the UK I believe you need to employ a solicitor to buy or sell a property.

I'm thinking that would cost more than the Thai transfer tax on many properties.

[Munger]

But the Thai apologists still dont want to believe it. Everything MUST be better in Thailand. Now for samp duty / tax, nothing for the first 125 K, then 1 % after 250 K. in the UK. What is it in Thailand 5 /6 % on all sales ? Defend that "icladius"

In the UK I believe you need to employ a solicitor to buy or sell a property.

I'm thinking that would cost more than the Thai transfer tax on many properties.

Nonsense, you do not "need" a solicitor, you can do it yourself.

[PattayaPhom]

I cant believe that in the UK they will take 1% .

It is the truth.

But the Thai apologists still dont want to believe it. Everything MUST be better in Thailand. Now for samp duty / tax, nothing for the first 125 K, then 1 % after 250 K. in the UK. What is it in Thailand 5 /6 % on all sales ? Defend that "icladius"

250k attracts 3% stamp duty

[Munger]

I cant believe that in the UK they will take 1% .

It is the truth.

But the Thai apologists still dont want to believe it. Everything MUST be better in Thailand. Now for samp duty / tax, nothing for the first 125 K, then 1 % after 250 K. in the UK. What is it in Thailand 5 /6 % on all sales ? Defend that "icladius"

250k attracts 3% stamp duty

NONSENSE, its 1% for a sale of 250,000 K, and above that ie, 250,001 up to 500,000 K. it is 3 %. Wise up.

[KittenKong]

In the UK I believe you need to employ a solicitor to buy or sell a property.

I'm thinking that would cost more than the Thai transfer tax on many properties.

Nonsense, you do not "need" a solicitor, you can do it yourself.

You certainly can do it yourself though I think most people still employ someone to do the conveyancing.

[KittenKong]

In the UK I believe you need to employ a solicitor to buy or sell a property.

I'm thinking that would cost more than the Thai transfer tax on many properties.

Employing a solicitor (which is optional) to handle the whole transaction (conveyancing, searches, contracts, exchange of funds) wont come to anywhere near the cost of just the Thai transfer tax. In fact even if you take the full cost of a solicitor and the full UK stamp duty (transfer tax) and the full agent's commission you still wont come close to the cost of just the transfer tax here, except on very expensive properties.

And of course by using a solicitor in the UK you do get the benefit of knowing that you are very unlikely to get ripped-off in the transaction, and if you are then there is an insurance bond that should cover your losses. The same cannot be said here.

Thailand is a surprisingly expensive place to buy/sell residential property when compared to the UK.

[AnotherOneAmerican]

In the UK I believe you need to employ a solicitor to buy or sell a property.

I'm thinking that would cost more than the Thai transfer tax on many properties.

Employing a solicitor (which is optional) to handle the whole transaction (conveyancing, searches, contracts, exchange of funds) wont come to anywhere near the cost of just the Thai transfer tax. In fact even if you take the full cost of a solicitor and the full UK stamp duty (transfer tax) and the full agent's commission you still wont come close to the cost of just the transfer tax here, except on very expensive properties.

And of course by using a solicitor in the UK you do get the benefit of knowing that you are very unlikely to get ripped-off in the transaction, and if you are then there is an insurance bond that should cover your losses. The same cannot be said here.

Thailand is a surprisingly expensive place to buy/sell residential property when compared to the UK.

Bought a new 3 bed house in Thailand last year, Land Office costs were 34,000bht (paid by developer).

What were your costs as buyer in UK last time you purchased?

Just wondering?

[KittenKong]

Thailand is a surprisingly expensive place to buy/sell residential property when compared to the UK.

Bought a new 3 bed house in Thailand last year, Land Office costs were 34,000bht (paid by developer).

One should compare like with like. I'm talking about resale properties not new builds.

[DLock]

We had our house and land with several agents. A few brought people to view. In the end the wife had some large tarpaulin signs made up and placed them by the road near the house. They generated more viewings and an eventual sale. We saved ourselves the 5% and the wife started to sell a few houses and land herself and just charging 2%.

Without an office she has managed to sell some land and houses.

And that is the answer to the ops question ,why do all sellers complain ,if you dont like the fees do it yourself stop f ----moaning. or open an office ,pay the rent ,aircon charges staff charges ,petrol charges ,rates ,income tax electricity bills water bills ,and sit there day after day instead of going out having a life.

and to answer Jessie ,thats the excuse.

So, you're saying that UK firms that charge 1% can afford to pay all the above (maybe heating instead of aircon), but somehow it costs more in Thailand to rent a dodgy shophouse, pay cheap Thai admin staff, utilities, a web server and also pay tax?

You aren't in real estate by chance are you, because your logic makes zero sense?

...although they do sit there pretty much all day...reading Facebook or playing Angry Birds.

[Robert2006]

The USA is 6 or 7% depending on the realitor company. yes and they do nothing for it.

To make a comment like that is stunning to me, the fact that you believe people would pay 6-7% of the most expensive possession they own for a service from someone that did nothing to earn the money is honestly fascinating. The reality is it requires an extensive array of knowledge and skills to broker real estate transactions, if you think it’s so easy try to get a broker’s license you will be studying and working for a minimum of three years before you even qualify to take the test.

To successfully broker real estate transactions, tremendous knowledge is required and that knowledge takes years to obtain, if a broker has not closed 300 transactions they are a novice. Additionally there are many aspects of the business ranging from reselling residential homes to selling huge commercial properties; brokers tend to specialize because each area has its unique set of skills that have to be mastered.

Sellers and buyers (98% in the USA) rely heavily on brokers when they sell or purchase real estate. Primarily sellers (that pay the brokers) want help accurately estimating the value of their property, marketing and selling the property, negotiating with buyers, they want explanations in plain English of the contracts, addendum's and documentation and they want someone experienced to oversee and coordinate the closing of their transaction.

Its fascinating to me that you would consider a broker could sell a property and earn 6-7% without doing anything for it, maybe you could explain how you think that is done for me.

[Munger]

We had our house and land with several agents. A few brought people to view. In the end the wife had some large tarpaulin signs made up and placed them by the road near the house. They generated more viewings and an eventual sale. We saved ourselves the 5% and the wife started to sell a few houses and land herself and just charging 2%.

Without an office she has managed to sell some land and houses.

And that is the answer to the ops question ,why do all sellers complain ,if you dont like the fees do it yourself stop f ----moaning. or open an office ,pay the rent ,aircon charges staff charges ,petrol charges ,rates ,income tax electricity bills water bills ,and sit there day after day instead of going out having a life.

and to answer Jessie ,thats the excuse.

So, you're saying that UK firms that charge 1% can afford to pay all the above (maybe heating instead of aircon), but somehow it costs more in Thailand to rent a dodgy shophouse, pay cheap Thai admin staff, utilities, a web server and also pay tax?

You aren't in real estate by chance are you, because your logic makes zero sense?

...although they do sit there pretty much all day...reading Facebook or playing Angry Birds.

No, "iclaudius" is not in real estate, he does not even own a house, but he will not admit that anything is a rip off, or even more expensive in Thailand, period.

[ThaiBob]

Robert2006,an excellent post. I only wish the realtors here were as professional as they are in America.

[KittenKong]

Its fascinating to me that you would consider a broker could sell a property and earn 6-7% without doing anything for it, maybe you could explain how you think that is done for me.

It seems pretty clear that agents in Thailand do indeed get up to 5% commission (maybe up to 8% on new build sales) without actually doing very much, and certainly without any proper training or qualifications or (in many cases) even any knowledge.

It also seems pretty clear that UK agents do a proper job for 1% or so.

So I would like to know how you think that US agents justify their high fees by doing so many times more work than the UK agents do, because I just cant see it.

And I would also like to know why agents here think they are worth 5 times a UK agent, because I cant see that either.

[Robert2006]

Its fascinating to me that you would consider a broker could sell a property and earn 6-7% without doing anything for it, maybe you could explain how you think that is done for me.

It seems pretty clear that agents in Thailand do indeed get up to 5% commission (maybe up to 8% on new build sales) without actually doing very much, and certainly without any proper training or qualifications or (in many cases) even any knowledge.

It also seems pretty clear that UK agents do a proper job for 1% or so.

So I would like to know how you think that US agents justify their high fees by doing so many times more work than the UK agents do, because I just cant see it.

And I would also like to know why agents here think they are worth 5 times a UK agent, because I cant see that either.

Why is 1% is the standard fee in the UK, quite honestly I have no idea, certainly in the US you could not even effectively advertise a property with that kind of money.

I believe I’ve already explained (in simplicity) why US brokers earn their fees, brokering transactions is one of the world’s most lucrative occupations not because it’s easy but because it’s complex and valuable.

You get what you pay for and to obtain a skilled negotiator and quality services costs money, compensation provides the incentive and motivation to perform. Obviously the lower the compensation the lower the skill level of the individuals that will be attracted to that line of work.

No one forces sellers to hire a real estate broker, sellers have the choice, and if you believe you can obtain a quality service for your transaction with 1% then simply use those individuals that charge those fees or perform the service yourself.

[Robert2006]

Robert2006,an excellent post. I only wish the realtors here were as professional as they are in America.

Thank you ThaiBob. In the US it’s a very challenging undertaking to become licensed as a real estate broker; it requires a commitment in time and effort similar to obtaining a bachelor’s degree, therefore we are well trained before we reach the status of a broker. It’s got to a level in the US with all the new technology that’s truly exciting however it’s added new layers of skills that have to be acquired. It’s made the business much better and more accurate but considerably more complex to learn.

Unfortunately Thailand has never been exposed to the way we work in the US and I don’t see that changing anytime soon. I found it truly fascinating discussing real estate with brokers in Thailand. Regrettably and I hate to say this but I never encountered a broker in Thailand I thought was competent, I’m sure they exist but I personally never met one.

[KittenKong]

I believe Ive already explained (in simplicity) why US brokers earn their fees, brokering transactions is one of the worlds most lucrative occupations not because its easy but because its complex and valuable.

You get what you pay for and to obtain a skilled negotiator and quality services costs money, compensation provides the incentive and motivation to perform. Obviously the lower the compensation the lower the skill level of the individuals that will be attracted to that line of work.

This appears to be a huge glamorisation. Real estate agents are salesmen, just like car salesmen and washing machine salesmen. There's absolutely nothing special about their job or their talent.

No one forces sellers to hire a real estate broker, sellers have the choice, and if you believe you can obtain a quality service for your transaction with 1% then simply use those individuals that charge those fees or perform the service yourself.

All agents in the UK charge a low rate and the UK has a very active property market. Yet from what you are saying there should be no UK market as the agents there dont even get enough commission to advertise a property. Clearly something somewhere doesn't add up.

[Robert2006]

I believe Ive already explained (in simplicity) why US brokers earn their fees, brokering transactions is one of the worlds most lucrative occupations not because its easy but because its complex and valuable.

You get what you pay for and to obtain a skilled negotiator and quality services costs money, compensation provides the incentive and motivation to perform. Obviously the lower the compensation the lower the skill level of the individuals that will be attracted to that line of work.

This appears to be a huge glamorisation. Real estate agents are salesmen, just like car salesmen and washing machine salesmen. There's absolutely nothing special about their job or their talent.

No one forces sellers to hire a real estate broker, sellers have the choice, and if you believe you can obtain a quality service for your transaction with 1% then simply use those individuals that charge those fees or perform the service yourself.

All agents in the UK charge a low rate and the UK has a very active property market. Yet from what you are saying there should be no UK market as the agents there dont even get enough commission to advertise a property. Clearly something somewhere doesn't add up.

Absolutely fascinating, does your opinion come from experience, how many real estate transactions have you been a party to in your life? Do you understand some of the more esoteric aspects of brokering real estate such as discounting paper, wrapping mortgages, projecting and evaluating income streams for yield, the time value of money or the underwriting and analyses involved in structuring financing? Are you familiar with the technique to unwind a seller from a foreclosure proceeding while obtaining a non-recourse full satisfaction and discharge of the note and mortgage with no deficiency judgment from his lender; (that’s currently a very lucrative technical procedure to know in the US) I’m fascinated to know your background.

Certainty brokering real estate is much more technical than selling a washing machine I think you trying to get a rise out of me, to believe they involve a similar level of competence is honestly a foolish assumption.

[balo]

Which real estate agent will you recommend in the Pattaya area that are fair and do a good job?

I dont mind paying the fees as long as they do not sit in their chair all day and actually try to find a buyer.

[Denim]

Never use an estate agent. They do very little you couldn't do yourself with a bit of effort.

Just as a matter of interest, I have sold three properties here myself, all without the use of agents. I used just about every free Thai website there is to list each property and put fliers up everywhere within a 1 k distance. .......Waste of time.

Every property was sold to somebody who saw the for sale sign outside the property and had a relative that was interested. On two occasions, I paid 5000 baht to some local who said they would introduce me to a guaranteed buyer ( a relative ) and did not feel cheated as they did indeed come up with a buyer. A lot better than paying agents fees anyway.

[SGD]

1%?..Really? In the US the normal selling fee is 6%...3% for the listing agent + 3% for the buyer's agent...that can be the same person......

What fool pays an agent as a buyer ?

Do you have an agent to go shopping ?

Do you have an agent to buy a car ?

Do you have an agent to go to the toilet ?

[KittenKong]

I believe Ive already explained (in simplicity) why US brokers earn their fees, brokering transactions is one of the worlds most lucrative occupations not because its easy but because its complex and valuable.

You get what you pay for and to obtain a skilled negotiator and quality services costs money, compensation provides the incentive and motivation to perform. Obviously the lower the compensation the lower the skill level of the individuals that will be attracted to that line of work.

This appears to be a huge glamorisation. Real estate agents are salesmen, just like car salesmen and washing machine salesmen. There's absolutely nothing special about their job or their talent.

Absolutely fascinating, does your opinion come from experience, how many real estate transactions have you been a party to in your life? Do you understand some of the more esoteric aspects of brokering real estate such as discounting paper, wrapping mortgages, projecting and evaluating income streams for yield, the time value of money or the underwriting and analyses involved in structuring financing? Are you familiar with the technique to unwind a seller from a foreclosure proceeding while obtaining a non-recourse full satisfaction and discharge of the note and mortgage with no deficiency judgment from his lender; (thats currently a very lucrative technical procedure to know in the US) Im fascinated to know your background.

Certainty brokering real estate is much more technical than selling a washing machine I think you trying to get a rise out of me, to believe they involve a similar level of competence is honestly a foolish assumption.

And what does any of that have to do with selling normal residential property either here or in the UK or in the US? Nothing at all. Yet you seem to think that doing so merits 6% commission. Dream on. Better still, charge 6% for complex commercial transactions that might require some of that esoteric knowledge, and charge a more sensible 1 or 2% for the average domestic sales that require no special knowledge at all, apart from the ability to drive a car and find an address.

To me your list of "esoteric aspects of brokering" sounds suspiciously like it came from the list of causes of the sub-prime mortgage catastrophe that nearly bankrupted the entire planet a few years back.

[fosseway]

I hope the links below will throw some light on this everlasting blog.

http://www.mypropertyguide.co.uk/articles/display/10009/the-commission.htm--

http://www.economist.com/node/21554204