The true disruptors of the Industry
Over the last two decades many low-cost estate agencies ("Low Cost Agencies") have sprung up, worldwide. These Low-Cost Agencies involve estate agents either to a lesser extent or not at all. (e.g. Private Property, Purple Bricks, Property Fox, Leadhome). Traditionally, an estate agency was a "high touch" industry where the personal and active involvement of an estate agent played a pivotal role. This is why sales commissions remained high.
Top agents demanded a high income, thereby forcing the industry to keep the going rate of sales commissions high. To remain profitable, it meant that "Low Cost Agencies" had to eliminate certain conventional estate agency services offered by estate agents either completely or partially. This would be showing the property, arranging show days, staging the interior of the house, et cetera. This also meant that the same degree of 'high touch' or 'super' involvement was not possible. (Low Cost Agencies simply cannot afford these top high touch agents). This is why conventional agents still have a future and an opportunity to survive in this highly competitive and disruptive industry.
However, there is no doubt that these disruptors (Low Cost Agencies) have upset the apple cart and have forced all agencies, who wish to remain relevant and competitive, to reduce their commission rates. As a consequence, the going rate of 7% to 8% sales commission (Usually plus VAT) has, on average, dropped to 5% plus VAT and it may drop even further. To remain competitive and profitable, most conventional estate agencies will find it hard if not impossible, to drop below 5%, let alone 3%.
This is where 3%.Com Properties comes in on its own and are arguably the true disruptors of the industry.
Not only have 3%.Com Properties attorneys/conveyancers reduced their sales commission to more than half of the historic going rate (7% to 8%), but they can and do offer a full 'high touch' estate agency service, similar to that of conventional high-priced estate agencies. What is more, 3%.Com Properties attorney play an integral and pivotal part in these estate agency activities. (i.e. structuring the deal, preparing the sale agreement and co-signing the offer to purchase, transferring the property. [If requested to do so by the seller])
Thus, it truly offers a unique and one-stop service.
This is possible because of two very important factors and which make the value proposition of 3 %.Com Properties truly unique. The law practice of the attorney is used as the business hub from which the estate agency is run. This means that the cost of running the estate agency is virtually at no cost. Furthermore, the income derived from transferring the property is used to supplement the income of the attorney. This enormous cost saving is passed on to the seller. Thus, it becomes possible for 3%.Com Properties attorneys to operate effectively and profitably at a commission as low as 3% plus VAT. It must, be added that there is no obligation on the seller to instruct the selling attorney/conveyancer to do the conveyancing. It remains the prerogative and choice of the seller. 3%.Com Properties attorneys would never attempt or try to coerce a seller to use their services to transfer the property.
To conclude, because of the low cost of advertising property on the Internet, the fact that the attorney uses his legal practice as his estate agency office, the fact that the income stream is usually supplemented by the conveyancing ( which is paid by the purchaser), it is possible for 3%.Com Properties attorneys to offer a truly unique and comprehensive estate agency service that includes the evaluating, marketing, selling and transferring of the property and at a very low cost of 3% plus VAT.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)
Author: 3%.Com Properties