Estate agents usually charge a fixed percentage of the selling price as commission, so they have an interest in higher prices. An estate can earn the same amount by selling 2 houses for £150,000 each or 3 for £100,000, and I don't think that selling a more expensive house involves proportionally more work.
All this said, I don't believe that estate agents can influence the market too much.
In message , Steve writes
Estate agents prefer volume to price. In fact, if a market is falling, but vendors will not consider reducing prices to reflect it, the agents will encourage them to do so.
Having said that, if their experience suggests that they can get more money for a client, they will do so - this is one of the things which enhance reputation.
In article , Steve writes
Estate agents just about *always* charge a percentage and obviously they have an 'interest' in rising prices. But their prime motivation is turnover.
If the price of a £100,000 house 20%, the agent gets about £400 more on a typical 2% commission - less if a joint agency. That would more than wiped out if the higher price led to fewer buyers and an extra few days added to attract a sale.
When prices soar, sellers have a tendency to hold on for a better offer, dragging out the process. Most old lags would be happy if prices never rose - as long as this meant lots of buyers remained in the market.
Mine hasn't. Not yet anyway.
I wonder how agents and their staff make ends meet in a stagnant market like we have right now. It must be pretty worrying, as they probably have mortgages themselves. There is a big change from a few months ago. Now I am being called, sometimes up to five times a day, by agents or builders I have contacted in the past, all trying to sell me something!
MM
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