UK Landlord Forum / Life

Hi All, I want to get a rain check on my charges from my estate agent for letting out a three bed house, that I fully managed under their contract.

My current fee setup with the local estate agent (2016 to 2024) is based on the initial finders fees (4.5%) plus £300 for references and 4.5%  fee for each year, plus  £75,00 for tenancy agreement every two years. This arrangement is Coming to an end next month with new Tenants to be found by the existing estate agents.  All details under the terms of existing contract with the Estate agent " titled a "letting authority"

A New offer with the existing agent , under a new Letting authority states initial finders fees (6% of full year rent) then 6% for each  year for  with £75,00 for tenancy agreement every two years.

is this a normal?

can I just pay the initial finders fee  under a ther trms of the existing "Letting Authority" at 4.5% and then contract with the  new found tenant/s under terms of my own tenancy agreement (and issue them with gas cert, electrical certs and renting guides and file their Deposit  through the DPS myself) . 

Regards  Jaz

I assume that the £75 k is a typo?  I manage my properties,  but use an agent for the finding and setting up of tenancies.  There is a one- off fee which was 50% of first month rent,just gone up to 75%. For this he markets, does viewings, does refences and checks and protects deposit. There are extras which I don' t use, such as inventories,check- out.I never renew contracts, just go onto periodic tenancies.

I have not experienced these kinds of continued fees with anyone who offers a finding service. What is a new letting authority, do you mean the agents have been bought by another company ?   

Why would a Finder's Fee be a percentage?

Every time I have used that feature in the past it has been a flat rate - a flat rate for that piece of work makes sense to me. It being percentage-based does not.

You are obviously going for Full Management, so you are willingly tying yourself in to their fee structure. I wouldn't and I just did a very successful listing (of a 3 bedroom property) using OpenRent... very cheap. Referencing is £20 per Tenant, for example... not the £300 you cite. I would not do this - and I really don't do Tenant Find any more - I've used UPad and now OpenRent to just get it out there and communicate leads to me. I would also never allow a third party to manage the Deposit on my behalf.

Don't think you can't negotiate. You can. It's money for old rope to the Agent.

Have I misunderstood?  You say "that I fully managed" ,so is that not the case any more, you are paying for finding and full management from them? 

I never support tenant find only (or tenant find without full hands on management), because your incentives and the agent's aren't aligned.
You want a decent long term tenant and a lot of effort put into the selection, the agent wants a warm body with minimum work because there's no down side if it goes pear shaped. In fact, lots of churn is more money for them.

Also beware agents "suggesting" 12 or 24 month tenancies or suggesting that the prospective tenant insists on one. They usually just want lots of advance fees. 6 months, no renewal (so periodic) is the way to go.

A find- only service can work very well if you have a person you can trust.  I have not found much difference in the quality of tenant whether paying for full- management or find-only.

Well, everything works better if there's a person you can trust. I trusted my own agent (but I never did tenant find only with them either).

I'm not sure how much trust I could generate for an agent who I'm paying a few hundred quid to put someone into a quarter of a million pounds of building I own and then walk away. There's trust and then there's TRUST.

The 3 worst tenants I ever had were when I was using full-management. They gave me no more help with the consequences. The man I use rejects any obvious unsuitable applicants, and sends me a short-list with phone numbers if I want to chat with them.He has met and had a detailed talk with them all.

We are all different in our circumstances and other pressures. It suits me fine,I don' t mind the management but I don' t like doing viewings, and if I am preoccupied it's worth the fee to know all the documents are in order, and the deposit is sorted.

2 of the houses are with charities who approached me many years back.  I was able through various means to do due diligence on them myself.  The 3 flats I use this guy for are not often empty. One has been occupied by the same person for 14 years, and the other 2 change around on average every 3 years. I have no mortgages, so this is a very modest expense.

I am certainly very cynical about most agents,  and agree that many people can handle the general management themselves. Whether they want to is another matter.       

Makes sense!