I’ve never understood this, so I’m hoping someone kind, gentle and sexy can shed some light onto the matter…
Most high-street letting agents charge both tenants and landlords fees during the process of finding-tenants, which actually makes no sense to me. I understand why agents charge landlords, but why the tenants? It’s like car dealerships charging someone a premium for buying a car. In fact, it’s like any consumer being charged to…errr…consume.
I know that the local agents around where I live charge tenants approximately £100. At least it was that last time I checked about a year ago. I’m not entirely sure if that’s a pretty standard rate across the country, or whether it drastically varies. Actually, I’m going to stop writing this post right now, and quickly throw the question out there on Twitter (quite a few Letting Agents follow me on Twitter)…
A few hours later…
Right, I’ve got a few responses, and here they are…
Ok, so it seems as though the prices do vary, and the premium is justified as “admin costs”, which I still don’t fully understand. What admin work is actually done for tenants to justify a £50 – £200 fee? Let’s not forget, the client is the Landlord, and NOT the tenant. So is it just me, or is it odd/unfair that a tenant has to pay a premium when Landlords are already paying through their noses for a service?
What’s more frustrating is that a lot of agents charge tenants the same admin fee again if a tenant decides to stay in a property longer than the fixed term in the tenancy agreement. The cost is commonly known as a “renewal fee”
So, for example, suppose I’m a tenant and a letting agent finds me a property, which I sign a one year contract for. If I decide to stay in the property for longer than a year, I have to pay the admin fee again. Seriously, WTF?!? What extra admin work actually has to be done? IT MAKES NO SENSE TO ME, especially when the Landlord also has to pay a renewal fee (but that’s an entirely different rant all together).
I just assume that a lot of agents don’t even know WHY they charge that admin fee, they just do it because all agents do it… and of course, it’s profitable.
If I were a tenant…
Assuming I was adamant on using a letting agent to find a property to rent, I would do the following:
- Rates obviously vary from agent to agent, so I would get quotes from all local agents to see which one offers the most competitive rate
- Agents themselves have told me the rate is open to negotiation, so I would try and get the lowest rate possible
- If rates seem excessive, I would ask the agent what exactly I’m paying for. If the figures don’t stack up and I feel as though I’m being taken for a ride, I’d probably walk out based on principle.
- Find out exactly what the implications are regarding the extension of the tenancy agreement e.g. If I decide to stay in the property longer than the fixed term, am I liable to be charged another admin fee? Some agents don’t charge a renewal fee, some do, it’s best to find out. Moreover, if the agent says there is NO renewal fee, I’d get that in black and white. Remember, you’d be a fool to trust a fool.
I’d just like to say many thanks to those on Twitter that responded to my question. It’s a bit of a shitty situation actually; they were kind enough to respond, but I’ve kind of stabbed them in the back by saying it’s a bullshit fee. Sorry, guys.
Love and Peace.