Friction between private sellers and poperty brokers

In France, about 50% of all property sales are concluded without the help of a property agent (agent immobilier). There is a thriving service industry of websites and consultants helping the private owner to find a buyer. My own company, Immo à Trois, is such a consultant, concentrating on the international promotion of properties. We work exclusively for owners. At the moment our clients are private individuals, but we will also be glad to accept promotion jobs from construction companies.*

The attack of the broker

As soon as the property brokers (agent immobilier - AI) realise one their clients is promoting his property through our international network, the defence mechanism kicks in. Of course the promotion channels we use partly overlap the ones of the AI’s. Logically, they are not happy if they discover the same property all over the web 6% cheaper than their own price on the same websites. We’ve learned of several strategies that agents use to convince the private seller to back off and leave the selling to the professionals.

“It hurts the negotiations”

One of our clients recently asked us to take all his advertising down because two of the local agents both told him they were ready to accept offers from very interested clients and the ‘net price’ shown on many sites could hurt the negotiations. It seems the two agents - who are normally competitors in the region – have decided to work together to derail our campaign. The owner of the property is afraid to miss out on a sale and asks us to take down all the ads, virtually destroying all the hard work and investments we’ve already done. We obviously think the danger of missing out on a deal is fictional. First of all because we seriously doubt there are real clients ‘about to make an offer’. And secondly, if these clients see the net price on the web, but have already been shown around the house by the agent, they will just have to accept that they found the property first through the agent and the fee has to be paid. If the prospective buyers have not actually visited the house yet, the agent can hardly say they are about to make a serious offer.

“The price needs to be the same everywhere”

This is another wonderful argument clients sometimes tell us about. The agent will tell you that it is ‘not allowed’ to advertise with different prices for the same property. This is blatant nonsense, of course. A private seller can publish his own net price at the same time (and on the same sites) as the agency publishes his higher price. The agency is competing with the owner. If he is professional enough to find a buyer before the owner can do the same, he will have rightly earned his 6%. Does the owner beat him to it? Then they were outsmarted by an amateur (perhaps with a bit of professional help from Tough luck.

“Let me do the negotiation”

One client made the mistake of sending a private buyer that came through our network to go visit the house with his local agent. For the seller, this seemed like a logical solution. The AI has the keys, he is on the spot and can show the buyer around. But then the prospected buyer actually decided to buy the house. Not only did the property agent claim his full 6% fee, he also tried to convince the seller not to pay us our 1% for the publicity work. He claimed he did all the hard work, including lots of advertising, organising visits, negotiations... Immo à Trois had ‘only’ found the buyer.

Here’s an idea. If you want to try to find a buyer yourself and use the AI as your local contact, ask the AI to add a special clause to the ‘mandat simple’ stating that if you manage find a buyer, he can still do the final sale, but he will not get his full 6%. We think 2% is about reasonable for a sale that has been thrown into his lap, as compared to 0% he’ll get if you leave the visits to a neighbour and the paperwork to the notaire.

*Part of my motive for starting Immo à Trois is that I think the real estate agency fees in France are unnecessarily high. I believe the total external costs on a sale (not counting the legal fees of course) should not surpass 3%.

There is no answer. The system is very rigid and any change in price or even real competition would mean the closing down of at least 50% of the real estate agents. This will never happen, because the FNAIM lobbyists have too much clout in the decision making echelons of the gouvernement. Because of the protection of the trade with the 'carte professionelle', there is no real free market. They will do anything to protect the status quo.