Sir, Andrew Ellson (Thunderer, July 5) is right about estate agents’ commission. Perhaps he would “thunder” about a similar money-making practice. Managing agents of retirement property have commission payments written into purchase contracts so that on resale, a percentage of gross selling price is paid to them. The payments are typically 2-3 per cent, and retirement properties are in the £250,000 to £400,000-plus region.
Challenged about what service is provided to justify the commission, the answer has been, in the first instance, that a managing agent was acting like an estate agent. This later was revised to “dealing with the transfer premium”. In practice, it can amount to little more than keeping a list of inquirers and the onsite manager showing them around any communal areas.
Not all retirement property resales are dealt with like this, but it is a practice that should be stopped. As the agent’s commission is very often paid after death of the owner, the next of kin may not even realise why the payment arises.
The Office of Fair Trading is aware and is, I understand “looking at the industry”. But it is taking a long time.
PIP FINUCANE, Bournemouth