What is an estate agent?

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The term estate agent is used to refer to somebody who is employed to sell, rent or manage property. There were three terms used thru the history- estate agent (For the person responsible for managing the landed estate), house agent (For the person responsible for letting or selling homes), and land agent (For the person who is responsible for land management).  During the 20th century those three terms were merged in one term- estate agent.
Nowadays estate agents bear fewer duties than those once employed to manage large country estate. Modern estate agents London usually work in companies which are selling or letting a range of properties in one particular area. After they’ve been approached by the owner of the property they start their campaign either to sell or to let the property to prospective buyers or tenants.

How do they make money?

Estate agents make their money by charging the seller of the property a percentage of the selling price as their fee. As you know the buyer is not paying the estate agent anything. The exact percentage of the fee varies between agencies but usually is 1.5-3 % of the value plus VAT. Because they charge a fee depending on the price that the property is sold for, it’s in their best interest to sell it for the highest possible price.
Estate agents who work in residential letting may charge the property owner in a different way, like if they are in charge for managing the property and collecting the payment from the tenants they might charge a commission on the rent for providing that kind of services. They can also charge the tenants for finding them a rental property. This is usually flat fee, ranging up to £250 which is described as an application or administration fee.