What would our real estate industry be like without seller-paid buyer agent commissions—the very thing the National Association of Realtors® (NAR) has been fighting to hold onto?

And what are some things we can learn from a top real estate agent in the UK? 

In this week’s BAM interview, #1 UK agent Matt Nicol joins Byron Lazine to discuss the biggest differences between the UK and U.S. real estate industries. 

Because things are changing in the American landscape—very quickly. And there are a lot of questions about what the future would look like.

Byron Lazine

Sitting down with Matt Nicol gave Byron a chance to get answers to a long list of questions on how the UK real estate industry operates and discuss parallels between that and where the industry may be headed in the U.S. 

Read on for some of the highlights. And watch the full interview to enjoy the whole conversation. 

#1—There is no buyer-side commission in the UK

The first question Byron asked Matt when they met was “What’s the number one question, as a top UK agent, that agents are asking you?” 

Consumers typically want to know, “How much will it cost me to work with an agent?” Agents, on the other hand, are more likely to ask, “What fees do you earn as a buyer’s agent?” 

Or, as Byron put it, “What is the buyer commission in the UK?

Matt’s answer: 

Nothing…There’s no buyer commission at all. We just get paid as the selling agent on behalf of the seller. So we don’t get anything and we have to do all the work with the buyer as well. So we are showing them around the properties, carrying out the viewings, feeding back to the [seller]. We have to do all of that.

Matt Nicol

Every homebuyer in the UK goes directly to the listing agent. There’s no MLS. Listing agents promote their own properties. 

So, the buyer has to come directly to us. So your team has to be big enough to be able to carry out all those viewings on behalf of your vendor whilst you’re obviously advertising all the other properties as well.

Matt Nicol

#2—The UK’s version of Zillow, et al

Rightmove runs the UK’s largest online real estate portal and property website, followed by Zoopla and OnTheMarket. Rightmove is also the most profitable real estate portal in the world. As Matt mentioned during the interview, OnTheMarket was recently acquired by CoStar for $100M. 

So I think CoStar are big over here and they’re going to spend $46 million over there now in the English version. But Rightmove is the portal that everyone will go on to. That’s where every agent will list. [It] costs us probably about 120,000 pounds a year to advertise on there.

Matt Nicol

That’s about $10K a month to advertise homes on Rightmove, a number Matt acknowledges without flinching. It’s the cost of running a successful real estate business in the UK, which is probably why (spoiler alert), the UK doesn’t really have part-time agents.

If you want to have the best branding, if you want to have the popups and all the landing homepage and all those bits and pieces or valuation inquiries to come through, you’d need to kind of be at the optimizer package.

Matt Nicol

#3—No 30-year fixed mortgages in the UK

That wasn’t really a question so much as a statement asking for confirmation, which Matt promptly provided. 

No. So, we do two-year, three-year, five-year, typically. I mean the term for mortgage is about 30 years—could be 25, could be 40. But it’s not “term” as you would know it… the fact that we have to go back in and remortgage every two to five years, you are obviously risking it that the rates could have changed and gone up and down. Whereas as I understand it, with you guys, you can tie into a 15-year fixed, but then you can refinance at different points if you want to….Which is incredible. That’s incredible.

Matt Nicol

#4—The typical agent commission rate in the UK—and other ways to monetize listings

The next few questions had to do with whether Matt and other UK agents have other ways to monetize their listings to add to their commission income. 

If you’re a listing agent [with] 400 listings a year, are you also doing any mortgage for these buyers that come to you?

Byron Lazine

So, we have independent brokers that will do the mortgage for the buyer if they want it, but they’ll just pay us a clip. They’ll just pay us a small amount as a referral fee….

Matt Nicol

At this point, Byron asked, “What’s the agent commission rate?” 

We would be around 1.5%, but in England, the fee’s probably between 0.75% to 1%.

Matt Nicol

Aside from a referral fee from the mortgage broker, there are additional ways UK agents can monetize transactions:

The solicitors that we recommend to people, we have three on our panel. So every buyer needs a solicitor, every seller needs a solicitor. We’ve got three that we can refer to. So we also make a referral fee from that as well.

Matt Nicol

#5—Running a real estate business in the UK

Byron called attention to Matt’s real estate business—starting with the 36 salaried employees he has on his staff, 18 of whom are sales agents. 

You’re what we would call a rainmaker. You’re going out doing the deals, making the connections. You’re bringing the 400 transactions in through the door—along with your marketing staff and all of that. But you’re going in on those pitches. Are you going on 400 pitches?

Byron Lazine

Me personally, no. No. So each office, we’ve got three brick-and-mortar offices, and each location has a valuation manager and typically a second member of staff that could also do the listing. Last year we went out to about 1800 valuation appointments… We sold about 540. 

But again, another eye-opener: it takes us 140 days on average in the UK to get a sale through. Ours take a hundred days, but because there’s no 3% at the beginning, there’s no money down at the start other than what you’re paying your solicitor to start the process. A buyer can withdraw from the transaction up until the exchange of contracts, which is really at the end once all the due diligence and everyone’s satisfied. So we would do 540 gross sales and probably net back to around 400 sales.

Matt Nicol

#6—No part-time agents in the UK?

One of the major differences that came up is the lack of part-time real estate agents in the UK—at least part-time as we know it in the U.S. 

Part-time is slightly different for us. They might work 40% of the week, but they would work every single week still doing 40%. But we don’t have part-time agents who really don’t do it at all, no…. I dunno how they’d do it without being able to use things like the portal. So if you’ve got Rightmove advertising accounts you’re going to need, it’s going to cost you a lot of money as well.

Matt Nicol

#7— “At the end of the day, we know the seller is [the one] paying us.”

As a listing agent, Matt has buyers going directly to him to make an offer on the home. And at the end of the day, it’s understood that he and his company work for the seller—the one paying for the services. 

That raises the question of whether Matt believes buyers are at a disadvantage in the UK. 

Underserved possibly. Because if you’re a first-time buyer, it’s your first time you’ve ever done any of this, you’ve really got no one to lean on. The agent will give trusted advice and they’ll be honest and they’ll support you. But you haven’t got someone who could say, look, I think that’s way too much money. You need to pay less than that. That’s not what we are here for. We are acting for our sellers anyway. 

So I would suggest, and I know obviously it’s the big thing that’s come in or being discussed at the moment over here in America, but there is a problem where buyers don’t really have as much support as they could if they were paying a fee for it.

Matt Nicol

#8—How do top UK agents generate listing opportunities?

After discussing the DOJ proposal to decouple commissions, Byron then asked Matt how he generates so many listings per year. 

We do a lot in our community. We do a market update that we deliver to 26,000 homes in each of the locations. We’ve got 26,000 properties that we kind of focus on….

I think if I was going to restart today, I think it would be a lot more on the social. I think you can do education pieces on the areas. Everyone wants to know what their house is worth. They want to know what’s going on in their market. So you can just do educational pieces on that. I probably would say community is still an important one. So the local school groups and stuff like that you can support and just putting yourself out and about. I think that’s probably part of it. Physical locations, some people don’t need bricks and mortar offices; they want to work from home. But I think having a physical presence is important on the High street because people do want to drop in and see you.

Matt Nicol

#9—How does the typical UK consumer view real estate agents?

BAM lead video producer Bobby Kawecki asked whether public perception of the job of an agent is different in the UK, especially for someone looking to get their real estate license. How does the typical UK consumer view real estate agents? 

I think people want to listen to us. I think they want to get the advice they would need to have the general uptake on what the market’s doing, and we try and provide that as well… It just helps people to make an educated decision when they want to go and make a move. Especially buyers who don’t have any representation, they do need that little bit of a ‘What’s going on with the market? Am I buying at the right time? Do I wait another month? Do I wait for four more months?’ You’ve got to support them on those.

Matt Nicol

Watch the full interview for more.