ASDA are expanding their financial services into estate agency. Find out how their service compares to others, and what we think about it.
"Right, I'm just popping to the supermarket to get me some toothpaste, a packet of Shreddies and a 2-bed maisonette with a nice view of the Tees." If one of the big supermarkets has its way, you may find yourself saying this in the not-too-distant future.
While, according to UK Business Directory,Tesco
(LSE: TSCO)
announces plans to increase its international selling space by 6 million square feet, ASDA is expanding another way: it's adding an estate agency service. The scheme is being trialled now in ten stores in the North East: Benton, Bishop Auckland, Boldon, Gateshead, Gosforth, Hartlepool, Middlesborough, South Shields, Stockton and Washington.
How it works
You go to one of the new computer terminals in the store. You can view properties there, and you can register your interest as a buyer or seller. You'll then be contacted by one of their agents, who'll arrange visits and viewings in the normal way. The three main points of note about this service are:
- ASDA estimates that up to 6,000 people are looking for a home at any one time in the trial area. If just 5% of them register with ASDA, that's 300 people. This might make it worthwhile for sellers.
- ASDA charges a flat commission rate of 1%.
- You get £1,000 of ASDA vouchers if your property sells...But you know what that means, don't you? It means you actually spend more, because you buy things you don't need - £5 off a £20 bottle of champagne - or things you don't want - 50p off a packet of Mini BabyBels. (Is it me or are they made of plastic? Given a choice, I'll eat the red wax wrapper.)
How it compares
Gimmicks aside, it could be a useful service. The 1% commission fee compares well enough with other agents. You can normally expect to pay 1-2% or even more if you use more than one agent.
However, as ASDA are presumably after volume, you may have difficulty negotiating the agent's slice. My father recently sold his house paying just 0.75% commission. He did this by agreeing a sliding scale. For example, you could say that the agent will get 0.75% if the property sells for the asking price of £400,000; they'll get 0.85% if it sells for £410,000; 0.95% for £415,000; and 1% for £420,000.
Of course, if you feel up to a bit more work, you could do even better than that by putting up a sign outside your home, and by advertising in local papers or online. You can sometimes advertise for free, as this article explains. On a £200,000 property this might save you a little under £2-£4,000 in fees. So, if you feel up to doing a bit of extra work, you might want to put ASDA property to one side. At least until they offer two-for-one deals.
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