What does 'Pooled Commission' mean when buying a property?

Find out what Pooled Commission means when you are buying a property. 'What does Pooled Commission mean?' plus over 150 other property related terms and jargon in plain English

Pooled Commission

Estate Agents generally charge a fee for selling a property. The vendor pays the fee and it is commonly a percentage of the sale price.

Some estate agents work on a system where all the negotiators get paid an equal share of this fee regardless of which negotiator actually made the deal happen.

If you are selling such agents should be avoided as the negotiators have no incentive to compete with each other and so the price you achieve for the sale of your property is likely to be lower.

To learn all the lingo you will need to purchase a property the smart way pick up a copy of my ebook How to Really Buy a Property.

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How to Really Buy a Property

"... first step is to be sure that the staff are motivated to sell. For this reason avoid agents that operate a "pooled commission". In this situation the fee goes into a central pot and then a percentage of that is shared between every negotiator who works there, whether or not they were involved in that particular transaction. The result is that the moment one negotiator has interest in your property the other negotiators lay off, knowing they will get a percentage of the deal. To them this is a simpler option than coming out at eight in the evening with an alternative buyer even if they might offer you an extra five or ten thousand pounds. That alternative buyer may be desperate to buy your property and more financially sound but they will never be told about..."
"... commission paid to a negotiator not on pooled commission is usually between ten and twenty percent of the fee the agent is charging. As such negotiating a low fee is not always as clever as you might think. If you feel very pleased with yourself for having bargained with a dozen agents and finally found one you could twist down to 1% consider..."

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