Poor Student wrote:
How do EA's fees work? Do you pay them an initial fee to begin? Are there additional fees the longer a property stays on their books? Is commission 1 percent standard?
The EA receives a commission (0.75% to 2%) based upon the ultimate selling price (advertising costs are paid upfront).
Assume a house has as sales price of €200k and the EA agrees a commission of 1%.
Thus the EA receives €2k plus vat if the house sells for the asking price.
In the scenario that the EA achieves a much higher sales price, say €300k. He receives an additional €1k in fees plus vat but the vendor receives an additional €98.8k.
For the EA prospective (work involved) it makes very more sense to set asking prices low and to have a short sales cycle (and focus on acquiring new properties to sell). The fly in the ointment is that vendors want to max their net sales price.
Freakonomics has a chapter on US EAs' which makes very interesting reading.
BTW, in the US 5% commission is typical.