Understanding Property Sourcing Fees: A Guide by Asante Property Group Ltd

Profit is at the heart of property investment, and a skilled property sourcing agent can play a pivotal role in helping you secure the most profitable deals. But how can you ensure that the fees you’re paying are fair and aligned with the value you receive?

At Asante Property Group Ltd, we believe that informed investors are successful investors. In this article, we’ll delve into property sourcing fees, explore how they work, the factors influencing their cost, and provide you with tips for hiring the right sourcing agent. Let’s empower you to make decisions that support your property investment journey.

The Value of Property Sourcing Agents

Investing in property is much like buying a small business—it’s all about maximizing returns while controlling costs. A good property sourcing agent helps you do just that.

Think of property sourcing agents as consultants who specialize in identifying, negotiating, and securing profitable deals. They have local market expertise, access to off-market opportunities, and the negotiation skills to secure properties that align with your financial goals. However, while agents play a crucial role, it’s equally important for you, as the investor, to perform due diligence and ensure the deal aligns with your objectives. There is usually a fully refundable 14 day cooling off period in place which allows you to conduct your own investigations into a deal after you signed up for it.

What Are Property Sourcing Fees?

Property sourcing fees are the charges you pay for the services provided by sourcing agents.

There are three main fee structures:

1. Upfront Fees: Paid before the agent starts work, covering initial research and resources. Some agents offset these fees against success fees, while others don’t.

2. Success Fees: Typically calculated as a percentage of the property’s purchase price and payable upon deal completion.

3. Retainer Fees: Monthly payments for ongoing sourcing services, suitable for investors building larger portfolios.

Factors Influencing Property Sourcing Fees

Several factors impact the cost of property sourcing, including:

• Location: In high-demand areas like London or Manchester, fees are often higher due to greater competition and potential returns.

• Property Type: Complex deals, such as HMOs or properties requiring extensive refurbishment, generally cost more to source.

• Exclusivity: Off-market deals typically command higher fees because they are harder to find and more valuable.

• Market Demand: Fees may rise in competitive markets or decrease during slower periods.

• Agent Expertise: Experienced agents with a proven track record or specialized knowledge often charge premium fees.

Average Property Sourcing Fees in the UK

To help you benchmark, here are average property sourcing fees:

National Average

• Upfront Fees: £500–£2,000.

• Success Fees: 1%–3% of the property’s purchase price.

• Retainer Fees: £250–£1,000 per month.

How to Choose the Right Property Sourcing Agent

Selecting the right sourcing agent is crucial. At Asante Property Group Ltd, we’ve learned that an agent’s expertise can mean the difference between a profitable deal and a costly mistake. Here are 5 Do’s and Don’ts to consider:

5 Do’s When Hiring a Sourcing Agent

1. Check Their Track Record: Check their experience in property investing and/ or Sourcing.

2. Ensure the deals provided work for your criterias. Run your own due diligence to verify all the presented numbers. Use the 14 day cooling off period to do this and let the deal go if it doesn't work for you.

3. Understand Their Fee Structure: Make sure fees are transparent and aligned with your budget.

4. Look for experts. Ensure the sourcing agent has a deep knowledge of property strategies and fully understands the deals they are selling.

5. Request a Clear Contract: Ensure terms are documented to protect both parties.

Don’ts When Hiring a Sourcing Agent

1. Skip Due Diligence: Never rely solely on the agent’s word—verify the deal’s viability yourself.

2. Ignore Red Flags: Avoid agents who lack transparency.

3. Overpay: Research market rates to ensure fees are reasonable.

4. Choose Based on Marketing Alone: A strong online presence doesn’t always equate to expertise.

5. Neglect Communication: Poor communication can lead to misunderstandings—choose someone responsive.

Why Choose Asante Property Group Ltd?

At Asante Property Group Ltd, we offer unparalleled expertise in property sourcing. Here’s why investors trust us:

• Exclusive Deals: Most of our sourced properties are off-market, offering you opportunities unavailable to the general public.

• End-to-End Services: Beyond sourcing, we assist with renovation, tenant placement, and property management, ensuring a seamless experience.

• Transparency: We provide clear, upfront costs and detailed insights into every deal.

Partner with Asante Property Group Ltd

Property investment is a journey, and we’re here to support you every step of the way. From sourcing high-yield deals to managing your portfolio, Asante Property Group Ltd is committed to helping you maximize your returns.

Ready to take the next step in your property investment journey? Contact us today and let’s discuss how we can turn your goals into reality.