Estate agents’ fees vary regionally across the UK, and the amount estate agents charge is often dependent on whether they act for you as the sole agent or whether you have chosen to use several agents at the same time to sell your property. You will usually be offered a more competitive fee if you agree sole agency terms with one agent.
Most estate agents charge a percentage fee based on the price they sell your property for, and this can be anywhere between 1% and 3.5%.
A survey for carried out by consumer champion Which? found the average fee nationally was 1.8% plus vat.
The commission fee should include preparing your property for sale (photographs and floor-plans), creating a compelling description, advertising on the main UK websites such as Rightmove and Zoopla along with the fitting of a ‘for sale’ board.
Some agents still advertise in off-line media, though it has become much more ineffective these days.
The agent should carry out the duties necessary to secure the best ‘willing and able’ buyer to pay the best price for your property and in the time frame that suits your circumstances and also offer post sale administrative services, which may involve communicating with Solicitors and other agents to help you reach a speedy conclusion.
Always meet with several estate agents, and ask what their fees are for a sole agency agreement, and if there will be any other costs you will be expected to pay.
And always carefully read the contract and take advice if there are any elements you do not understand.
Haggle for a low estate agent fee
So what can you do to ensure you get a better deal?
You can haggle, but many agents in high streets popular areas tend to be of the larger ‘chain’ variety and they are unlikely to be particularly flexible about their fees. But you should still try to haggle all the same.
We think a much better idea is to pitch the agent based on how they actually perform for you. A fee based on results, how novel.
You might think you’ve done great by ‘talking’ an agent into a much lower fee, but looking at it from a commercial view-point, they won’t be especially happy with low fee – so how can you be sure they are giving you anywhere near 100% effort to actually sell your property for the best price? The truth is, you simply can’t be sure. Heck too many people aren’t even sure their agent is really working for them when paying a full fee!
Sure, it’s easy to assume you’ll get total commitment because their fee increases with a higher sale price, but if you have agreed a 1% fee with an agent a difference of £20,000 although being huge to you, is worth just £200 in extra commission for the agency and just £20 for the sales person who actually sells your property. Does that sound like a sum of money to really drive someone into ‘over-perform’ mode to you?
So why not offer the agent a fantastic fee? A huge, appetitive whetting fee that will guarantee they work super hard for you. But, and here’s the caveat – only if they prove they have performed well enough to warrant such a fee.
A sliding fee scale might not be an acceptable proposition to many agents, and you can read between lines for the reasons as to why some might baulk at the idea.
However you will find some agents that will relish the challenge to work hard, earn a great fee and likely a recommendation or two on the back of a sterling job done.
An example might be: (assuming you have had several agents visit and value your property at a similar amount, for example £450,000).
A 1% fee if they sell your home for under £440,000
A 1.25% fee if they sell it between £440,000 and £450,000
A 1.5% fee if they sell it between £450,000 and £460,000
A 1.75% fee if they sell it for over £460,000
A 2 % fee if they sell for £470,000 or more.
You could suggest the sliding scale if you think an agent is insisting on a fee you think is unjustifiably high, wants a very long contract or you think your property will attract a good amount of potential buyers due to the type of property it is (or the popularity of your location).
This approach will coerce the agent into working much harder for you because they want to achieve the higher commission fee, however at the same time you are happy as you agree a sale for a great price – and nobody really minds paying a good fee for a job well done.
You’ll know 100% that both you and your agent’s goals are completely aligned.
Lower cost selling options (Online estate agents)
If you still feel you are paying too much for an estate agent, you can always try an online estate agent for a fraction of the cost – and some charge fees of just a few hundred pounds.
However you will need to write your property description, show buyers around and negotiate offers as well as progress your sale to a successful conclusion.
Unless you are a trained sales person, able to effectively manage objection handling, it’s unlikely you’ll do as good a job as an agent would at this vital part of the sale process.
The traditional agent is also distanced from the negotiation with a buyer and you might find the process of back-and-forth negotiating a bit tense and emotionally driven, and this could easily result in a sale below the true worth of your property.
Experienced agents are also well prepared for the various types of issues that can arise during the sales process, and deal with many different solicitors (with varying personalities!) and many Companies have a dedicated team to deal with this part of the property selling process. This experience can be invaluable to conclude a sale swiftly and without stress. Almost 30% of sales break down which is stressful, time-consuming and ultimately costly.
But, cheaper is rarely best. You may have to weight up the money you save on the fee against the fact you may have sold your property for much more with a more traditional agent.
Some recent examples of where we ‘earned’ our fee
Sometime estate agents have to pull out ‘all the stops’ to earn their fee, and here are some great examples where we think a good fee was more than justified
A house in SE6 that was valued by several agents at £250,000 because of the stamp duty threshold and a sale agreed at £259,00
A flat in SE14 that was valued by the bank at £350,000 and a sale negotiated at £363,000
A house in SE6 that was valued by the bank at £450,000 and a sale agreed at £500,000.
A flat in SE19 that was valued bank much lower than the sale price by the bank and yet the buyer was encouraged to change lender not once, but twice leading to a successful sale at the agreed price.
A flat in SW11 where the first buyer pulled out due to the bank valuing the property lower than the agreed price, and after a bids situation on the subsequent re-marketing was sold for £40,000 more than the original bank valuation.
If you want a quick sale, price low and almost any agent will do a job for you.
If you want the best sale price, then perhaps think of a creative strategy to pitch to an agent to assure yourself that will get their best efforts to get the result that works best for you – and not the other way around.
If you achieve this, the fee you pay the agent won’t really be much of an issue anymore.