Selling your House > Estate Agent Fees

Selling your house can be a great way to realise the value of what for many people is life’s biggest investment. However, selling your house is also one of life’s biggest stresses – and can be a time-consuming, expensive business. So estate agent fees are naturally top of mind for most sellers.

How much are estate agent fees?

Estate agents make a business of selling, managing and renting out properties. The term ‘estate agent’, strictly speaking, applies to those involved in the sale of property. If you’re looking to rent, then you’ll be speaking with a letting agent or management agent.

As with any business, estate agents can’t work for free. According to a survey by the house-selling website TheAdvisory in July 2018, the average estate agent fee was 1.42% (including VAT) of the final selling price. But the figure can vary anywhere from <1% to 3.5%. But on a bright note: as of October 2016, it is now compulsory to include VAT in quotes.

Types of charges

How much you get charged comes down to various factors, mostly dependent on what you as the seller want. Below is typical list of things covered by estate agent fees (though always ask, just to make sure you’re getting everything you feel is needed!)

  • Valuation – this is everything from researching the local market to looking at national trends, all of which gets refined into a report
  • Floor plans, measurements and photographs
  • Write-up on your property to attract potential buyers
  • The installation of a ‘For Sale’ sign
  • The organisation of viewings via telephone and online
  • Viewing costs
  • Marketing your property online and in print
  • Negotiation costs
  • Other business costs – this can be estate agency office rental, general advertisements, fleet cars

Why their price differs

You can go to two coffee shops and drink two differently priced cups of coffee. And the same is true of estate agents. Each runs on its own terms and has its own specialities. While online agencies are typically the cheapest, a high-street estate agent will still answer enquiries quickly and honestly.

Should you haggle?

Yes, as with anything. If you can haggle, you should. Selling your property is expensive to begin with, so even knocking 0.1% off that estate agency fee is going to save you money – and who’s going to moan about that?

Consumer body Which? recommends you invite 3 different estate agents to value your home. This doesn’t just give you 3 separate valuations, it gives you 3 different sets of estate agent fees. They also feature a number of questions you should think about asking the agent, such as:

  • How many similar properties have you sold, how much did you sell them for and how long did it take?
  • Where will you advertise my property, and will it include floor plans and pictures?
  • Which redress scheme do you belong to and for how long?
  • Are there any charges not included in the agent fees? If so, what are they?
  • Will you accompany buyers on all viewings and do you follow up with potential buyers after they’ve viewed the property?
  • Can I see a copy of your terms and conditions?

Being an estate agent is a competitive business, so you can usually negotiate a reduced fee or get more bang for you buck by getting an extra service or two thrown in. If there’s an agency you really like, tell them you found a cheaper deal with another agency and see if they’ll offer a reduced price.

If there’s an agent you prefer but they refuse to lower their fee, you can see if they will compromise by offering a sliding scale.

For instance, you could agree different rates of commission depending how much the agent gets for the property. Not only will they be more willing to consider this, it also gives them a great incentive to go for the best price as this will put more money into their pocket as well as yours.

Choosing the right estate agent

As part of the Which? 2017 National Property Survey, Which? spoke to home-movers selling property through estate agents.

The survey revealed that 12% of movers were dissatisfied with the services provided by their agent.

The best way to avoid ending up in this group is to ask a lot of questions up front. And, before signing a contract, read it and ask if you’re unsure or unhappy about something. It’s important that you understand your rights in the worst-case scenario that something goes wrong.

A few things to check when reading the contract:

  • If you’re unhappy with the service, how quickly could you get out of the contract and is there a fee?
  • Are you allowed to enlist more than one estate agent?
  • What happens if you find a buyer yourself?

If you’re still unsure or unhappy about anything, or if there’s something you still don’t understand, then don’t sign. It goes without saying that you should always read the small print! Remember that you can always go home and reread the contract, as well as seek independent advice before signing.

If you’re unsure in your choice of agent, you can compare local estate agencies using the comparison service GetAgent.

Estate agent fees remain the primary criterion in selecting an agent for your house move. However, as nice as saving money is, you want to ensure you get the best value for the money you spend. At the end of the day, a drawn-out sale, a lower price or no sale at all will hurt more than paying a bit more on commission.

Estate Agents: Glossary

To help you with some of the jargon used by estate agents, below is a list (with definitions) of some of the most common terms you’ll come across. If you see any other terms that you don’t understand, you can view more information in the Property Ombudsman’s glossary.

Fixed Fee

A set charge rather than a percentage of the final costs.

While you do have to pay this upfront, it’s usually cheaper and ensures you pay the same amount regardless of how quickly or slowly the property sells or for how much. Fixed fees are more common with online estate agents.

Multi-agency agreement

Instead of just one, you get several estate agents acting on your behalf. However, only the agent that sells your property receives commission.

Multi-agency agreements entail higher fees, usually between 2-3.5%. For the most part, it’s not the best way to spend your money, especially as most agencies these days will list your property on online portals like Rightmove.

Notice Period

This is the period of time – usually 2 weeks – between when you tell your estate agent you want to terminate the contract and when it actually terminates. Bear in mind that you may also have to factor in the tie-in period, if this applies (at the bottom of our list).

Open-ended agreements

As part of an open-ended agreement, an agent can claim commission if you sell to someone who the agent originally introduced to your property – even if this is months or years afterwards.

Ready, willing and able purchaser

A “ready, willing and able purchaser” clause stipulates that you must pay the agency for finding a buyer even if the sale falls through.

This can happen for many reasons out of your control. Personal circumstances may force you to take the property off the market or the seller could pull out, for instance. For this reason, The HomeOwners Alliance strongly recommends that you don’t sign this kind of contract.

Sole-agency agreement

Sole agency is the most common type of estate agent contract. This means that the estate agent is the only agent that can sell your property during the contract term. However, if you find a buyer yourself, then you don’t have to pay the estate agent fees. Typical estate agent fees for sole-agency agreements are in the range of 1-2%.

Sole-selling agreement

Like the sole-agency agreement, sole-selling also means that the estate agent is the only agent that can sell your property during the contract terms. However, there is a key difference. If you find a buyer, the estate agent is entitled to charge estate agent fees, typically between 1-2%. If this is in the contract clause, it is not recommended to sign.

Tie-in period

This is the period you are tied into the contract for from the date you first sign. If you change estate agents within the tie-in period, you are still liable to pay fees to the original agent. Typical tie-in periods are six weeks, after which you are only liable for extent of your notice period (usually 2 weeks).

Your rights with estate agents

Legally, estate agents must use clear terms in their contracts. They must also:

  • tell you about all offers in clear writing
  • reveal any personal or financial interest offers they have received on your property
  • keep these records for 6 years
  • be a member of The Property Ombudsman, The Property Redress Scheme or Centre for Effective Dispute Resolution (CEDR)

If you suspect that an estate agent is in breach of regulations, you should complain to the estate agent first. If you are not satisfied with their resolution, or 8 weeks after the original complaint date, you can refer it to The Property Ombudsman, The Property Redress Scheme or CEDR, depending which scheme the estate agent is registered on.

Additionally, it’s advisable to keep detailed records of all dealings with your estate agents, in case any problems arise. This is why it’s best to operate on the basis of emails. This ensures there’s a paper trail to act as evidence of any issues that may arise.

Can you avoid estate agent fees?

Unfortunately, for the buyer, you cannot avoid estate agent fees. However, bear in mind that the UK has the cheapest estate agent fees in the world, and that these have been decreasing every year.

The only way to avoid estate agent fees is to do the work yourself. But, unless you’re skilled in this field, you may compromise your final sale price. And this will likely represent a bigger loss than the saving you make not enlisting a professional estate agent.

Besides that, your other option is of course to negotiate. While you can’t eliminate estate agent fees entirely, you can still try for a compromise or a reduction. Or, alternatively, you could consider using an online estate agency instead, which generally operate with lower fees.

Estate Agent Fees in Scotland

In Scotland, things work a little differently. The laws in Scotland allow for many solicitors to also act as estate agents. This way, the act of marketing your property goes together with the all legal work.

This said, there shouldn’t be any major differences in estate agent fees. The same work gets done, you just have to deal with one person instead of two.

In England and Wales, the laws differ. The roles of estate agents on the one hand and of solicitors and conveyancers on the other are clearly separate.

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