Most house sales involve an estate agent.
This professional is responsible for:
- Marketing the property
- Finding a buyer
- Getting both parties to agree a price.
Needless to say, estate agents charge a fee for this service.
So, how much is it? And are there ways to keep this cost down?
Let’s find out.
How much are estate agent fees?
In the UK, a typical estate agent charges a 1.5% commission on the final sale price.
This means that the cost rises for more expensive properties. And it’s on the lower end for the most affordable houses.
For example, if your house sells for £200,000, a typical estate agent charges £3,000.
This rises to £7,500 for a property valued at £500,000. And if your house is worth £1 million, the estate agent fee goes up to £15,000 on average.
Almost all estate agents charge in this way. A 1% commission rate is considered on the ‘low end’. Meanwhile, on the higher end, you’ll find some estate agents charging 3% or more.
A few estate agents charge a flat rate, although this is rare. You should always clarify the commission rate before you agree to work with them.
There may also be additional fees for extra services. Once again, clarify this with your estate agent before you sign a contract.
Don’t forget that it’s not always in your interest to choose an estate agent with the lowest rate. Sometimes, a higher rate translates into a better service, and vice versa.
What estate agent fees include
Most estate agents in the UK offer the same services. This is covered as part of the commission rate they charge.
Just make sure to confirm this before you sign a contract. Otherwise, you could get a nasty surprise.
Valuation
An accurate valuation by an estate agent helps to ensure that you set the right selling price.
Their knowledge of the local market, and similar properties, will help with this.
It may be worth getting a few no-obligation opinions, as each estate agent could have a different view.
Marketing
This is a crucial component. Estate agents will market your property so that it is visible to potential buyers.
This includes listing on popular online property portals, such as Rightmove and Zoopla. It should also get visibility on their website.
And local magazines could also be used, along with social media. Your estate agent will explain the methods they plan to use.
Part of this includes excellent photography, and well-written descriptions of the house.
Viewings
Agents handle the scheduling and management of these viewings.
They know how to focus on the perks of your property. This can result in a bidding war, or higher offers from the viewers.
Estate agents can also encourage people from their network to attend viewings. This can source a buyer.
Negotiation and sales management
Estate agents help negotiate sale prices and terms with potential buyers.
They work to achieve the best possible price and terms for you. You may feel happy getting someone else to do this, as it can be stressful.
Once a sale is agreed, they also manage the process. This includes collaborating with solicitors and others.
Communication and advice
A great estate agent will keep you informed and provide advice on any offers received. Their expertise ensures you never feel overwhelmed.
But not all estate agents offer the same level and quality of service. Some may have years of experience, while others could be new to the market.
So, when comparing fees, consider the range and quality of services included. This guarantees you’re making a like-for-like comparison.
Are estate agent fees open to negotiation?
In most cases, yes. Lots of estate agencies are open to this.
You may find some companies that have a ‘no negotiation’ policy. You should probe to find out the reasons for this, and what the number is fixed at.
How can you keep estate agent fees down?
You aren’t completely powerless to the rate than an estate agent charges. There are a few things you can do to push the price down!
Speak to several professionals before deciding
Most estate agents will speak to you without obligation.
This means that you can find out their commission rate, and the potential valuation of your house.
A broader sense of the market ensures that you don’t pick the most expensive estate agent.
You can understand everything on offer and then choose the best one.
Negotiate on the commission rate
Many estate agents are open to negotiation. And there are a few different ways you can do this.
For example, you could offer to do some of the steps yourself.
This might include photography or marketing. Especially if you have expertise in these areas.
You could also offer to sign a sole agency contract. This ties you into the estate agent for a longer period, and you can’t use anyone else.
Use another sales channel
Don’t forget that using an estate agent is not the only option available to you.
Cash buying companies often don’t charge a fee, and auctioneers tend to be less expensive, as well. Selling privately, meanwhile, is another way to avoid this cost.
You should explore these avenues if you’re especially keen to keep prices down.
Do estate agents have hidden fees
Some estate agencies do. These tend to be the less trustworthy companies.
Check their online reviews to see if past customers have complained about this.
And then read the contract extremely carefully, perhaps with an estate agent, before you sign it.
Who pays estate agent fees?
The person selling the property pays the estate agent fees.
This comes out of the house sale proceeds. The buyer does not pay the estate agent.
When are estate agent fees paid?
Estate agent fees are usually paid upon the completion of the sale of the property.
It’s also common for the fee to be deducted from the sale proceeds at the point of completion.
This means that the fee is settled before the proceeds are transferred to you.
