Estate Agent Fees

A Real Estate Agent Giving a House Tour to a Couple

Thinking of selling your home? For many, estate agent fees are one of the costliest fees you’ll pay for the sale of your home, and you don’t have to pay what you think you do. What should you do to pay less?

Get Information:
The single best thing you can do for yourself is to learn more about what an estate agent’s fee in your area might currently be. There are a few things to know here.

  • When most people prepare to sell a home in the UK, they choose to work with an estate agent, and for good reason. Studies have shown that estate agents often sell a house more than you could use other methods far faster.
  • Because estate agents provide such a valuable service, they charge a fee in return for those services. Those fees typically range from 0.9% on the total selling price of your home to 3.6%.
  • Estate agent fees can vary from agent to agent. They can vary in other ways, too, like from region to region.

Know the Different Fee Schedules:
If you use an estate agent, there are a few ways to save, and one of the most common is to know the fee schedules of agents in a traditional sense.

  • Sole agency contracts tend to be the cheapest, but they mean you only have one agent working for you at a time.
  • Joint agency contracts are a bit higher, but you can often get national exposure for your home.
  • Contracts with multiple agencies are the way to go if you want to save serious money on fees, but they are also the costliest.

Estate agent fees can easily eat into your profits.

Commonly Asked Questions

What do most people want to know as they explore the true cost of hiring an estate agent to market their property? Take a look at these commonly asked questions.

What Do Estate Agent Fees for Selling a House Include?

Estate agents generally offer a fairly powerful menu of services, and that’s one of the reasons so many people turn to them again and again. At least initially, they’ll give you a solid valuation of their property. While you shouldn’t trust this one single marker of how much your property is worth, it is a good idea to listen because it should be at least in the general vein of how much your property might be worth. More than that, though, estate agents offer you some incredibly valuable marketing tools. They’ll create a well-written description of your property for web viewers and others to help people understand the many different benefits your property has to offer. They’ll also usually draw up floorplans of your property to help attract potential buyers to your home. Maybe one of the most important marketing functions they provide, though, is the fact that they’ll schedule a time to take professional photographs of your home. These photos are often what sells your home. Nearly 72% of estate agents have suggested high-quality professional photos help them sell a property more than any other tool, so this is important. These photos will be posted both online and used in the paper marketing material that is printed about your home, so they highlight just how beautiful your home is.

In addition to taking those steps, estate agents take other steps as well. They will usually put up a “For Sale” signboard in your yard, and they’ll reach out to people they consider to be potential buyers whom they’re regularly in contact with already. They’ll also list your home online with sites potential buyers look at on a regular basis like Rightmove, Zoopla, and On the Market. Additionally, they’ll work to organise viewings and manage those viewings once they get them booked. Typically, they’ll contact you once a viewing is scheduled, then meet the buyer at your home. They’ll show them around your home, highlighting the key features of your house from room to room. Should any potential buyer make an offer, your estate agent will work with them to negotiate that offer and get you the best possible deal.

It’s important to note that these services aren’t true for every agent, particularly if you choose to work with an online agent. Before you sign a contract, you’ll certainly want to ask your agent which of these services are available.

Why Do Estate Agent Fees for Selling a House Vary?

There are several reasons the fees you might pay vary from agent to agent. Often, they depend ultimately on the value of your property and where it’s located. They can also vary based on a few other factors, though. For example, the type of contract you choose with your agent can make them vary extensively. A sole agency contract is the most common type, and it means you pay lower commission fees. In this situation, only a single estate agent has the right to sell your home while you’re under a contract with them. A joint sole agency agreement allows you to appoint two different agents, and the commission fee goes up a bit with this type of contract. They decide in advance how to share the commission. This type of agreement is fairly common when you appoint a national agent and a local agent, as two local agents competing against each other simply doesn’t work well. The final type of contract is a multi-agency contract, and in this situation, you can appoint as many agents as you like with the goal of reaching more potential buyers. You will pay far higher fees in this kind of setting, though.

Agency fees may also vary depending on the type of agent you use. Online agents do far less work to sell your home, but they can be a good idea if you don’t want to pay high estate agent fees. Working with a well-known agent, though, may mean more exposure for your home, but higher overall fees, too.

Are Estate Agent Fees for Selling a House to UK Buyers Higher?

The fee you pay to your estate agent does not change whether you’re selling to a buyer in the UK or to a buyer on an international stage. You will sign a contract with your estate agent early in the process to determine the fees you will pay. No matter who ends up buying the house or where they’re located, your listed fees will be those on your contract.

How Can You Save on an Estate Agent’s Fees for Selling a House?

Given how much estate agent fees for selling can be, you may be looking for ways to save on those fees. There are a few ways to do it. Many will suggest that you negotiate the agent fees, and that’s a great way to pay less. While very few people enjoy the process of haggling for fees, if the market is tight, most agents are willing to work with you to get your fees down. There are other ways to save on estate agent fees, though. You can typically work through an online agent to save on fees. Online estate agents are those who offer far more basic services. They’ve become quite popular in recent years, and they’re commonly used by individuals who have properties that are worth less than £200,000. These kinds of agents typically charge a fairly small fixed fee, so you won’t have to pay a commission. Often, though, that fixed fee comes at a price because they don’t typically handle viewings or even all of the marketing. It’s a more flexible approach that works well for many.

One final option is not to use an estate agent at all to market your property. There are a few different ways in which this could work. First, you could sell your property on your own. Sometimes called a private property sale, the benefit here is that you maximise your overall profits in this process. You also get full control over your listing, so you can decide on the best price and you have the opportunity to reach out to potential buyers in any way you see fit. More than that, though, you are completely in charge of your negotiations. The downside here, though, is that there’s quite a bit of work involved with actually selling a property, and as a result, that could mean some long hours and frustrating paperwork on your part.

Aside from selling your home that way, you could also sell to a cash buyer. There are many different home investment companies available these days, and often connecting with them is as simple as making a phone call. They typically valuate your house within two days, then they can complete a sale in under two weeks. Keep in mind, though, that with this type of sale, you’re less likely to get market value out of your home than you would with other kinds of sales.

One final option is to sell your home at a property auction. You will have to pay the auction company for their time, and you may not get full market value out of your home, but you don’t have to pay an estate agent’s fee, either.

Should I Compare Estate Agent Fees for Selling a House?

If you plan to work with an estate agent, the single best thing you can do is to compare estate agent fees. Choosing the cheapest option isn’t a good idea because you may end up with a low-performing agent. However, comparing fees can help you make certain that you don’t pay more than you should. To do so, choose three top-performing agents in your area, then ask them to take a closer look at your home. Ask what their fees might be for a sole agency contract in light of the numbers they come up with. You’re likely to get three different answers, and that can help you decide how to best move forward with an estate agent. This process can also help you learn the average estate agent fees for selling in your area. Estate agent fees are at least partially decided by the location of your home, and comparing a few different agency prices may help you determine what’s truly reasonable given the area in which you’re selling your home.

How Much Are Estate Agent Fees for Selling in Non-Traditional Home Sales?

If you’re selling your home to a cash buyer with whom you’ve already connected, you don’t have to pay an estate agent fee. Similarly, you won’t need to pay one if you choose to work with a friend or family member in your home sale. You will only ever have to pay estate agent fees when you sell your home with an estate agent.

There are some non-traditional estate agent arrangements, though. Typically, online estate agents are the ones who offer these kinds of arrangements these days. While these kinds of estate agents aren’t very popular yet – a Twentyci study found they handle just 7% of home sales in the UK – they usually charge a much lower fee than traditional estate agents. Most people pay under £1000 to take advantage of their services. Those services, though, don’t always include what you might expect. For example, most online agents will arrange a viewing for you, but they won’t be present to help with the viewing. What they will do, though, is offer you much of the marketing materials you need to get your home on the market. In some cases, you’ll even find no sale-no fee packages from these agents, so if your home doesn’t sell, you won’t have to pay them anything.

How Do You Know if Your Estate Agent Fees are Too Much?

It’s hard to know if your estate agent is charging you too much if you haven’t talked to other estate agents in your area about what they might charge you. Keep in mind that your home may be a fairly difficult one to market, thus the estate agent fees would be quite high in your particular situation. That’s why it’s always best to talk to at least three different estate agents before you sign a contract with one of them. By speaking with three different agents, you get a sense of what it should cost you to work with an estate agent. You may even better be able to negotiate the fee structure, as, at that point, you can reference the fact that you’ve spoken with other estate agents, and they’re willing to charge you less.

Does a Buyer Pay Estate Agent Fees?

In the UK real estate market, the buyer never actually pays any estate agent fees. While they tend to use the same agents sellers do and they take up much of an estate agent’s time, the seller is the one who ultimately bears the brunt of paying those estate agent fees. This, however, is not true in every other country, so should you ever choose to buy a property outside of the UK, you may find that the estate agent fees there are quite high for potential buyers.

What is VAT When Using an Estate Agent?

Many people look at the commission price of the estate agent and believe that is the only cost they’ll end up paying in the transaction. Unfortunately, though, that’s just not the case. You must pay that fee in addition to VAT costs. There are three different VAT rates in the UK, and they all apply to the goods and services being sold and how they’re used. Some are zero-rated goods and services, but unfortunately, estate agents are not classified as zero-rated. Instead, they fall under the standard rate of 20% VAT. The way this works when you sell your home with an estate agent is like this. If you sell your home for £275,000, and you’ve signed a contract at the average estate agency fee of 1.18%, you’ll end up paying £3,905 by the time you both pay the estate agent and the VAT on his or her services. It can get quite costly in the end, but if you have a higher-value property, you’re certainly going to see the power of working with an estate agent to make the sale.

Are There Hidden Estate Agent Costs?

Before you sign any contract to have an estate agent sell your home, you may want to check to be sure there are no hidden costs you’re likely to have to pay. These are sometimes called added extras. While estate agents are required to tell you what is and is not included in their fees, they aren’t always as upfront about what’s covered as one might like. If this is the first time you’ve ever tried to sell your home, it’s worth it to check to see what is included in their services. Most estate agents will offer you free photos, advertising, and marketing. However, you may be asked for a fee at the outset to help cover those. It’s important to note that there should be no fee to cover those costs. Additionally, you shouldn’t have to pay some kind of withdrawal fee if you choose not to sell your home. While you may pay a fee if you walk away and work with a different estate agent, if you simply decide that selling your home isn’t the path you want to go down any longer, there should be no additional fees from your agent. You’ll also want to watch out for the service professionals your estate agent recommends. While these aren’t necessarily bad service professionals, it’s likely your estate agent already has a contract on file with them, so they’re getting a commission fee of their own just for sending you to those professionals. For example, your estate agent may recommend a particular conveyancer or something like that. In those cases, you’ll want to do your research and decide on the best professional to meet your needs. Good estate agents will let you work with any professional.

Will My Estate Agent Get My EPC for Me?

As you’re probably already aware, to sell your home in the UK, you need an Energy Performance Certificate or an EPC. The cost of these is fairly nominal – between £60 and £120 usually – but you cannot sell your house until you’ve already obtained one. Fortunately, if your house has been part of a real estate transaction in the last ten years, you may not need one. If, however, you have owned your house for some time, you must commission one before your estate agent can put the property on the market. Your estate agent may be able to suggest some service professionals who help, but they cannot get the certification for you. Instead, that’s a task you’ll actually have to tackle on your own.

When Do You Pay an Estate Agent?

In most situations, you will pay an estate agent when you’ve completed the sale of your home. It’s important to note that there are contracts you might sign with an estate agent that require payment far sooner, so it’s essential that you check with your agent to better understand when payment might be expected. In most cases, your estate agent will tell you that payment isn’t required until you have money in the bank. This isn’t the case with online estate agents, though. Their fees are far lower, and you typically pay them when you sign a contract with them. Most of those contracts, though, have a no-sale, no-fee clause, so if for some reason your home doesn’t end up selling, you can simply go back to them later and discuss how to best get your money back.

What If I Want to Fire My Estate Agent?

If you and your estate agent simply aren’t getting along, it’s best to try dispute resolution services like the Property Ombudsman before you simply fire them. If you sell your home on your own and you’re under a contract with an estate agent, you could end up paying them anyway. If you decide to stop using your estate agent, ensure that the contract the two of you had together has been fully nullified before you move forward with another agent or even before you try to sell again in another manner. You can prevent this problem by talking to multiple estate agents and talking to others who have used the estate agent you are considering in the past. You want to make certain that you are working with a reputable professional.

How Do I Find an Estate Agent?

There are many different ways to connect with an estate agent who can help. One of the single best ways to connect with a reputable agent is to talk to friends, family members, and colleagues who have used estate agents in the past year and get recommendations on what worked with them. Beyond that, you can use several different review websites to get some sense of which estate agents are truly worth the money you’ll pay and which ones you may want to walk away from before you sign the contract.

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