How much should I be paying my estate agent?
Traditional ‘high-street’ estate agents usually calculate their commission fee based on a percentage of the price for which the property is sold.
Commission fees can vary based on various factors, such as whether or not you choose to list with a single agent or multiple agents. The commission percentage is usually somewhere between 1% and 4% (including vat).
Some agents may also charge a listing fee or marketing fee. It’s always worth checking if this initial charge is deducted from the commission at the end, or is an additional cost.
So-called ‘online agents’ tend to charge a flat rate fee, ranging from around £600 to about £2,000. They often also charge for added extras should you require them. Traditional estate agents may also offer a cehaper fixed fee service, payable in advance.
Estate agents are required to let you know their full fee INCLUDING VAT, as required by The Property Ombudsman.
Why not just select the cheapest agent?
It might be tempting to select an agent based on price alone.
Depending on the value of your home, an estate agent’s fee can seem like a lot of money. However, choosing the agent which offers the lowest fee will not always save you money – selecting the right agent carefully can actually end up saving you more money in the long run, regardless of their fees. A faster sale at a higher price can literally save you thousands.
It’s a good idea to invite around 3-4 agents to value your property and provide you with a quote. Check exactly what is included in their service and whether or not there are any added extras they charge for.
Questions to ask
Before you sign up with your estate agent, make sure you understand the terms which you are agreeing to. If there’s anything you don’t understand, are unsure of, or you feel unhappy with, you should seek to clarify this before you sign the paperwork.
Some specific questions you might want to ask could include:
- Can I use more than one agent?
- How long is the tie-in period? (This should be no longer than the estimated time to find a suitable buyer)
- If I wish to end the contract, how much notice am I required to give?
- If I manage to find a buyer privately, will any fees be due?
- Are there any extras I might be required to pay for?