Estate agency fees are significant. If you’re selling your home, you’ll no doubt be shopping around to find the best deal for your property.
However, that doesn’t mean the lowest price is the best. Each agency offers different services, incentives and levels of experience. Agents who charge the same fees may be better or worse in value.
Keep reading to find out all you need to know about fees: from the types of service offered, to average fees and price negotiation. That way, you’ll be prepared when you call up your local estate agent.
How much are estate agent fees?
It’s fair to say that estate agent fees vary significantly. However, it is possible to provide some average figures for the UK.
Estate agent fees for selling a property
Fees tend range from 0.9% to 3.6% – before any negotiation, and assuming you use only one agent. This can be broken down further into three different types of payment:
- Single agency contract – This is when you use one agent to sell your home. Including VAT, they charge a percentage between 1.2-1.8%
- Multiple agency contract – This is when you agree to use several agencies to sell your property. In this case, fees tend to exceed 3% including VAT.
- Fixed-rate cost – this is common amongst online agents. They sometimes charge a flat fee, often between £1,000-1,500, rather than offering a percentage fee.
Currently, the average estate agency fee to pay in the UK is 1.42%. So, say you sell an average property in Manchester for £298,085. You would pay about £4,232 in fees to your agent.
As you might expect, estate agents will try to charge you the highest percentage they can get away with. For that reason, you should be prepared to haggle the price down and negotiate.
Estate agent fees in London vs elsewhere in the UK
You may pay higher fees if you’re selling a property in London, though this isn’t always the case. The higher fees are primarily due to higher prices in the capital than elsewhere. If you live in London, you’ll undoubtedly be used to this. However, if you live elsewhere in the UK and plan to sell (e.g.) an inherited property – you may be caught out by the fees.
Even if the fee percentage isn’t higher, the inflated property prices in London will mean you pay more to your agent anyway.
That said, if you use an online estate agent to sell your property, you could sidestep some of these high fees. Many online agents offer fixed prices for selling your property, which you can use to your advantage.
Do estate agent fees include VAT?
It’s critical to check this, because some agents mention this separately. Before you go with an agent, they should clarify this to you, and it is usually advertised on their websites. If you don’t, you might be hit with a price that is 20% higher than you expected!
In fact, you’ll have the right to complain to the Property Ombudsman if these charges are not clearly displayed and communicated.
Are there any hidden costs?
While costs should always be clearly shown, you’ll have to double-check what is included in the price. At the same time, it’s also good to see whether any admin fees or registration costs are involved and avoid these if possible. You should also avoid any agent who charges withdrawal fees – almost all agents work on a ‘no sale, no fee’ basis.
What do estate agent fees usually include?
It’s essential to explore what your estate agent’s fee includes. Be sure to shop around for agents who charge the same fees, but include more services or have a better track record. Even so, there are a range of services which estate agents normally include:
- Valuations – An in-person property valuation is one of the most important services. Virtually all estate agents include this, except some online ones.
- Property portal marketing – Agents will nearly always put up a profile of your property on popular sites like Zoopla, On The Market and Rightmove.
- Conducting viewings – Your agent will generally conduct any viewings of your home personally, and in such a way as to sell it effectively to viewers.
- Sales negotiation – It’s critical for your agent to negotiate with buyers to sell the property for the highest price possible.
- Property blurb – Estate agents tend to do a write-up of your property, describing its standout features and why someone should buy it. This is then used for marketing purposes.
- Floorplans – Similarly, estate agents usually produce floorplans of your property to help potential buyers understand the home interior and space.
- Photography – Many estate agents include professional photography services for your home. This ensures your home is ready to market with its ‘best foot forward’.
- For sale boards – It’s standard practice for estate agents to erect a ‘for sale’ board outside your home, attracting passers-by.
- Consulting a buyers list – Many estate agents will have a list of potential buyers to hand already for different types of property. They will contact these buyers on your behalf and make them aware of your property.
All that said, there is flexibility when it comes to services. The most significant difference is with online agents, because they usually take a more hands-off approach and may, for example, not conduct viewings.
Why compare estate agent fees?
You should always compare fees, and measure them against various factors – including track record, services included and customer support.
In other words, it may be tempting to go for the agent with the lowest price, but you can’t be sure they’ll deliver value. At the same time, a higher cost doesn’t mean the agent will achieve better results. Whatever decision you make, remember that you’re investing money and not just spending it. Suppose an agent offers a much better service for a higher price. In that case, they are likelier to sell your property for a higher price, so it’s likely worth the extra cost.
Let’s return to the earlier example. Say the sale price of your property is £298,085 and you pay your agent £4,232 in fees (1.42%). But imagine if another agent managed to sell the same property for £350,000 at a 2.5% fee (£8,750). You may have paid nearly double the fees, but the extra profit on your home sale would be entirely worth it overall.
Can I negotiate estate agent fees?
Negotiating with an estate agent may seem daunting, but it’s an important way to save money. It’s also encouraging to remember that many local estate agents want (and need) your business, so most are up for negotiating prices. Here is a procedure you can follow to negotiate prices effectively:
1 Get multiple valuations
The more valuations you get from different agents, the better idea you’ll get of the going rate for prices and your property value. It’s advisable to get at least three other valuations from different types of agencies too (small, large, local, national). You should aim to negotiate to around 1.2% in fees.
Finally, make sure you let each agent know that your property is being valued by other agents.
2 Get expensive agents to lower prices
You’ll have a spread of different quotes by this point. Contact the most expensive agents, and let them know that the other agents are offering lower prices.
Be specific with the fees they quote, and tell them your aim is to only pay 1.2% in fees. If you plan to sell an especially high-value property, you should be confident to lower the percentage even more.
3 Negotiate with smaller agents
If you’re trying to haggle with a national estate agency, you might not be able to haggle at all. They often work under national policies which are binding for their agents, and may not allow negotiation below a certain point.
On the other hand, many high street agents are eager to win your business, and are willing to negotiate fees more readily.
4 Negotiate with new agents
If you’ve approached a new estate agency or one which is trying to expand into a new area – it’s time to negotiate. You can leverage their lack of experience to reduce their fees. They will want to expand their influence, and if they’re a new business, will be very keen to gain happy customers who will give them a good review.
Estate agent fees calculator
If you’re looking for an easy way to compare estate agent fees, then an online calculator can help. Various providers offer a fee calculator, which compares the prices of multiple agents to give you an idea of what you might pay.
Some online agents offer a way to calculate their own fees across different property prices. Other calculators like this one let you compare across many different agents in the UK.
These useful tools warn you how much you might pay and how much you could save by choosing another agent.
And finally
At the end of the day, you want to find the service which offers the best value. This might mean saying ‘no’ to persuasively low prices that promise a quick sale. It might mean haggling down an overpriced agent so their fees match their service.
Remember, your home is your most valuable asset, so you’ll want an agent who knows how to sell it for what it’s worth.
