Moving home can be a costly experience. As well as your deposit, legal fees and any Stamp Duty that is due, you may also have to pay estate agent’s fees.
Estate agents’ fees can vary wildly depending on a range of factors. So, keep reading to find out what estate agents charge, why your location makes a difference and how you can cut the estate agency fees you pay.
What do estate agents charge?
Typically, if you use a high street agent the commission you will pay for selling your home will be a percentage of the sale price.
According to a survey in July 2018 by TheAdvisory, the average estate agent fee is 1.42% of the final selling price (including VAT). So, if you sell your home for £150,000, you can expect to pay around £2,130.
Following rules that came into effect in October 2016, your estate agency quote should always include VAT.
In reality, fees charged by estate agents vary significantly. Estate agents’ fees can start at less than 1% and rise to more than 3.5% based on several factors. Keep reading to find out what factors affect what you will pay.
Read our complete guide to choosing an estate agent.
What can affect the estate agency fee that I am charged?
- Whether you use one or more estate agents
If you sell your home through one estate agent, you enter into a ‘sole agency’ contract. This is the most common type of estate agent contract.
Sole agency means that your chosen agent alone has the right to sell your home during the term of the contract (typically around 12 weeks). A typical fee for a sole agency agreement is between 1% and 2% of the sale price.
Some vendors decide to list their property through more than one agent, but only the firm that sells your home is entitled to the commission. This is a ‘multi-agency’ agreement. As agents realise that they may do a lot of work without receiving a fee, a multi-agency agreement will normally come with a fee of between 2% and 3.5%.
- Whereabouts in the UK you are
Your estate agency fees will also depend on whereabouts in the UK you are. A recent survey from NetAnAgent found that the average fee charge by agents varied significantly between UK cities.
While the average fee was found to be 1.1%, the locations with the lowest fees were:
- Glasgow and Leicester – 0.84%
- Edinburgh – 0.89%
- Hull – 0.91%
- Bradford – 0.94%
- Liverpool & Bristol – 0.95%
Conversely, you will pay the highest fees if you live in:
- London – 1.70%
- Sunderland – 1.33%
- Manchester – 1.31%
- Birmingham – 1.25%
- Leeds – 1.18%
Alex Thorpe, CEO of NetAnAgent, says: “It’s no surprise that, over the last few years, traditional agents have increasingly brought fees down to compete with online and hybrid agents.
“However, we have seen that high street agents have continued to evolve their service to justify the extra fees with more focus on service along with an emphasis on helping to manage the entire process from marketing to completion.”
- Whether there is a minimum fee
While agents generally charge a percentage of the sale price, some estate agents will charge a minimum fee. This is particularly true if your home is cheaper.
For example, if your agent charges a 1% fee and your home sells for £70,000, rather than pay a fee of £700 you may pay a minimum fee of £900 to £1,300. This can significantly increase the effective rate of commission that you pay.
- Whether your estate agent is online or on the high street
The fee your estate agent charges will depend on whether they are an online agent or based on the high street.
Fees charged by online estate agents are generally lower than with a traditional agent, as you will often pay a fixed fee rather than a percentage of the sale price.
Bear in mind that while online estate agents may be cheaper, you may have to pay extra if you want floor plans or photography, or if you need them to show viewers around your property.
Can I negotiate the estate agent’s fee?
When you are selling a property, you should always get quotes from several estate agents before you choose one. You can take this opportunity to question them about the services they offer and what you will get for your money.
Estate agents operate in a competitive market and so you can often negotiate the fee that they charge. If you have been offered a cheaper deal elsewhere then ask your chosen agent whether they can match this fee.
As well as the cost you may also be able to negotiate other aspects of the contract, such as the notice or tie-in period.
Many agents are prepared to accept a sliding scale of commission. Here, you offer to pay an increased fee if they can achieve a higher sale price for your home. This incentive may appeal to some agents.
Why you shouldn’t choose an estate agent based on price alone
When you’re moving home, the cost of estate agents’ fees is clearly a factor to take into consideration. However, many experts argue that you should never choose an estate agent based on price alone.
There’s no point instructing a cheaper agent if they don’t sell your home. Always balance the quoted fee with the services the agent offers. Ask these questions:
- Are their front-of-house staff friendly and helpful?
- Are floor plans, a virtual tour, ‘for sale’ board and viewings included in the quoted fee?
- How professional is the agent?
- What guide price have they put on your property?
Read our complete guide to choosing an estate agent.