How expensive are real estate agents? Property Industry Eye reveals the average estate agent commission in 2020 so far
Selling your house on the open market is NEVER as simple as it sounds, especially if speed is off the essence. You can prepack all your belongings, invest hundreds in property marketing and pedantically prepare for every viewing, but that’s all useless if your agent doesn’t get the right people through your door – i.e. the entire reason why you pay an estate agent commission.
You should expect a lot from an agent – and by a lot we mean A LOT. Estate agent fees aren’t cheap in any sense of the word, so you must ensure that you’re receiving value in return. Fail to do so and you could have your buyer pulling out before exchange, or at the very least having to change estate agents, which these days can be a costly process.
And as you’d imagine, with the recent 'mini boom’ triggering a surge in property purchases from all corners of the UK housing market, estate agent commission is becoming an increasingly hot topic amongst sellers. So, with Property Industry Eye publishing figures on the average estate agent commission for 2020 so far, we figured it’d be useful to unravel the workings of estate agent commission and give you an insight into estate agent fees in your area.
After something specific about estate agent fees? Or just nosey about the level of estate agent commission in your area? Get the answers you want fast by using the menu below…
- What are estate agents fees for selling a house?
- What do estate agents fees cover?
- Can you negotiate estate agents fees?
- What are the typical estate agent fees?
- Are there any alternatives to estate agents?
Estate agent commission is a form of fee payable by you (the seller) upon completion. Typically your solicitor will use the proceedings of your sale to cover the agent’s fee, so for many of us an agent’s commission becomes a fee that we never actually see. Not that it’s a hidden fee, just more a transaction that happens in the background.
But that doesn’t mean you shouldn’t factor it in as an additional cost – far from it. Estate agents fees (as you will discover) don’t come cheap and can vary quite dramatically, hence why for most of us they’re the deciding factor when choosing an agent.
HEADS UP: An estate agent's commission and an estate agent's fees are much the same. Commission is the amount the agent charges as a value (£), whereas fees are the same figure only expressed as a percentage (%). For instance, if a property with a value of £150,000 was subject to an fee of 1%, the agent's commission would be £1500.
Although, it’s worth remembering that cheaper estate agent fees don’t necessarily save you money.
No. You read that right. In many cases paying a large estate agent fee can actually save you money. Confused? Look at it this way.
You have a house worth £200,000. Agent X offers you a fee of 1% (£2000) whereas Agent Y offers you a fee of 1.5% (£3000).
Agent X isn’t actually a very good estate agent and doesn’t have a large network of buyers (not that they told you that). After 3 months of low interest, they pressure you to lower your asking price – they suggest £180,000. Angered by the low interest and the agent’s cries of a ‘slow market’, you cave.
A couple of months down the line you get interest from a first time buyer who’s keen to use the fact they have no dependant sale to get you down even further. You compromise again and let the house go for £175,000 - £25,000 under market value. A similar price to what you’d have achieved through a ‘sell house fast’ company like us, only without any of the fees and in just 7 days… not over 6 months.
Foot a steeper fee though, and things could be a whole lot different.
You see, Agent Y has a good knowledge of your area and over 30 years of success under their belt, so as you'd expect, their database of buyers is far more extensive. Within the first few days of Agent Y listing your property, you’re up to your eyeballs in viewings. In less than a week you have multiple offers on the table and because of the high interest, Agent Y escalates the situation to ‘best and finals offers’. After a heated bidding war, you walk away with £215,000 – £15,000 over market value!
The results pretty much speak for themselves:
• £23,000 under market value for £2000 in estate agent commission.
• £15,000 over market value for £3000 in estate agent commission.
Want to cut agents out altogether? We charge £0 commission and can complete in just 7 days!
Estate agents fees cover all the associated costs that come with selling your property on the open market as well as any services provided by the estate agent to guide your sale through to completion. To give you a better idea of what the typical estate agent fees cover, here's 3 examples below...
Estate agent commissions cover marketing costs – These range from essential forms of property marketing such as brochures, photography, floorplans and access to online property portals (Rightmove/ Zoopla etc.) to more optional marketing quirks like virtual tours, drone photography or PR coverage.
NOTE: What with the coronavirus pandemic, virtual tours are becoming a fast-emerging property marketing strategy that any seller needs to be aware of. Got 5 minutes? Click here to get up to speed on this revolutionary phenomenon.
Agent commissions also take into consideration negotiation requirements - Selling a house on the open market requires a lot of negotiation, be it on price, completion dates or ensuring there’s clear communication as a property reaches best and final offers. As a seller, this is something you hand over to the agent, so it's extremly important that you establish their experience in this area before instructing them.
Unsure that an agent you've instructed can negotiate a good deal on your behalf? Test them. Ask someone you know to make a low offer on your property and see how they handle it.
Conveyancing guidance is also included in estate agent commission - Unless you’re in a legal profession, conveyancing can be a bit of a mind bender. For those of you who’re unsure, conveyancing is the process where a property is legally transferred from one owner to another. It’s also the stage in which a property sale becomes legally binding, so as you’d imagine it’s somewhere where making mistakes can cost you dearly. And what with all the legal jargon that comes with it (exchange, completion, searches, enquiries, deeds etc.) it’s something we’d always advise leaving to a professional.
TOP TIP: Ask all agents about conveyancing before instructing them. Paying a steep commission to an agent who isn’t clued up on the legal side of a property sale could come back to bite you, especially if you’re looking to sell your house quickly.
Open market sale with fees - private sale that's fee free! We know which we'd rather have...
Yes – although it depends on the agent.
As you’ll probably well aware, agents come in two very-distinct breeds - online and high street. A difference that can to a large extent hamper your ability to haggle on commission.
For starters, online agents (the likes of Purplebricks, HouseSimple etc.) use their low fees to distinguish themselves from high street agents, which makes haggling pretty difficult. Nevertheless if you’re seriously considering an online agent, give it a go. Your phone call will probably go something like…
“I’m afraid Mr/Mrs X, our commissions are already extremely low as they are – may I remind you that we’re only charging just (insert cheap rate here) to do what everything that a high street agent does, which if you were to consider, would cost you considerably more.”
See what they did there? They didn’t shout, get aggressive or even use the word ‘no’. All they did was take their price, knowing its far cheaper than anything you’ll be quoted on the high street, and fire it straight back at you – in essence a covert way of saying ‘take it or leave it’.
So, congrats! You’ve now reached a dead end.
And it’s not as if you can throw a bit of pressure into the mix either. With online agents being pretty much like the name suggests ‘online’, dropping by in person to follow up your call is not an option. A tactic you can use (and we encourage you do) to get yourself a better deal through a high street agent. Remember, people will say pretty much whatever they like when they’ve a phone or email to hide behind, but less so when you’re stood directly in front of them.
But just so we're clear, we're NOT advising you storm into your high street agent spewing curse words at the top of your voice until you get a deal (even if the agent was a incredibly blunt over the phone, they don't deserve that). Politeness is everything in negotiation! What we're saying is that merely dropping by for a face to face chat to follow up on your phone call - or discussing price directly during an appraisal - is far more likely to get you a reduction in commission, especially if the market is slow.
To be honest, if you're looking to sell on the open market and pay as little commissison as possible, we'd always recomend trying your luck with high street agent before going online. And if you do choose to go with an online agent, doing your research... thoroughly.
WARNING:There’s a reason commission for online agents is SO cheap. Not only do they outsource their legal services to conveyancing back offices like MyHomeMove and eZieConveyancing, but they’re also not short of hidden charges. For instance, if you sell your property through Purplebricks and opt for their ‘pay after sale’ option, you’ll forfeit the right to use your own solicitor (i.e. be forced to use their pricier in-house alternative). And in the event you refuse, you'll be forced to foot ANOTHER fee!
Don't want the hassle of agents? We'll buy any property, any location, any condition... for CASH!
As we’ve discovered, estate agent fees vary considerably. At one end of the spectrum you’ve got your online agents and at the other you’ve got a gaggle of high street agents, all competing to be the most prestigious in their area - a quality that’s often reflected through their fees.
So what with the hype around the ‘mini boom’ (a consequence of the Stamp Duty Holiday) leading the the majority of agents to increase their fees, what is the average cost of selling through the open market in your area? And how much commission have estate agents made overall in 2020?
Discover the staggering statistics below…
|East of England||£298,807||27,699||1.51%||£4,512||£124,977,492|
|Yorkshire & The Humber||£166,950||24,473||1.48%||£2,471||£60,469,357|
Total Estate Agent Commission paid across England and Wales
= £979,081,346... (gulp!)
*Data source: GetAgent.co.uk/ Land Registry.
Not keen on paying thousands in fees? We don't charge them.
After seeing that total, we’re pretty sure you’d be itching to ask this question, so here goes…
Thankfully, there are ways to avoid estate agent commission that’ll also prevent you from selling through what is now a very crowded open market. In fact, when it comes to alternatives to estate agents there’s a fair few, many of which that also allow you to sell your property faster and with far less fuss. So without further ado, here’s 3 viable alternatives for you to avoid estate agent commission…
Avoid estate agent commission with property auctions
If selling your property through an agent isn’t up your street, the property auctions may be. Not only do they guarantee a quick sale providing your property meets its reserve, but they also come with minimal fuss for you as the seller.
Although, it has to be said that the auction fees aren’t a whole lot cheaper than estate agent commission, and many times can be more costly. According to Home Owners Alliance, you should expect to pay around 2.5% of a property’s value in auction fees. That being said, selling your house quickly through an auction is a lot more pleasurable than 6 months + sat on the open market, so you could argue it’s in fact a small price to pay, especially if you’re selling an ‘affordable’ house.
Avoid estate agent commission with part-ex schemes
Another route to consider if you’re looking to curb estate agent commission is part exchange schemes, especially if you’re in the in the market for a new build. Offered exclusively by most developers, part exchange schemes are much like they sound – they allow you to use your home as equity against your next purchase. Great if you don’t have the cash available to reserve your desired plot. Also, by dealing with the same party for both your sale and purchase, life for your solicitor should be a lot smoother (fingers crossed).
However, that’s not to say part exchange schemes don’t have their flaws. The most obvious being the price, which anyone who’s considered a part ex will know, is incredibly low – most of the time you’d be better off biting the bullet and going through an agent. As well as price, developers also have VERY strict criteria, which goes way beyond unmortgageable issues. Location, plot size and even the condition of the local market can often play a huge part, so as you’d expect part ex schemes are by far the easiest or cost effective way to skirt around estate agent commission.
Avoid estate agent commission with a cash property buyer
While auctions and part ex schemes are viable alternatives to avoid estate agent commission, we think we can go one better. You see as a cash buyer of property we pride ourselves in the fact that we don’t charge commission – not one penny. Neither do we require your property to comply with a stringent list of restrictions before we give you a cash offer.
We’re not picky. We’ll buy any property that’s in any condition and any location (providing it’s in England and Wales) in as little as 7 days! It's as simple as that.
Fancy making a fee-free move next week?