Talking you through the cost of estate agent fees, what they include and if there's a way you can avoid them...
Selling your house on the open market is never as simple as it sounds, especially if you’re wanting to get sold ASAP. You can get all your belongings packed up, house tidied and prepped for every viewing and spend a fortune on marketing, but it’s useless if your estate agent doesn’t actually get anyone through the door (which, after all, is the whole reason you’re paying estate agent fees).
Estate agent fees aren’t cheap, which is why you should be expecting a lot from them, whether this be accompanying viewings for you or going the extra mile and contacting anyone from their list of potential suitors to invite them to see your property.
Whether you’re after something specific, or just wanting to have a nosey about estate agent commission, this menu will help you find an answer ASAP:
- What are estate agent fees?
- What do estate agent fees include?
- No sale no fee estate agents
- Online estate agent fees
- Can you negotiate estate agent fees?
- Is there a way of avoiding estate agent fees?
Forget estate agent fees...
Estate agent fees, also known as an estate agents’ commission, is an amount paid by you to your estate agent on completion of your house sale for all the work they have put into selling your house.
Normally, your solicitor will take out the cost of your estate agent fees when your house sale completes, and they receive the full sold price. This will mean you won’t actually see the transaction come out of your account but it’s something you need to be aware of, with it being a big cost.
According to The Advisory, the average estate agent commission fee was 1.42%, including VAT. Whilst this doesn’t sound like a huge amount, if you sold your house for £200,000, you would have to shell out £2840 just to your estate agent. That’s before you’ve thought about the conveyancing fees too!
Research by HomeOwners Alliance suggests that some estate agent fees can be as high as 3% of the sold price, without including the 20% VAT! This means selling your house at £200,000 will now see you shelling out £7200!
Whilst it’s tempting to go with the option of the lower estate agent fees offered to you, it’s worth keeping in mind that this cost may be lower because the estate agent isn’t as good and won’t be able to get you as high a price for your property, meaning, despite paying lower estate agent fees, you will be worse off in the long run.
Before you agree to pay these high estate agent fees you will need to be aware of what it is you’re paying for and what you can expect from your estate agent. Normally you will get an estate agent contract, detailing all the jobs you can expect your estate agent to carry out for you.
Typical estate agent fees will cover:
- Valuing your property, based on conducting research into the local market, trends and sales history
- Photographs and creating floorplans
- Creating an advert for your house, including writing up a description of your property
- Responding to enquiries and organising viewings
- Installing a for sale sign at your property
- Conducting viewings (most of the time)
- Sourcing a buyer from their own contacts
- Marketing your property on portals (such as Rightmove or Zoopla)
- Negotiating a fee with buyers
- Speaking with solicitors during conveyancing
- Their own operating costs (office costs, petrol for travelling to viewings, etc)
Hidden estate agent fees to watch out for
Whilst you’re looking at different estate agent fees, you will need to judge what’s actually included in what you’re paying and what is an added extra, or hidden cost. These are things that you may expect to be included but will actually end up costing you.
A typical example of a hidden estate agent fee would be the amount of commission you need to pay. For example, often an estate agent may give you a quote, excluding the VAT. Whilst estate agents are meant to be up front about whether their fee includes VAT or not, some will not quote this upfront and so it’s important you check this out.
You may also find that an EPC isn’t included in the estate agent fees and so you will have to pay up an average of £110 to make sure you’re acting in line with government legislation. It’s important to remember EPCs last for 10 years before you will need to get another, so you may still have a valid EPC, saving you some £.
Another hidden fee that isn’t included in your estate agent fees is a featured or premium listing on Rightmove, which both cost an average of £125. Whilst these aren’t necessary or essential, they will help your property to stand out and draw in more attention, which *should* lead to more interest and viewings.
A further cost that may not be included in your estate agent fees is an ‘enhanced marketing package’. Once again, not essential but will include more ‘advanced’ features, such as 3D virtual tours, drone photography and creating PR for your property in local newspapers and publications.
Finally, a hidden fee not included may be withdrawal costs. Whilst no estate agent should charge these at all, there are some, especially online estate agents, who will charge you for deciding you no longer want to use their services so BEWARE!
Don't want to worry about hidden costs?
A no sale no fee estate agent is exactly what it sounds like – if you don’t sell your property, then you don’t need to pay any fees. According to Movewise, estate agents only sell around 50% of the properties on their books, making a no sale no fee estate agent look very tempting.
Most high-street, or ‘offline’, estate agents offer a no sale no fee service, meaning they will look after everything for you and expect nothing in return until your sale completes when they can then claim their estate agent fees.
If you’re looking for an online estate agent, then there are a few which offer a no sale no fee service, such as Yopa, eSale, 99 Home and Strike. It’s often the case that when using an online estate agent you will have to pay a higher fee for a no sale no fee service, and there are normally certain conditions, meaning it’s not as simple as it sounds.
For example, 99 Home normally charge a basic upfront fee of £99 but when you choose a no sale no fee option, you will be expected to pay £799 or more after your sale completes, showing how much more you have to pay for choosing this option.
With online estate agents, there are also normally a certain number of months you’re tied into when you choose the no sale no fee option, which leave you sitting around wasting time on the open market because you don’t want to pull out and have to pay a BIG fee.
As we’ve just hinted at, an online estate agent can give you a different option to a local high-street agent, and their estate agent fees can often work out cheaper. This is because, although some do offer a ‘no sale no fee’ option, the majority will ask for an upfront fee.
Although this will mean you have to pay before the online estate agent has sold your property, you will be paying a LARGE amount less than you would when paying your local estate agent’s commission.
For example, if you choose to sell your house with Purple Bricks, you will pay £999 upfront, regardless of the sold price for your property. This means whether you sell at £100,000 or £1,000,000, you only need to pay £999.
Whilst an online estate agent seems like a better option, with their estate agent fees being much cheaper than a local estate agent, it’s often that a lot of ‘basic estate agent jobs’ aren’t included in the fee, and you will either have to pay extra or they’re not on offer at all.
For example, most online estate agents don’t offer accompanied viewings as part of their fees, and you will either have to host viewings yourself or cough up an extra few hundred pounds.
Also, whilst an online estate agent may have lower estate agent fees, you will also find yourself doing a lot of the work and spending a lot of time trying to get your house sold. Whilst this doesn’t cost anything, your time is arguably just as valuable as money and so it may actually be a better option to pay a local estate agent’s higher fee.
Don't spend lots on estate agent fees and...
Whilst it won’t be possible to negotiate with online estate agents over their estate agent fees, most high-street estate agents will be open to conversation, allowing you to haggle yourself a better deal.
If you’re selling a high-value property, you will normally find your estate agent will be more open to negotiating as 1% of £1,000,000 for example is going to be a lot more than 1% of £100,000.
Also, you may be able to get your estate agent to ‘price match’ other estate agent’s fees, especially if you live in a desirable area or you have desirable house qualities, such as family-sized homes near good local schools.
It’s a good idea to get valuations and quotes from a few different estate agents so you can use this to haggle with your desired estate agent to hopefully get them to offer you a better deal.
You could also try to strike a deal with your estate agent that you’re happy to pay them a slightly higher percentage if they manage to get a higher price for your property.
You should also be wary of estate agents who are willing to drop their prices a lot without you really having to ask. This shows they’re either poorly trained, inexperienced, or desperate for business – all of which are qualities you will want to AVOID when looking for an estate agent.
After reading this far, you’re probably starting to worry about selling your house and having to spend loads on a good estate agent, leading you to come to this section to find out if you can avoid estate agent fees and the good news is you can!
Not only can you avoid estate agent fees, but you also have a few different options when it comes to avoiding them, allowing you to choose a route that is best suited to you.
Avoid estate agent fees with property auctions
Selling your house through a property auction will allow you to avoid estate agent fees, whilst also achieving a quick house sale. Providing your property meets its reserve price, your property will be sold with minimal fuss in a fast timescale.
Having said this, you may find that your auction fees could actually work out more expensive than estate agent fees, with you having to pay marketing costs, room hire, auctioneer commission fee and will still have to think about paying your legal fees too.
Also, when selling at auction, the price you get for your property tends to be quite a bit below expectations, leaving you with less money than you hoped for whilst still paying a high amount on fees.
Avoid estate agent fees with part exchange schemes
Another route you can consider if you’re wanting to swerve estate agent fees is selling your house through a part exchange scheme. A part exchange scheme allows you to use your house as part payment towards your next property, which will have to be a new build from a developer.
Whilst you’re able to guarantee yourself a sale for your property in exchange for money off a new build property, that’s not to say that a part exchange scheme doesn’t come without flaws.
Not all properties will be suitable for part exchange, with developers having very strict criteria about what properties they want to take on. Your house can only be between 65-75% of the value of your new build and you will get significantly below the market value.
This is because the property developer will ask a few estate agents to give your property a value based on the price they believe it would sell at, rather than the ‘asking price’.
You will also still have to cover your legal fees and there’s also no guarantee that the developer might decide they no longer want to part exchange with you, leaving you looking for a buyer ASAP so you can still purchase your desired new build.
Avoid estate agent fees with a cash property buyer
A final option you have to avoid estate agent fees is to sell your house to a cash property buyer, like ourselves! Here at The Property Buying Company, we pride ourselves in not charging you a single penny and buying your property off you for cash.
Not only this, but we also buy any property in any condition in any location in as little as 7 days or any timescale of your choice! We’re rated excellent on Trustpilot, so with us, you’re in safe hands.
Give us a call or fill in our online form to receive a no-obligation cash offer which you could have in full in your bank, without any legal or estate agent fees to pay…
Ready to sell your house by next week, fee-free?