Your choice of an estate agent can affect the price you receive for your house.
And the smoothness of your selling process…
Without an estate agent, selling a house is very difficult…
So, exactly how much does a ‘typical’ estate agent charge? Are valuations included as part of this charge? And how do you choose which estate agent to work with?
Read on for in-depth answers to these questions and more.
What does an estate agent do for their money?
Your estate agent will handle some of the most crucial aspects of your property sale.
A typical estate agent will:
- Value your property
- Market your house to potential buyers in their pre-existing networks. This includes local, online and print listings)
- Organise and carry out viewings
- Negotiate on your behalf
- Communicate with other parties in the property chain
Estate agents also spend time advising and updating their clients.
They inform them of developments in the sale:
- Negotiations
- Processes
- relevant property documentation, etc.
How much are estate agents’ fees?
Estate agencies charge different percentage commissions.
- According to Purplebricks, the average estate agent commission in the UK is 1.18% plus VAT
- Zoopla states that the figure averages 1% to 3.5%
- HomeOwners Alliance estimates anywhere from 0.9% to 3.6%
Using the Purplebricks figure, the amount you pay would vary according to the value of your house. For example:
- For a £250,000 house, you would pay £2,950 (not including VAT)
- For a £500,000 house, you would pay £5,900 (not including VAT)
- For a £750,000 house, you would pay £8,850 (not including VAT)
- For a £1 million house, you would pay £11,800 (not including VAT)
- For a £1.5 million house, you would pay £17,700 (not including VAT)
Ask estate agents their commission figure. Then compare it to other companies and the national average.
Even a small percentage can equal tens thousands of pounds on a large enough house sale.
However, a higher commission rate should come with a better service. You may decide that this is worth it.
Are estate agent valuations free?
Most estate agents’ property valuations are free.
You should ensure you are not obliged to proceed with their firm if you are unhappy with the valuation.
After all, it’s a good idea to get several quotes to compare. It helps you understand why other estate agents see it differently.
Estate agents have sometimes exaggerate a house’s value. They do this so that the seller sells it with them over competitors. After all, the seller will believe they can get more money.
But overvalued houses will eventually sell for less anyway.
So, you should ensure the estate agent’s valuation process is realistic. Getting several different valuations can help you determine this.
Do estate agents charge up-front?
Large high-street estate agents usually take a percentage commission on the final sale. This means they don’t take a fee if a sale doesn’t proceed.
Some charge a flat fee regardless of your property price. Many online estate agents and some small estate agent companies do this.
This means that they do not take a commission on the final sale. If your house is above average, this option can save you money.
You should check the conditions surrounding this by directly asking estate agents questions. For example, whether you get a refund if the sale doesn’t proceed.
Hidden estate agent fees to look out for
Like any industry, estate agents have ‘tricks of the trade’.
One of these is deliberately increasing their costs with ‘hidden fees’. Some common examples of this include:
- VAT (not included in their original price)
- A fee for the Exchange of Contracts (sometimes charged even if the deal falls through)
- Registration fees
- Marketing incentive fees
- Non-refundable deposits of up to £500 if the home seller withdraws from the sale
Can you sell a house without an estate agent?
Yes, you can sell a house without an estate agent.
It can be more time-consuming and stressful than using an experienced professional.
Ideally, you should seek legal support for selling your house (in the form of a conveyancer). This applies even if you have yet to decide to use an estate agent.
The paperwork and compliance procedures for selling your home can become complicated. This is especially true around things such as (but not limited to):
- Exchange of Contracts and Completion
- Energy Performance Certificates (EPCs) needed to sell your house
- Background checks
- Various types of property surveys
Alternative to the open market: Cash house buyers
You can go directly to a cash house buyer who will give you a cash offer (slightly below its typical market value). This deal can then be completed within 7 days.
Some worry about the legitimacy of cash house-buying companies. However, like any industry, it comprises good and bad companies.
If you choose this path, surround yourself with reliable information and guidance.
How to choose an estate agent
Researching potential estate agents should start with checking reviews. If you can, next speak to to previous customers.
Next, evaluate their costs. This should include:
- Fees for valuations of your property
- Their commissions
- Add-on ‘cash buying’ facilities if a chain breaks apart and things go wrong.
Once you’ve done this, it’s time to begin the moving house process…
