Welcome to this absolutely FREE and information only site. We aim to give you the best and most up to date advice around on the subject of estate agent fees.
We are not an estate agent, nor are we affilliated with any so you can rest assured you aren't going to read a sales pitch. What we do offer if free advice surrounding estate agent fees, followed by a quick look at the alternative options to using an Estate Agent.
WHAT ARE ESTATE AGENT FEES?
Estate agent fees, or commission, is the price you pay for the services of your appointed estate agent for selling your property or land.
WHAT DO ESTATE AGENTS DO FOR THIS FEE?
Estate agents carry out a number of various services for this fee including : -
1. Setting the "asking price" for the property or land for sale. The estate agents set this price using a combination of recent house sold prices in the area, current house price trends and their own assessment of the property itself. The estate agent is not, however, qualified to assign a proper valuation as they are simply not qualified to do so. If you require a full valuation, you would need to instruct a surveyor who has specialist training in this field.
An estate agent (unless new to the job) will have some level of local experience which will help them to reach the asking price figure that they would like to market your property or land at. Remember it is always wise to speak with more than one estate agent if you are deciding which one to appoint; that way you can assess not only their fees, but also how professional they are.
The true value of a property is not set by an estate agent, but ultimately dictated by the property purchaser themselves. The old saying, "its only worth what someone is willing to pay for it" comes into play here.
2. Producing property sales material. This includes the estate agent photographing the property, this is usually pictures of the best features and an image of the front of the house. The estate agent will also compile a more detailed description of the dimensions, features and good points about the house. They do so following a tried and testing format, which basically buyers expect. Whats missing from this process is "insider knowledge", the estate agent doesn't know the property as well as the owner and salient information can be lost at this stage.
3. Promote the property with advertising. This is where they use there skills to attract potential property buyers. Estate agents will use several methods here including errecting a "for sale board", advertising in the local press and sending out the property details to awaiting potential buyers. Some estate agents do more than this, some agents do less so its important to make sure that you check what level of advertising your chosen estate agent will undertake for the fee that they charge.
4. Conducting Viewings. Most estate agents will offer to carry out the viewings with a view to receiving an offer on the property or land for sale. The estate agent will show the interested buyer around the property pointing our features and "selling" it to them. A measure of how good an estate agent is how well they perform during this task, and unfortunatley its where many of them fall down. The range of skills in this area can be vastly different, ranging from an estate agent who will simply point out which room you are in to really spending time with the buyer identifying those parts of the property that are particularly important to them. Conducting viewings is the most important part of the property sale so its important that you feel confident in the estate agent's ability to do this well.
For anyone that has been shown round a property by an estate agent they will know too well how varied their skill sets are. In the UK, an estate agent is fairly unqualified and the best are often those who are most experienced. Our property market is vastly different to that of say the U.S.A. who realtors (the American name for estate agents) train for years to become skilled at home staging, negotiating and promoting a home. Anyone but anyone in the UK can become an estate agent or set up an estate agency. Property is one of the largest industries (billions of pounds change hands), and it always surprises me that estate agents are unregulated.
HOW MUCH SHOULD YOU EXPECT TO PAY AN ESTATE AGENT?
On average, you can expect to pay between 1.5 and 3% of the total sale price of the property or land beng sold. The estate agent only gets paid if they are sucessful in selling your home. This figure is also subject to V.A.T. (value added tax) which is at a rate of 17.5%, this needs to be added to the percentage figure at the end. The estate agent doesn't get this extra amount, but the property seller still has to pay it as it is a government requirement to pay tax on the service given by the estate agent.
So, lets take a look at the actual figures of what an estate agent's fee works out at. Using an average figure of 2.2%
Example 1. A property that sells for £100,000. The commission to the estate agent will be £2,200 + vat = Total of £2,585
Example 2. A property that sells for £200,000. The commission to the estate agent will be £4,400 + vat = Total of £5,170
Example 3. A property that sells for £500,000. The commission to the estate agent will be £11,000 + vat = Total of 12,925
As you can see, the more your property is worth when sold, the higher the fee to the estate agent will be.
The average price of a UK property is around £191,000, and so a seller in this case would be expected to pay their estate agent a fee of around £4,937.
WHY DOES IT COST SO MUCH?
An estate agent fee can be perceived as quite expensive, and their job can be relatively easy in comparison to the amount they charge. They do however, find a buyer for the property or land for sale and as such it is a specialised task especially if the estate agent has a difficult property to sell. It is for individual property sellers to decide whether or not the estate agents are worth what they charge.
More and more people are questioning this practise for the sole reason that the estate agent fee is so expensive in line with what they actuallly do. Growing numbers of people are deciding to sell their own property themselves and save themselves having to pay an estate agent at all. This practise has increased in recent years, largely due to the vast increase in household internet useage, which has made buying and selling most things a lot easier for all. Today's consumer demands choices and value for money due the high levels of competition in the marketplace. Some would argue that an estate agent does not provide value for money, especially when you consider that an estate agent fee is determined by the sold price of the property: - is that fair?
WHAT ARE MY OTHER OPTIONS?
What many people don't yet know is that you can sell a property or a piece of land without an estate agent. It is not a legal requirement to appoint an estate agent to sell a property. There are private property websites, that have proved that it can be easy to sell a property privately: without the need for an estate agent. Many people are opting for this option as the future for UK property selling. The single biggest reason for choosing to not use an estate agent is save the thousands of pounds in fees. Other reasons include sellers wanting to control the sale of their own property themselves; not trusting estate agents (they have a bad reputation on the whole); the sellers belief that they can do a better job than an estate agent would.
So for a one off fee of around £50, these websites will list the details your property online in the places that estate agents list; provide a professional for sale sign to atract the local market, and also enable you to have direct access with the potential buyers using a secure email system. This puts the property seller in control of the sale, whilst saving them a small fortune in fees. If you think it sounds like too much work then its worth considering how much work is involved anyway with liasing with the estate agent themselves: - you could just do this directly with the buyer. Also, you have to do most of the work anyway, e.g, preparing the property for each viewing, speaking to the solicitor/conveyancer, deciding how to handle the offers, co-ordinating viewing times and much more. Try www.MoveWise.co.uk they are a great private property sales website.
IF THAT'S TRUE, WHY DO PEOPLE STILL USE ESTATE AGENTS?
People still use estate agents for several reasons. The main reason is that there is a lack of knowledge surrounding the private property process. People simply are unaware that you can save thousands of pounds in estate agent fess by selling their property themselves. Another reason is that people don't feel that they can sell their own property themselves, in some respects they over estimate what is involved. Also, some people don't have the time to carry out the viewings or deal with enquiries from potential buyers.
Private property selling isn't for everyone, but if you decide that its worth a try considering the massive savings that can be made then make sure you do your research to find all the advice you need.
I hope you have found out everything you need to know about estate agent fees. If you have any further questions, please feel free to email us, and we''ll be happy to help you.
Further information can be found from the national association of estate agents, where you can pose questions, find a local estate agent or make a complaint.
Thanks for taking the time to read this web page.
Free property advice.