With the average house in the UK now costing almost a quarter of a million pounds, and the typical property in London worth £500,000, the percentage estate agents charge to sell your home is likely to add up to a considerable sum. So, while the fee is certainly not the most important factor in choosing an estate agent (if you don’t know what is, see our guide), it is definitely worth negotiating to get the best deal you can. Here’s how to do it.
How much are estate agent fees likely to be? Before inviting an agent to value your property, ask them what their standard commission rate is, and whether there is scope for negotiation. See our article on estate agents' fees to get an idea of how they compare, and remember to check whether the quoted rate includes VAT, which will add 20%. (The Property Ombudsman code of conduct says that fees should be quoted inclusive of VAT, but in practice this is not always the case). The average estate agent fee in London is generally higher than in the rest of the UK: the lowest rates you are likely to find for a sole-agency sale is about 1.5% +VAT. If you intend to use joint or multiple agents, the fees will be considerably higher: see our article on the pros and cons of using more than one agent. Some agents will also have a minimum fee, which may be relevant if you are selling a cheaper property.
You should also ask if there are any additional charges that are not included in the basic fee: a reputable estate agent should not hide anything in this way but it’s worth double checking. The basic agent fees will usually include at least the following:
Remember that if you need an Energy Performance Certificate (EPC), this will also cost extra, and it may be cheaper to arrange it yourself rather than have the estate agent arrange it.
Talk to the agent either during the valuation or shortly afterwards. Once they have seen your property in person they will have a better idea of the target market and how easy it may be to sell. If the agent is keen and thinks the sale should be straightforward, they may be happy to negotiate on the fee, but this is not always the case. Some agencies, for example Foxtons, have a policy of not reducing their commission rates. Equally, you should be wary of agents who immediately offer a substantial discount, as this might mean they are desperate for business. You want to be paying enough to motivate the agent to put in the work: there is no benefit in negotiating a 0.25% discount on the fee if you end up having to reduce your asking price by 5%.
You should get valuations from around three local estate agents: this will also give you ammunition when negotiating, as you can play the various firms off against one another to see if they will match an offer. If an agent doesn’t want to reduce their fee outright, you could suggest a sliding scale, where they get the full commission if they achieve a sale above a certain threshold.
Most agents will want to tie you in to an exclusivity or tie-in period: that is, a period of time during which that agent has the sole right to sell your property. If you find a buyer during this time – even if the agent had nothing to do with it – then you will still be liable to pay a fee to the agent. A typical exclusivity period is 12 weeks: agents are more likely to be willing to negotiate on this if you are selling a prime property.
If you can’t reduce the exclusivity period, consider what will happen at the end of it. Would the agent reduce the fee, perhaps in return for a reduction in the asking price which will make the house easier to sell? Or could you bring in another agent, while keeping the fee the same? Once the agent has done the work to list your home, they won’t want to lose the listing so you will be in a stronger position.
Fixed fees are most common with online firms, where, unlike with high street estate agents, there is usually no scope for negotiation. The price may look attractive, but bear in mind that you will often have to pay upfront, so you will be charged regardless of how long your house takes to sell – or if it sells at all. We will look at the pros and cons of using an online estate agent in a future article.
We are experts at dealing with estate agents, and our volume of listings gives us the clout to negotiate the best possible agent fees. This means that even after we add on our own fee, you pay the same as you would if you were haggling yourself – but with significant advantages. You won’t be tied into an exclusivity period, so if the first agent doesn’t deliver, you can switch to another firm, or add a second agent, at no additional cost. And however many agents you use, you always deal with a single contact at Movewise, vastly reducing the hassle of switching agents as well as saving you hours dealing with paperwork, phone calls and emails.
To find out how Movewise is pioneering a better way to sell property, contact us today.