Estate agent fees: how much are they?
When it comes to estate agent fees, there’s no hard and fast rule. Every estate agent is different. Some charge a percentage, others a flat fee. And paying extra doesn’t necessarily get you extra services.
Typical estate agent fees are around 1-1.5% of the property’s sale price, on average. But they can be as high as 3.5%, depending on the price of your property and where it is – or less than 1%, for online agents. And some include VAT, while some don’t.
But the difference in price doesn’t always reflect a difference in service. So it’s definitely worth shopping around before you sign on the dotted line.
And don’t be afraid to haggle. Many people don’t realise that estate agent fees are often negotiable. If you don’t ask, you don’t get.
Doing the maths
Flat fees can seem like a great deal, at first glance. But the lower the price of your property, the higher a percentage it works out to be.
For example, let’s say agent one charges a flat fee of £3,000 including VAT, and agent two charges 1% plus VAT.
If your property sells for £200,000
Then 1% works out at £2,000. Add on 20% VAT, and the final bill is £2,400.
If your property sells for £500,000
Then 1% works out at £5,000. Add on 20% VAT, and the final bill is £6,000.
The cheapest way is to use an online estate agency. Many offer a fixed fee, which means you know exactly what it’s going to cost from the word go. Prices start from as little as £45, and go up to £600.
But the service you get varies wildly. Some give you pretty much the same service as a traditional agent. But with others, all you get is a listing. So you can end up having to do a lot more work for not that much less money.
What do you get for your money?
Typical estate agent fees include:
- doing a valuation and writing up a report
- drawing up floorplans, taking measurements and photographs.
- writing up a description to entice potential buyers
- putting up a For Sale sign
- booking and running viewings
- marketing and advertising your property (online and in print)
- negotiating the sale price.
When do you pay?
It’s quite normal for estate agents’ contracts to say that their fees are due on exchange, not completion. That means that if you don’t complete, you still have to pay the agent’s fees.
Does the buyer pay estate agent fees too?
Only the seller pays. But the buyer has plenty of other things to pay for, like Stamp Duty and structural surveys.
It’s slightly different in Scotland
In Scotland, most solicitors are also estate agents. So they do the sales and marketing as well as handling the legal side of things (unlike England or Wales, where you have an estate agent and a lawyer).
In a nutshell
Estate agents’ fees vary a lot. Some charge a percentage, some a flat fee – and online agents can be a lot cheaper than the ones on the high street. But flat fees don’t always work out cheaper, especially for lower-priced properties. And sometimes lower fees can mean more work for you.
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