Let’s cut to the chase. When you are contemplating selling your house, you – naturally – want to maximise the return on your investment while minimising expenses. So, what will estate agent fees cost you? The average in the UK is 1.18% + VAT (which is currently 20%) for a sole agency agreement. Keep that word in mind: average. You could be paying more. The question is: is it worth it?
A Look at Estate Agent Fees
As mentioned, the average for a sole agency agreement is 1.18% + VAT. Let’s back up: what is a sole agency agreement? This is when you work with a single agent. It is possible to choose a multi-agency agreement. Here, three or more estate agents are all working to sell your house. Whomever actually sells the house receives the commission. People often consider this an attractive possibility because as they have multiple agents acting on their behalf, the process is typically faster than a sole agency situation.
It is also more expensive: you will pay an average of 2.5% – 3% + VAT. Another issue is that the process can become quite hectic and frenzied; less than ethical agents may urge you to accept a lower asking price than you should simply so they get the commission. While we hope everyone is scrupulous and has your best interests in mind, in many cases, a sole agent will work to ensure you get the highest price reasonable.
*Note: Estate agent fees also differ based on location. For example, a London-based agent will cost you more than smaller or less expensive areas.
Some estate agents charge a flat rate (e.g. 1.18% + VAT, 2.0% + VAT) while others charge based on the sale price. In either case, you are looking at thousands of pounds in fees.
Is It Worth It?
In the UK, there is nothing to stop you from selling your house without an estate agent. You are completely free and within your rights to do so. And yes, maybe you will save thousands of pounds. Maybe. What is certain, though, is that you will spend far more time and effort without an agent. And unless you have extensive experience in buying and selling houses, you will also risk making blunders that could threaten the success of your sale.
For the vast majority of sellers, yes, estate agent fees are worth it. Typically included in the fees:
- Valuation of the property, which takes into consideration the local market, trends, comparable sales data and the condition, age, size, location, etc., of your house.
- Drawing floor plans.
- Instructing professional photographs of your home.
- Assisting and advising in setting a realistic, reasonable asking price.
- Writing a compelling listing description, designed to appeal to your target buyer.
- Recommending key improvements or updates that will help attract potential buyers.
- Installing a For Sale sign to attract passers by.
- Reaching out to their own network of appropriate buyers (the more experienced the agent, the bigger their contacts list, the better for you!).
- Marketing the property online and through traditional means (from listing on Zoopla to using newspaper adverts).
- Arranging viewings.
- Managing viewings (most potential buyers prefer an agent handle this rather than an owner, which can be awkward or uncomfortable).
- Informing you promptly of every offer.
- Negotiating a sales price.
- Interacting with your solicitor (always of your own choosing though they may provide recommendations) to streamline the process.
- Participating in completion.
In addition to providing invaluable advice and guidance, good estate agents also give a lot of time to this process. They’re driving to your property, they’re working the phones and computers to reach connections, they’re pulling up data, they’re interacting with valuations and survey experts, lenders, solicitors … they’re acting on your behalf to make a sale.
If you opt for a traditional sale, it is highly recommended that you work with an experienced estate agent. That said, there are ways to streamline the process and to avoid these fees. Working with a reputable cash house buyer, for example, can significantly cut costs (on everything from surveys to solicitors to agents and staging). These processes and expenses are handled by the buyer; all you have to do is accept or decline an offer – and then start packing up.
Regardless of the selling method you choose, make sure you have the impartial information, guidance and support you need. This is a big step: take it with confidence.