When in the process of selling a house, most of us think about the profits we will (hopefully!) walk away with. We think of the deposit we will be able to make on a new property or the funds we will have to relocate. We think of our next steps, understandably so, but we’re in the here and now. It is essential that we are as informed as possible and that we know what to expect. One aspect that can catch people off guard is all of the fees involved in this process! It seems like you’re writing cheques or sending electronic payments continually.
If you are using a professional to facilitate this process, what can you expect? What are estate agent fees for selling?
What Does an Estate Agent Do?
Before we get into the issue of fees, let’s discuss what an estate agent does for a seller:
- Assess your home and develop a valuation. This is typically done free; estate agents use it as an opportunity to check out your property and pitch their services.
- Discuss your goals and needs.
- Help set an asking price, using their extensive industry knowledge and ‘comparables’ (i.e. what other similar homes in the area have sold for).
- Prepare your home for showings and ultimately a sale.
- Arranging for professional photos.
- Marketing the home to potential buyers.
- In some cases, helping arrange for an inspection (though you should have input and final say on the professional who does this job).
- Recommend a solicitor or conveyancer (though again, you have the final word).
- Completing the deal.
There is certainly a lot that goes into selling a house. And you will be paying for it! Fees for surveys and solicitors are not covered under estate agent fees for selling so be prepared to pay out for these separately.
Estate Agent Fees for Selling
Now, what can you expect to pay for all of the services delivered by an estate agent? It depends. We know this is a frustrating answer when you are planning your budget! But it will vary according to various factors, such as the experience level of the agent, the area (e.g. London agents typically charge higher fees than an agent in, say, Reading), whether you go with a single agent or a multi-agency arrangement and their fee structure. Some agents charge a flat fee while others base their fees on a percentage of the home’s selling price.
In any case, make sure you go with a ‘no sale no fee’ arrangement. That is, if the agent does not sell the property, you do not pay.
The average estate agent fees for selling is 1.18% +VAT (though London based agents are typically more expensive). Currently VAT is 20%, so a quote of 1.18% is actually 1.38%. Your estate agent is legally required to tell you what is included in this fee. Still, though, it is important to avoid hidden costs. These can include fees for services like photos or marketing incentives. You also want to avoid withdrawal fees. For example, if you decide against selling, you should not be required to pay.
That said, what is typically included in estate agent fees for selling?
- Property valuation
- Development of floorplans
- Professional photographs
- Compelling written listing description
- For Sale sign installation
- Marketing the house and creating interest in the property.
- Organising viewings and, typically, managing them.
- Negotiating sale price.
If you are not sure what is included and what is not, ask! That is the best way to plan and budget for this expense.
Can You Avoid Paying Estate Agent Fees?
There are different sales methods that do allow you to bypass estate agent fees. You can:
- Sell it yourself. You will have to do all of the work typically taken on by an estate agent, which can be time-consuming and challenging. If you have experience in this process, though, you may feel confident in tackling it yourself.
- An auction can take place within 45 – 60 days, allowing for a relatively quick sale. This is an opportunity to reach buyers who are interested in bargains and do not mind purchasing properties in poor condition. You do run the risk that you will have to sell for the minimum price.
- Work with a cash house buyer. Skip all of the expenses of selling a house, complete your deal within days even if it is not in good condition and enjoy cash in your account.
Estate agent fees can be pricey – is it worth it to you?