As the saying goes, ‘A wise person should have money in their head, but not in their heart.’ Moving home isn’t cheap, so it is worth reviewing where can you make savings. One of the things you can do is negotiate with your estate agent about the fees that you have to pay. Estate agent fees are a necessary part of the property selling process and are based on a number of different factors, such as how quickly similar properties are selling in the local area, the number of similar properties on the market, and their chosen marketing approach for your property. Most agents are prepared to be flexible and have a bit of room for manoeuvre, so it’s worth asking for the rationale behind the fee percentage you’ve been given. Here’s how to ensure you’re getting value for money.
1. CHOOSE THE RIGHT AGENT
You may be approached by agents offering fee reductions, but remember that low fees are only cost-effective if your agent also helps you sell your home quickly and at the right price. Choosing the right estate agent can be difficult, particularly if you seek several valuations and they vary dramatically. It’s tempting to choose the agent who provides the highest valuation, but a high valuation doesn’t guarantee a high selling price. Listing your home at the wrong price can delay your sale and cost you more in the long run. So, do your own research and search online to see what price similar properties have sold for in your area recently. Ask around for recommendations for local estate agents or look for online reviews.
2. KNOW WHAT’S FAIR FOR FEES
Fees for most high-street estate agents can vary between 0.75% and 3% (plus VAT) of the agreed sales price. If you sell for £200,000, that could cost you between £1,800 and £7,200. Make sure to check what’s included in the price your estate agent quotes. Does the price they’ve given include VAT? Is it sole agency or multi-agency? Does the contract mention ‘sole selling rights’ or ‘ready, willing and able purchasers’? These clauses can be costly! For a sole agency contract, you should be able to negotiate the fees down to 1% plus VAT.
3. ASK FOR EXTRAS
Getting value for money on your fees isn’t just a matter of negotiating a lower commission rate, it’s also about what’s included. Sometimes, low-cost agents will charge extra for photography, marketing and sales boards. But if you have several estate agents competing to list your property, you can likely negotiate to have these included in the rate you pay.
4. CHECK THE TIE-IN PERIOD
Some estate agent contracts may specify a tie-in period, which means that you cannot move to another agent within that time, even if you’re not happy with the service or haven’t received any offers. Since the market is so competitive, your agent should be confident they can secure a fast sale. So, you may be able to get a contract without a tie-in period. If the tie-in period is unusually long, typically more than 12 weeks, negotiate it down or work with a different agent.
5. CONSIDER AN ONLINE ESTATE AGENT
For lower fees, it’s increasingly popular to work with an online estate agent. These often offer fixed fees of between £99 and £999, rather than a percentage of the sales price and sometimes offer ‘no sale, no fee’ options. The downsides of an online estate agent are that they might not have the same local knowledge and experience as a high street agent, and you might have to put more of your own time into managing the sale. Also, if your agent is working on a fixed fee, which is usually paid upfront, they may not be incentivised to push for the best sales price and to keep the sale moving once agreed. Ultimately, there is more to consider than simply the cost of the fees. But the time is right if you want to ask for a discount.