When selling property, it’s vital that you find an estate agent that best suits your needs. The same estate agent won’t be the same for everybody. The first step is to invite an estate agent to value your home. This will give you a clear idea of what you can sell it for and help you decide which agent you want to work with.
High street agents typically charge around 1.5% of the sale price, or a pre-agreed fixed fee. For example, even on a 1.5% commission you will pay £4,500 if you sell your home for £300,000.
This is a huge amount compared to online agents where packages range from about £300 to £1000.
Online estate agents are often cheaper than conventional high street estate agents. They vary in terms of what packages and prices they offer.
Fees for online estate agents vary, but can start as low as £300. This might be a flat rate fee paid upfront. Other pricing plans vary, and most offer payment on completion, but that can cost more. If you want an agent to conduct viewings, this can cost extra.
Hybrid Estate Agents
Hybrid agents are companies such as PurpleBricks who operate online but also offer services of local property experts who can do things like conducting viewings on your behalf. This gives the company that personal touch but it also makes their packages more expensive than other online agents.
In most cases, going for one local agent is your best choice. These guys know the local market, have more time to focus on your property and are big on providing a great service.
Estate Agent Contracts
Every estate agent is different, meaning you could be offered a variety of contracts. These are legally binding so it’s important to consider several things before you sign on the dotted line.
Types of agreements you’ll come across:
- Sole Agency: Sole agency means just one agent has the exclusive right to sell your property for a set period of time. If it is sold by another agent in this time you will still have to pay the sole agent their fee, as well as the agent who actually sold it. In general, sole agency fees can range between 1% and 2% of the sale price. A tie-in period is usually up to eight weeks.
- Multi Agency: A multi-agency arrangement means several agents will market your property. The successful agency is paid the fee upon sale of the house. This fee will be in the region of 1.5% to 2.5% of the sale price.
- VAT: agents will often give you their fee, exclusive of VAT. This means you need to add 20% on to their fee. For example, 1.2% + VAT translates into 1.44% inclusive of VAT. Make sure you check this, and that you compare fees accordingly.
- Tie-in Period: Most estate agents have a tie-in period in their contract. This typically lasts 6 weeks, with a notice period spanning 1 – 4 weeks. Be sure to review this carefully as some agents’ contracts tie you to them for as long as 6 months!
- Cancellation Fee: some agents will include a cancellation fee if you choose to switch to another agent or withdraw your property from the market.
- Marketing Fees & Extras: some agents will try to win business by charging lower fees than competing firms, but then add additional costs such as marketing fees, EPCs and so worth.
Estate Agent Fees
- Contract type: A multi-agency arrangement means several agents will market your property. The successful agency is paid the fee upon sale of the house. This fee will be in the region of 1.5% to 2.5% of the sale price.
- Service: some firms will also charge more simply because they believe they offer a high level of service.
What is included in the fee?
- Guidance & advice: Chances are you’re new to the selling game so your estate agent is on-hand to offer you access to their experience and connections. This advice relates to things like valuing your property, tapping into local market knowledge and connecting you with local service providers such as conveyancers.
- Marketing & advertising: Your agent should utilise both online and offline marketing channels. At a minimum, your property should appear on the main property portals; Rightmove, Zoopla and OnTheMarket. OnTheMarket states that member agents are only allowed to hold membership with one of the two rival portals, so you won’t find an agent that will list on all three.
- Sales and lead management: An estate agent should manage the flow of prospective buyers. They’re responsible for organising and hosting viewings should you wish, vetting potential buyers, negotiating a sales price and acting on offers from interested buyers.
Choosing the Right Estate Agent
When selling property, it’s vital that you find an estate agent that best suits your needs. The same estate agent won’t be the same for everybody. Bear in mind that estate agents work on a commission basis, which means they are naturally keen to market your property efficiently and ultimately sell it. If they don’t, they don’t get paid. (This is not to say all estate agents are good at this!) Most often, people will pick an agent based on one of the following:
- The Fee: fees matter, but so does quality. A 1.2% fee on a £450,000 property means into £5400 in fees. If another agent charges 1.4%, but sells the property for £470,000, fees go up to £6580, but you sold for £20,000 more. The ‘you get what you pay for’ saying often holds true. Going with the lowest fee could potentially cost the seller thousands of pounds if the agent underperforms.
- Valuation: Ask at least three agents to carry out a valuation of your property. You might be surprised at the variation in price and the credentials they base this valuation on.Do not necessarily be impressed most by the agent that values your property the highest. It is not a guarantee this is the most realistic asking price.
- Word of mouth: Ask friends, family and colleagues who have recently moved which estate agents they used and whether they were happy with them.
- Check credentials: Estate agents must be members of The Property Ombudsman or The Surveyors Ombudsman Scheme. Many will also be members of trade bodies. This means that they have to comply with a code of conduct This may indicate a higher level of professionalism. Trade bodies to look out for are:
- Guild of Professional Estate Agents (GPEA)
- National Association of Estate Agents (NAEA)
- Royal Institution of Chartered Surveyors (RICS)
You should be able to research this online. Members of these schemes will surely be advertising the fact on their websites.