Estate Agents Fees: An Overview

Your choice of an estate agent can affect the price you receive for your house.

And the smoothness of your selling process…

Without an estate agent, selling a house is very difficult…

So, exactly how much does a ‘typical’ estate agent charge? Are valuations included as part of this charge? And how do you choose which estate agent to work with?

Read on for in-depth answers to these questions and more.

How estate agents charge

Large high-street estate agents usually take a percentage commission on the final sale. This means they don’t take a fee if a sale doesn’t proceed.

Some charge a flat fee regardless of your property price. Many online estate agents and some small estate agent companies do this.

This means that they do not take a commission on the final sale. If your house is above average, this option can save you money.

You should check the conditions surrounding this by asking estate agents questions. For example, whether you get a refund if the sale doesn’t proceed.

When do estate agents charge?

Most estate agents charge their fees upon completion.

A small number charge up-front, or charge half up-front and the other half at the end.

This particular question could potentially be negotiable, too.

Breakdown of estate agents’ fees

1. Valuations

Most estate agents’ property valuations are free.

You should ensure you are not obliged to proceed with their firm if you are unhappy with the valuation.

After all, it’s a good idea to get several quotes to compare. It helps you understand why other estate agents differ.

Estate agents have sometimes exaggerate a house’s value. They do this so that the seller sells it with them over competitors. After all, the seller will believe they can get more money.

But overvalued houses will likely sell for less anyway.

So, you should ensure the estate agent’s valuation process is realistic. Getting several different valuations can help you determine this.

2. Commission

Estate agencies charge different percentage commissions.

According to Purplebricks, the average estate agent commission in the UK is 1.18% plus VAT
Zoopla states that the figure averages 1% to 3.5%
HomeOwners Alliance estimates anywhere from 0.9% to 3.6%

Using the Purplebricks figure, the amount you pay would vary according to the value of your house. For example:

For a £250,000 house, you would pay £2,950 (not including VAT)
For a £500,000 house, you would pay £5,900 (not including VAT)
For a £750,000 house, you would pay £8,850 (not including VAT)
For a £1 million house, you would pay £11,800 (not including VAT)
For a £1.5 million house, you would pay £17,700 (not including VAT)

Ask estate agents their commission figure. Then compare it to other companies and the national average.

Even a small percentage can equal tens thousands of pounds on a large enough house sale.

But a higher commission rate should come with a better service. You may decide that this is worth it.

3. VAT

These commission prices usually include VAT. (You should double-check this with your estate).

Your estate agent should tell you their commission rate before you agree to sell with them.

If they hide this information, you should be very cautious.

Hidden fees to look out for

Like any industry, estate agents have ‘tricks of the trade’.

One of these is increasing their costs with ‘hidden fees’. Some common examples of this include:

VAT (not included in their original price)
A fee for the Exchange of Contracts (sometimes charged even if the deal falls through)
Registration fees
Marketing incentive fees
Non-refundable deposits of up to £500 if the home seller withdraws from the sale.

Be wary of rogue estate agents

In the UK, estate agents are regulated.

So, you should have recourse to make an official complaint against them if they behave in an incorrect way towards you, via pricing or any other matter.

Negotiating with estate agents over fees

While it’s not often possible, negotiating estate agent fees is worth considering, especially with smaller, independent agencies.

Larger, national estate agencies typically have fixed commission rates that are difficult to negotiate.

It ultimately depends on the organisation’s policy and the specific estate agent.

Selling a house without an estate agent

You can sell a house without an estate agent.

It can be more time-consuming and stressful than using an experienced professional.

You should seek legal support for selling your house (in the form of a conveyancer). This applies even if you have yet to decide to use an estate agent.

The paperwork and compliance procedures for selling your home can become complicated. This is especially true around things such as (but not limited to):