You want to sell your property through an estate agent, but how do you avoid paying too much and still find the most suitable one for you?
Do your homework
It’s important to do your homework. Ask family members, friends and work colleagues about local estate agents they have used in the past, the sort of experience they had, how quickly they sold their property and how much it cost.
Take a look at the estate agents in your locality. Do some mystery shopping; walk in to their office as a prospective buyer to see how much effort the staff put into recommending properties to you. See whether there are properties for sale in a similar price bracket to yours; some estate agents specialise in properties within a particular price range.
Perhaps you want to use an online estate agent. Take a look at their website try and find reviews from people who have used them previously.
Get some free valuations
Once you have shortlisted three estate agents, ask each of them for a free valuation. At this point, you should already have a reasonable idea of what your property is worth, so be wary of the estate agents who either high-ball or low-ball your own estimations.
Although some estate agents offer a fixed price for selling your house, most charge a percentage of the selling price. According to The Advisory, this can range from as little as 0.75% + VAT to 1.5% + VAT for high street operators, whilst many online agents operate on a fixed-fee basis, starting from around £700 to £800.
Sole agents v multiple agents
Next you’ll need to decide whether you want use a sole agent. This means that the agent you choose has exclusive rights to sell your property for a set period (usually between 4-12 weeks). If, another estate agent sells your property during this period, you will have to pay them and the sole agent you contracted. Sole agents’ fees average at around 1.5% of the selling price plus VAT.
Using multiple agents means that more estate agents are working to sell your property, but only the one that sells it gets paid. Fees for a multiple agency contract are usually more expensive than sole agent fees and can be as high as 2.5% plus VAT.
Understand what you are getting for your money
Irrespective of whether you choose a sole agent, multiple agent or go for a fixed cost, you must understand what you are getting for your money. Sometimes, a fixed cost can look good, but you should consider what it is as a percentage of your asking price; sometimes, it can be higher than the percentage rates charged in single and multiple agent arrangements. Your estate agent is obliged by law to express a fixed charge as a percentage of the selling price.
Your contract should include everything required for the agent to market and sell your property. Unless they are an online agency, if they start asking for registration fees, money for photographs and marketing incentives, walk away. A ‘for sale’ sign, brochure with photographs to give prospective buyers, and online brochure hosted on the estate agent’s website should all be included in the price.
EFCs, mortgages and conveyancing
You may have to pay for is an Energy Performance Certificate (EPC). Your estate agent will be able to arrange this, although you will usually need to pay for the EPC yourself. Don’t feel obliged to use the estate agent’s recommendation though; you can source your own EPC. This also applies to using a mortgage broker recommended by your estate agent or their in-house conveyancing service. The estate agent will charge them a fee which will become a hidden cost for you and you might get a better price from an independent provider.
Many of us find haggling uncomfortable but when negotiating a selling fee with an estate agent, haggling can pay dividends, especially in a sellers’ market where properties are in short supply. Don’t be afraid to take the deals you are offered to other estate agents to see if they can do better. You could also offer a deal where, if your property is sold for the asking price. It might look like this:
|Selling price||Percentage of sale price paid to estate agent|
Local independent agencies are likely to be more flexible than large regional or national chains where operating procedures will be set in stone and local managers may have no control over pricing structures. Similarly, it may be difficult to negotiate with an online estate agency.
In conclusion, choose an estate agent that can meet your requirements at a price you feel provides good value. Most of all do your research and you will be able to decide when how much is too much.