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How much should I pay the estate agent?

Estate agents’ fees vary enormously, and add thousands of pounds to the cost of selling a home. It is difficult to avoid estate agents fees, but understanding them can help you haggle successfully – and save you serious money

The basics

  • Overwhelmingly, estate agents charge a percentage fee, which can be anywhere between 0.75% and 3.5% of the price you sell your home. A survey for Which? found the national average was 1.8%
  • You should aim to get a fee that is 1%
  • For higher value properties – such as over £500,000 – agents are often prepared to accept even lower fees, and perhaps go below 1%
  • The upside for the seller in the fee structure is that the estate agent has an incentive to sell the property for as much as possible, so they get higher commission
  • For more expensive homes fees can end up being tens of thousands of pounds  – which many sellers will feel is a lot of money for not much work. There is perhaps a reason that estate agents tend to drive such flash cars
  • Occasionally, particularly for cheaper properties, estate agents charge a set fee, which can end up as a high percentage of the total property cost. Online estate agents also often charge set fees - which we have summarised  here
  • Fees usually exclude VAT, which is currently 20%. So a 1% fee is 1.2% inc VAT, or £3600 on a £300,000 home and a 3% fee is 3.6% inc VAT, or £10,800 on a £300,000 home
  • If you appoint a sole agent, fees are lower than if you appoint a multiple agent (normally in the range of 1%-2%, rather than 2.5%-3.5%)
  • The estate agent is required by law to tell you what is included in the fee – does it include preparing the property details, advertising costs, and For Sale boards? Ideally, you should not face any added costs
  • More expensive estate agents are not necessarily better
  • There are regional variations, with estate agency fees higher usually in London than elsewhere (even though properties are also far more expensive)

Get the agents to compete on cost – and haggle over the fee!

It isn’t very British to haggle, but in a market where sellers are in short supply, you will probably find agents surprisingly willing to cut their fees to get properties on their books. If you are going for sole agency, you should aim for a fee of 1% - or even less for high value properties

  • Get quotes from at least three different estate agents, and ask them what their fees are for a sole agency agreement, and if there are any other costs. Make sure you tell each estate agents that you are seeing other agents, so they know they need to compete. You will probably get three different fees, although estate agents sometimes effectively operate in local cartels all charging the same fee
  • Estate agents often ask for 2% or 2.5% for being sole agent, since they know that most sellers won’t try to haggle. But that doesn’t mean they aren’t open to negotiation
  • Go back to the more expensive agents, and tell them the others are offering lower fees. Tell them that you are expecting to pay only 1%
  • Small estate agents are often more flexible on negotiating commission downwards than large chains, which often operate nationwide policies
  • Agents who are trying to win business to increase their market share in an area will probably be more open to negotiation than the leading estate agent
  • If you insist on putting the property on at an unrealistically high price, the estate agent is likely to be less willing to accept a lower fee because it will be harder to sell
  • If you achieve 1% you can be pleased with yourself – you might have to settle for higher fees

Give the agents sliding scales to get a higher sale price

Sometimes estate agents agree to a sliding scale of commission, to give them a big incentive to sell the property at a higher price. This more closely aligns their interests with yours, getting around the problem that agents are often just keen to get the sale, even at a low price, so they can move on to selling the next property to earn another commission. You will probably have to offer the agent a sliding scale, as they are unlikely to suggest it themselves.

For example, if you think your home is worth about £300,000, you could suggest:

  • 1% fee if they sell your home for under £275,000
  • 1.25% if they sell it between £275,000 and £299,999
  • 1.5% if they sell it between £300,000 and £325,000
  • 1.75% if they sell it for over £325,000

You could suggest the sliding scale if you think an agent is insisting on too high fees. In the example above, if an agent is insisting on 1.75%, you could agree to that but only if they sell it above £325,000

Online estate agents

If you still feel you are paying too much for an estate agent, you can always use an online estate agent for a fraction of the cost – as little as 0.5% or even £200. But you need to do your research. See How to save money with online agents?  

When should I pay the estate agent?

Unless you made the mistake of signing a “ready, willing and able purchaser” contract with the estate agent (see How should I choose an estate agent?), then fees normally become due when contracts are exchanged. However, you don’t pay until the sale is actually completed. You should never pay an estate agent before you have the money in the bank, or if they do not sell your house for you

We think the amounts charged by estate agents should be made freely available so homeowners don't feel ripped off.  We are campaigning for more transparency in the commission fees charged by estate agents in order to encourage competition on price.  If you have every sold a house or flat, please complete our  5-minute survey.  All data we collect is anonymous.

Related guides:

How do I lower my estate agent fees? What about online agents? 
What price should I sell my house for?
Should I sell my home myself?
How should I choose an estate agent?
How many estate agents should I use?
Step-by-step guide to selling your home
Top Tips: How to make your home sell faster and more valuable
The legal side of selling a home made simple

Find out what people are saying in our forum on  estate agent fees  or leave a comment below

Other questions? See how our ask an expert service helped a member avoid paying double commission for selling her home 

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The legal stuff is here. Last updated April 2013

 

 

14 comments on “How much should I pay the estate agent?”

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  1. I have sold my property at £62,000 the house was on the market for £79,500. I did this for a quick sale on the property. The estate agents are asking in exess of £4,000 for both the sale and legal costs. I have been advised that this far too much. Can you tell me if it is too much and what i can do about it.

  3. The devil is always in the detail…something that I have not been shrewd on. Basically I sold my house for £315,000. The estate agent is demanding what they say is a fixed fee of £7000 + vat @ 20% which is £8,400. They are threatening Court action & have sent me copies of prepared small claims Court papers.
    The fee is heavy & well over the going rate. The horse may have already bolted but I really want to challenge the excessive fee. Is that possible at this late stage!

  4. Hi Barry. Yes the devil is in the detail, and hindsight is a wonderful thing! Popular sayings aside, we recommend checking the contract you signed with your estate agent. It sounds like you’ve signed up to paying a commission fee of 2% + VAT. Estate Agent fees vary, but 2% is a common rate of commission. Doesn’t sound much when you say it like that but work it out and that’s the 4 figure number you’re being asked to pay. We know, it hurts. And it’s made worse by the fact Estate Agents aren’t very transparent about their fees. If you have time to complete our 5 minute anonymous survey then you could help our campaign to expose how bad the problem is. All the best for your new home – please keep in touch and don’t forget we have advice for managing and improving your home too. Many thanks.
    Ed, HomeOwners Alliance

  5. Very useful site. I may consider joining after digesting the information you have kindly provided.

  6. I’ve signed up with an estate agent they are charging 1.5%, they have written a fixed cost on my contract with them which is 1.5% of the asking price + VAT, I thought it would be 1.5% of the selling price + VAT.

    They say this is standard. is it? What if the final selling price is £20k under my asking price?

  7. I’ve never heard of estate agents charging based on the asking price. It sounds like a rip-off just to squeeze a few hundred quid more out of you. If you can terminate the contract – even if the difference isn’t that much you don’t want to deal with people like that

  8. Hi Tony,
    We’ve certainly not heard of this practice before. The vast majority of estate agents charge commission on the sale price rather than the asking price. Unfortunately although unusual it is legitimate for an estate agent to demand commission on the asking price. If you have signed a contract then there isn’t much you can do.

    We’ve contacted the NAEA (trade body for estate agents) who have responded:
    Mark Hayward, President of the National Association of Estate Agents (NAEA) said:
    “Agents only get paid when the property is sold and the fee, unless pre-agreed, reflects the price achieved. At the outset, the agent is required to state his agreed fee inclusive of VAT as a monetary figure, together with the corresponding percentage plus VAT. The latter will be used to calculate the final fee due based on the sale price.”

    We are campaigning for estate agent fees to be made more transparent. Please do fill out this survey which will help us push for a fairer deal for home owners: http://hoa.org.uk/campaigns/our-campaigns/make-estate-agent-fees-transparent/
    Ed, HomeOwners Alliance

  9. Should my agent be charging me £250 for marketing? Also my property has been on the market for 4 months with a reduction of £10k but I have only haad 1 viewing. Selling price was more or less agreed buy 3 agents.

  10. Hi Amy,
    Estate agents should include all of their costs in the commission fee. There are exceptions such as online agents who will often have a basic package with add ons which cost more such as virtual tours. It is best to check the contract. If it says nothing about additional fees then your estate agent should not be asking for extra payments. If you feel your agent is acting improperly you can contact the Property Ombudsman who can help to resolve the issue. If you would like an answer tailored to your situation check out our Ask an Expert service – http://hoa.org.uk/services/ask-an-expert/
    Hope this helps!
    Ed, HomeOwners Alliance

  11. Hi Ed, thank you for your response. I have read my contract and it is not in the pre-printed part but the wording ‘discussed cancelation fee’ has been hand written on the front. If at any time I pull out after the 12 week period and before they sellI have to pay for the marketing, £250 a bit steep! Each branch has its own pricing! Keep up the good work…

  12. Recently sold my house in N.Irl for £118,000. Estate agent fee £2,000. On top of this he charged me £120 for a four line letter required by my lender to confirm that if house did not sell rental value would be £500 p/m. I am building a new house so if my house had not sold I would have had to rent it. Not really worried about fee but disappointed with the amount charged for the letter. Your advice or comments would be appreciated. Regards. LB.

  13. i am in the process of choosing an estate agent and to be honest i would rather have my fingernails pulled off. Recently i have had numerous telephone conversations about the house i would like to buy..and found agent to be rude, superior (trying to be anyway) and downright dishonest. Do we really have to give these people our money? If i was spoken to like that in a shop i would walk out. Also when we tried to sell our house previously all we got was a for sale sign..we took the photos and showed people round..tell me again what is it they actually do? Brain surgery? Heart transplants? Teach kids to read? I think we should boycott them all…maybe then they will actually remember they are not that necessary after all.

  14. Hi Leslie,
    This is yet another example of the additional charges some agents seem to throw in as an after thought. We are campaigning to make all estate agents publish all their fees up front so consumers can make informed choices. In regards to your situation consult your contract. If this fee is included there is not much you can do about it.
    Ed, HomeOwners Alliance

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