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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: Fees & Contract Terms

  • Estate agent fees and contract terms vary.  Try to gather these facts before booking a valuation and hearing more about the agent’s service offering.
  • In terms of fees, overwhelmingly, estate agents charge a percentage fee, which can be anywhere between 0.75% and 3.5% of the agreed selling price for  your home depending on the type of contract you opt for with your estate agent. Our recent mystery shopping research of agents willing to disclose their standard fee indicated the average fee for a sole agency contract was 1.5% + VAT, similarly, a survey for Which? found the national average was 1.8% + VAT
  • You should aim to get a fee that is 1% + VAT for a sole agency contract (on the agreed sale price)
  • For higher value properties – such as over £500,000 – agents are often prepared to accept even lower fees, and perhaps go below 1% + VAT.
  • Do not be shy about negotiating fees, most agents are prepared to be flexible on their commission
  • 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
  • Ask agents to email standard contract terms. Pay attention to the sole agency lock in period which varies dramatically across agents and is very long in some instances (4 weeks or 12 weeks are the most popular terms); more than this is unnecessary
  • Review and amend the estate agent contract before signing and ask questions or seek independent advice about anything that is unclear.  Unsure about your contract? At the HomeOwners Alliance, we can help. Find out more about the benefits of joining the HomeOwners Alliance.

Watch out for additional costs

  • Fees are often quoted excluding 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. Estate agents should clearly state whether fees include or exclude VAT.  If the agent does not say upfront, be sure to check this point. In their contract, agents should express their fee as an actual amount, based on the asking price, as required by The Property Ombudsman — note the actual commission you pay will be calculated on the agreed selling price which may be slightly higher or lower than this
  • If you appoint a sole agent, fees are lower than if you appoint a multiple agent (normally in the range of 1%-2.5%, rather than 2.5%-3.5%). WARNING: if you agree sole agency make sure you read the contract carefully. If, further on down the road, you instruct another agent ensure that the original contract has been fully terminated so you don’t have to pay commission to both agents. For an explanation of types of contracts and what to watch for see our Estate agent contracts guide
  • 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 such as placement on property portals, and For Sale boards? Ideally, you should not face any added costs and most agents cover these services with their commission, so do shop around if you are being quoted additional up-front registration fees, fees for photos, fees for advertising or marketing incentive fees. You should not need to pay these
  • Additionally, there should be ‘no withdrawal fees’ if you change your mind and decide not to sell your property for any reason
  • Most agents can arrange for an energy performance certificate (EPC) to be done on your behalf, and this should be your only up-front cost. Shop around as we think you can find cheaper elsewhere. There is no obligation to use the estate agent provider and you may already have a valid EPC if the property has been recently built or sold
  • Be aware that you are under no obligation to use any in-house estate agent services (such as mortgages or conveyancing).  Be sure to compare rates and service ratings as estate agents almost always earn a commission on these extra services

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

  • More expensive estate agents are not necessarily better
  • 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.
  • Estate agents often ask for 1.5% up to 2.5% (+VAT) 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% (+VAT)
  • 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% (+VAT) 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 or faster sale

Sometimes estate agents agree to a sliding scale of commission, to give them a big incentive to sell the property at a higher price.

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

You can also use incentives to reward the speed of the sale, if a quick sale is important

Online estate agents may be a cheaper option

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. 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, 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. Agents usually refer to this as ‘no sale, no fee’.

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

Have a specific issue or need help, join the HomeOwners Alliance and take advantage of our Home Helpline, Ask an Expert Service, Legal Advice Line and exclusive Conveyancing discount

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31 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.

  2. 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!

  3. 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

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

  5. 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?

  6. 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

  7. 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

  8. 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.

  9. 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

  10. 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…

  11. 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.

  12. 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.

  13. 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

  14. I’ve recently had to pull out of the sale of my house , prior to contract exchange , but my estate agent seems to think I am still liable for their commission. Is this normal or indeed legal.

  15. I recently purchased a house via informal tender with a ‘buyers premium’ attached of 2%. The offer process was not progressed as a tender, but as a simple offer / acceptance as you would normally expect in a private treaty. As the purchaser I did not sign a contract with the Estate Agent, but had the 2% fee passed to me so that the vendor did not have to pay EA fees.
    I am now challenging the 2% fee as not worth the service I received – the EA did not help the process in any way, I did not get chance to negotiate and indeed did not agree those terms other than tacitly agreeing to pay a buyers premium by proceeding with the purchase. Indeed, I believe the advertising of the property was misleading as the sale was not conducted as a tender; even the vendors solicitor referred to my paying their client’s estate agents fees.
    I am happy to pay 1.2% which I believe is a reflection of current fees hereabouts, and is a more than fair reflection of the lack of effort the EA put into getting the sale through. Do I have a leg to stand on in refusing to pay the other 0.8%?

  16. Hi Allen, We agree that doesn’t sound right. You need to look at your contract to see what you signed up to. You may be liable for marketing and other costs but only if they were stated upfront and in your contract.

    If you would like more detailed advice then please consider joining us. Our members can put their questions to our panel of experts to get a response within 48 hours, can speak to us for professional unbiased advice on our Home HelpLine and have access to our Legal HelpLine. To benefit from these and other services now, join us for just £29. Simply click on the pink Join button at the top of this page.

    Cheers, HomeOwners Alliance

  17. Dear JR, Sorry to hear about the situation you are in. Have you proposed the 1.2% to the estate agent? Did you sign a contract agreeing to the 2%? Without more specific information in this unique case we are unable advise.

    You may want to consider joining us. Our members have access to a free legal phonecall and can put their questions to our panel of experts to get a response within 48 hours.

    HomeOwners Alliance

  18. We placed a house on the market in 2008 this never sold. We took this off the market after a sale fell through (the intertested buyers did not have the money to purchase.) We where stuggling finacially and need to rent out the porperty so advertised this ourselves. The same couple approached us to rent out the property in March 2009 and did so for just over a year. They went on to purchase the porperty in April 2010. We have recieved a letter from the estate agents this week (August 2013) saying we owe them £2000 for them finding the buyer! (The house sold for approx 220k) We dont have this kind of money and dont believe we signed a contract. Advice please.

  19. I’ve been dabbling with property for a few years now. Over those years I have come to the conclusion that estate agents are expensive and difficult to deal with. What’s stopping me setting up setting up my own property sales company (sorry, estate agency) in my local area doing all the things estate agents do, but without a shop on the high street and all the unnecessary trimmings that come with such a service? I could advertise a flat rate of commission of approximately <1% to undercut them and then use the internet to promote the property and meet face to face when needed. Or am I being over simplistic??? Norm

  20. Maria
    Thanks for getting in touch. That does sound incredible! You will want to see our Expert’s answer in a similar case here. I would phone the estate agents and ask them to send you a copy of your signed contract and take it from there. If there isn’t one then that’s the end of the matter. If you did by chance sign one then you will need to check the small print and seek legal advice to fight your corner. Our members get a free legal phone call if that would be a helpful starting point – see our services page for more information. In the meantime, good luck.

  21. Last year I sold my flat in Surrey. I had 4 different Estate Agents round to value it and listen to all their waffle about how I should choose them, and their differing valuations (£40k difference between the highest and lowest valuation!), I decided that none of them warranted a fee of around £6k to sell my property.

    I decided I’d have a go at marketing my property myself. I took photos and wrote up a description of the property in the style of some top end estate agents (not your common high street agents) and posted the details on eBay and Gumtree. Within 6 weeks I had sold my flat for more than any valuation from any of the Estate Agents who had previously valued the property and had saved myself their excessive fees!

    I’d thoroughly recommend trying to sell the property yourself – its worth a try and what have you got to loose!?

  22. Hi I am concerned about the amount of money the estate agents have taken from my mom the house sold fir 80, 000 and they took a whopping 4, 000 off my mom which means after a nasty ex and repayment to the mortgage mom was left with a ridiculous 7, 250 is there anything we can do?

  23. I sincerely agree with the comments published – Just sold my house which took over a year – a very arrogant agent who seemed to be on the buyers side at all times – a long story ! and then charged an extortionate rate of commission – and why then VAT on top ! are estate agents regulated at all ? I think all these comments should be sent to parliament – would they do anything to change things ? I am a widowed pensioner so every penny is precious – I dont think agents deserve that kind of money for the amount of work they don;t do !

  24. I advertised my property with an estate agent recently on the basis that he would be taking a property that we liked and made an offer for off the market as agreed with the seller. The agent has now sold the property to another buyer (STC) without informing us and still expecting us to sell our property through them. by breaching this agreement, with evidence on TV of the same agent making the same verbal agreement to someone else as shown on channel 4 (undercover agents). Infact the house was shown on the TV programme being shown to another buyer after we have made an offer and the buyer has accepted. Can we cancel the contract based on this evidence?

  25. market with the agent.
    hi.

    my partner has her property on the market, has an estate agents board to the front, has had plenty of viewings in the month it has been on the agent. over the christmas period someone who had not been introduced via the agent knocked the front door and was shown around by us, their daughter is coming to view the property today. if this results in an acceptable offer being made to us, and in view of the fact that we did both the viewing and the negotiation, does she still have to pay the estate agents fee.

  26. How does the fee vary if it’s a sell vs a buy of a property? I am currently a buyer and was under the impression (no evidence yet!) that the fee was small or could even be zero (i.e the seller pays their agent for selling the home, and I could conceivably find and buy the home without an estate agent?). Please advise. Regards, Victor

  27. Seems the tide is turning and the courts are taking rogue estate agents to task. Interesting article on estate agents today highlights how it is possible to fight back and win against unfair claims for commission – http://i8it.ly/2eFJs6 – Know your rights I say!

  28. Hi.
    My husband and I are joint owners of a flat. My husband signed a confirmation of instruction which included the fees to be paid if the property is sold. I did not sign this and am not happy with the fees. Does the fact I’ve not signed this make the contract meaningless?

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