Estate agents fees – what to watch for
Make sure you are in the strongest possible position to negotiate with estate agents by reading Jon Middleton's top tips
May 1, 2013
How should the Estate Agent be informing me about their fees?
The Estate Agent Act 1979 requires the Estate Agent to give you information about how they charge for their service and the circumstances in which you will need to pay the charges. They are required to give you this information in writing before there is an agency contract, alongside:
- An explanation of terms, legibly and clearly
- Additional information on services the Estate Agent might give buyers
- An explanation of the terms of the commission payment
Charges should be given as an amount. For example – £4,500 + VAT. Or they should be given in a way that allows the final fee to be calculated, such as 2.5% of the selling price + VAT
If there are any additional chargeable costs such as a brochure, advertising or For Sale boards they also need to be set out in advance
Things to watch out for
- Estate Agents fees are subject to VAT (currently 20%) so make sure you have considered this in your calculation of the overall total cost.
- The final percentage commission is usually based upon the sale price. It is only at the point when you have exchanged contracts and the sale is legally binding that you will know the absolute final total cost
- If you choose an Estate Agent that uses a commission based charging system and your house is worth more than the average you will be paying more for the same service.
Can I negotiate Estate Agent fees?
Yes you should absolutely negotiate fees. You’re about to spend thousands of pounds so do your normal due diligence of inquiring with a number of Estate Agents about their fees and services.
This blog was produced by Move to Private Property which promotes the choice of buying and selling property on the private market.
Read more here…. http://mtppblog.co.uk/commission-our-top-9-facts-figures-and-why-you-shouldnt-pay-it/