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 for selling your home vary. Try to gather these facts before booking a valuation and hearing more about the agent’s service offering.
- In terms of typical estate agent fees for selling, estate agents usually charge a percentage fee, which can range from 0.75% to 3.0%+VAT of the agreed selling price depending on the type of contract you opt for with your estate agent. See: How many estate agents should I use?
- The average estate agent fee is 1.42% of the final selling price (inc VAT), according to a July 2018 survey by the Advisory for sole agency.
- 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.
- 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 usually charge fixed fees and are significantly cheaper.
- Ask agents to email standard contract terms. Pay attention to the sole agency lock-in period which varies dramatically across agents (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 your estate agent questions about anything that is unclear.
Compare estate agent fees in 2021
While comparing estate agent fees is important to ensure you don’t pay more than you should, it’s also important to compare estate agents on their performance to find the best estate agent — their success rate in selling and how good they are at achieving the asking price.
Top performing agents that achieve the asking price can be well worth their commission. For example, if a property is listed for £300,000 and the agent achieves this asking price and the commission is 1.42%, you will pay commission of approximately £4,250. But, if another agent charges a lower fee than this or even no fee at all and achieves 98% of the asking price, this has cost you £6000 in a lower achieved sale price (in this instance, you are at least £1750 worse off with the cheaper agent).
Find and compare local estate agents with our free tool: compare typical fees, success rate, speed of sale and track-record achieving asking price
Find and Compare Local Estate AgentsThis form will take you to www.estateagent4me.co.uk for the results
Watch out for additional costs
- Fees are sometimes 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 2.5% fee is 3.0% inc VAT, or £9,000 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% +VAT, rather than 2.5%-3.0% +VAT). 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.
- 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 built or sold in the last 10 years
- 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
Online estate agents may be a cheaper option
If you feel you are paying too much for an estate agent, you can always use an online estate agent for a fraction of the cost with starter packages starting at less than £100. It’s worth comparing what they can offer you. You can compare online estate agent fees, packages, ratings and track-record achieving the asking price with our comparison table.
Estate agent fee calculator
Use our calculator to work out how much commission you will pay your estate agent. Adjust the calculator settings for the commission rate, and use the slider to select your estimated sale price. If you wish, you can see how this compares to ‘fixed fee’ agents like Purple Bricks or Yopa. Otherwise, you can set the ‘fixed fee’ to zero to see the total commission you would pay.
Estate Agent Fee Calculator
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 agent 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 follow 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 more established 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
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
When do 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’.
No sale, no fee
Agents will either charge a flat fee to be paid up front (usually charged by online estate agents) or a “no sale, no fee” commission to be paid only if you sell (usually charged by high street agents).
A no sale, no fee estate agent is great for you as it incentivises the estate agent to sell your property in order to be paid their percentage commission. And if your home doesn’t sell, you pay them nothing. But if your property is worth a lot, then the amount you are paying them, even if the commission charge is a mere 1%, could be several thousands of pounds.
Many online estate agents (e.g. PurpleBricks) have a different way of charging homeowners. Rather than “no sale, no fee”, they charge a fixed upfront fee. This can work out cheaper than paying a percentage of the sale price, but you will have to pay it whether your home sells or not.
For more advice on selling, read our step by step guide
- How do I lower my estate agent fees? What about online agents?
- Estate agent contracts: what to watch for
- How should I choose an estate agent?
- What price should I sell my house for?
- 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
- How to resolve disputes with estate agents
- Rightmove, Zoopla and the rest: which is best?
- Why you should avoid estate agents’ in-house services