Fees charged by estate agents for selling a home can vary massively, but new research suggests that many homeowners could have paid less…
With the current average estate agency fee for a sole agency agreement currently around 1.4% including VAT, rising to closer to 3% for multi-agency (where more than one estate agent is instructed for the same property sale), according to The Advisory, it can add up to quite a hefty cost for homeowners selling their properties.
However, it seems that many sellers could actually have saved themselves some money if they’d questioned the estate agent’s fees or haggled them down, according to the latest report released by housesimple.com.
Room for manoeuvre?
The survey found that almost half (46%) of sellers had reported feeling pressurised by their estate agent, while a huge 82% had accepted the first fee that was offered to them without making any attempt to get a better quote. Of those who agreed first time, 49% said it was because they believed they were getting a good deal, while 41% didn’t realise they could haggle.
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Of all the agency fees forked out by sellers over the past 12 months, housesimple.com calculated that by getting 0.25% shaved off the initial estate agent’s price, a total of £487m could have been saved. If someone selling their home manages to haggle an estate agent down from 1.25% to 1% on a £500,000 property, for example, they’d save £1,250 in fees.
Sam Mitchell, Housesimple’s CEO, said: “The survey highlights how much home sellers could potentially save by negotiating and not taking no for an answer. There is always room for manoeuvre on the fee and an estate agent that is not willing to reduce their rate will need to have a very strong case as to why, particularly if it is significantly higher than other agents are quoting in the area.”
Getting value for money
One in five respondents said they weren’t confident negotiating with the estate agent, and Mitchell adds that agents are “extremely good salespeople” which can make it difficult for the vendor. However, to get the best value for money from a high street agent, it may be worth plucking up the confidence to haggle, or shopping around for cheaper quotes and seeing if agents will match each other.
There has been a growing trend towards using online estate agents in recent years, as many buyers and sellers see it as a cheaper and more transparent route to property transactions, with most charging a flat fee rather than commission. Viewings through online agents can also be agreed at an additional cost, but vendors can arrange viewings themselves instead as another way of saving money.
Mitchell added: “High street agents are living in the past, charging exorbitant fees and not doing enough to justify their meaty commissions. Consumers want value for money, and are, quite rightly, asking ‘why am I paying an agent thousands of pounds for listing a property on Rightmove and managing a few viewings?'”