Understanding estate agent fees
Selling your house is a stressful enough experience before any money changes hands, so when it does you’ll want to be sure that you know exactly what to expect.When you‘re selling your house the aim is to make as much money as possible, so any cost that cuts into that profit needs to be clearly understood – it may even help reduce them. This is especially true when it comes to estate agent fees; the better you understand what your money is going towards, the more chance you have of minimising the amount that you pay.
What are estate agent fees?
Estate agent fees are essentially the amount of money that an estate agent will charge you for their services of helping you to sell your house. The estate agent fee often equates to a percentage of the sale price of your house; and in the UK, this will generally be between 1.5% and 4% of the property’s sale price.
There are a number of factors that can vary the amount that an estate agent will take from your profit; the primary determiners are the services that the estate agent provided for you during the selling process and the price that you sold the house for. In other words, you can expect the fee to increase alongside the comparative value of your house.
We’ll take a look at the potential services that an estate agent can provide for home-owners in the next section. The price of your house will depend on the results of a thorough evaluation, which will take into account factors like the condition of the property, and its location.
Keep in mind throughout the process that the field of estate agent is largely unregulated by any external bodies. This means that the fee charged by any single estate agent could differ massively from the fee charged by another. They could charge for different services, or simply charge a higher or lower sum for the same. In essence, it pays to shop around!
What can estate agent fees consist of?
There are a large variety of services that an estate agent will potentially charge you for. Some may not elect to charge you for every service that they provide, and some may not offer all of the services offered by their competitors. Regardless, we have provided a list of potential services below, to give you a better idea of what to expect.
- Marketing costs: Quite possibly the largest out-going cost of any property sale process; a lot of marketing needs to be undertaken in order to efficiently advertise a property’s availability and attributes. This includes the traditional estate agent’s “For Sale” sign outside of the property, web-marketing costs, adverts in newspapers, as well as physical marketing materials such as brochures and leaflets.
- Assessment and analysis of property: Of course, an estate agent can’t market or value a property without having assessed the property in person; measurements must be made, and the condition of the property and it’s furnishings judged. Through this process, an estate agent will be able to start formulating an asking price for your property.
- Further research: For a complete assessment of a property’s worth, it’s also necessary to research the surrounding area in which the property is situated; the distance of important amenities, such as train stations and supermarkets will be taken into account, as will the general attributes of the surrounding community and land.
- Estate agent’s time:Seemingly an obvious cost, but this takes into account a number of things, including time spent researching the housing market, and time spent negotiating with buyers. You are well within your rights to do either of these tasks yourself, removing such an important task from the hands of party that may have their own best interests at heart, though in some cases the expert knowledge of an estate agent may put them in better stead to achieving your goals.
- Travel: A simple one; reimbursing the estate agent for the cost of their travel.
- Tours and monitoring: This takes into account the estate agent’s work in showing interested parties around your property, and additional time spent monitoring offers for the same.
If it’s not immediately clear what your chosen estate agent is offering in exchange for your payment, it’s important to ask; you’ll have no way of knowing if you’re being overcharged if you don’t know what your money is going towards. When you know all the facts, you’ll be better able to negotiate, potentially saving yourself a lot of money.