Selling your home can be one of the most stressed things we do. It's regularly featured on top ten lists of the most stressful events we put ourselves through in life. You have to find the right place to move to, prepare yourself an your family for the emotional change of moving and leaving what you've known, perhaps for many years. You need to sort removal companies, organise finance, apply to new schools, transfer to new doctors, find out best routes to drive in and out of town. All of this along with keeping your own home clean and tidy and ready for potential buyers to come and view. Having an estate agent to help advertise your home and perhaps help with those viewings is something many of us do, put that comes with a cost. How much can we expect to pay for estate agent commission?
How Much Are Estate Agent Fees?
Typical estate agent fees vary from one agent to another. The fees charged might also change within an estate agent due to the amount that the house is on the market for. For example, if the property if worth over £500k, you might be given a lower commission rate because they'll get getting a decent payout when the property sells. There has been an increase in the world of estate agency with new companies doing things different. Avoiding commission to make themselves stand out in a traditional market. This means you simply pay a fixed fee, regardless of how much your house sells for. Of course, there are pros and cons of both a commission rate and a fixed fee. Let's look at the benefits of going down one route over another.
Benefits Of Commission
When you're working with an estate agent who charges commission, you know they will strive to get you the best price. The best price for you, means the best price for them. You need to double check whether the commission rate they charge includes VAT. Get the facts and figures from each company before signing on with one of them to sell your home. One of them might offer a great rate of 1% commission, but only include that there will be VAT on top in the small print. That is 1.2% at the end of the day. That 0.2% is almost an extra grand on a £450k house. Be confident enough to negotiate fees. As in many areas of business, the fee on the first email or phone call will likely not be their best price.
You might want to do the viewings yourself as you work from home so that is less work for the agents do to. They are usually willing to negotiate so ensure you ask for their best figures. If you appoint a sole agent you will likely get even better commission rates. Be sure you read all the small print and check there are no other extra fees that the company charge and what you're actually paying for (professional photography etc) before signing on the dotted line.
Benefits Of A Fixed Fee
A fixed fee company is great because you know exactly how much you'll be paying when your home sells. There is no variation depending on how much the house sells for. A lot of these fixed fee estate agents operate online which is how they can offer lower fixed rates. A fixed fee of £800 for selling a £450k house is 0.177%, a lot less than a 1% commission rate. However if you're selling a £60k property, an £800 fee works out at 1.33% of the house price, so you'd be better going with an estate agent commission of 1%.
Of course, there is no incentive for the fixed fee agent to go above and beyond to try and sell your home for more money. It's not going to make an difference to how much they'll earn. They'll be getting the same pay regardless so it just has to sell for them to get paid. Your property will likely be listed on websites including Rightmove. You need to ensure you know where it will be listed before you sign up. Each case is different and you need to work out what works best for you.
Could You Do It Yourself?
Maybe you could avoid estate agent commission and fees completely? How does an extra £1000 towards the moving to your new home sound? Maybe for buying new furniture or helping to redecorate the kitchen? Some people like being involved in the whole process and cutting out an estate agent could be one of the best things you've done. It might even lead to a new career! There are a number of different “for sale by owner” websites which you can list your home on. You'll need to do the photography yourself, write the description yourself and arrange viewings yourself. Setting a price and making the property look sell-able are easy. However you need to be confident about enter negotiations too.
You should accept an offer that you're happy with verbally first. Then follow it up by email and finally by post. It is important to remember that there is nothing legally binding until the contracts are exchanged. That could be in perhaps a month or two. You'll also need to prepare yourself fro renegotiation as these can easily crop up after surveys have been done. Remember that you don't have to lower the cost if you're unhappy. Sometimes buyers want a better deal which is a worse deal for you. Stand your ground and be prepared to say no should you not be happy.
As you can see, the estate agent commission varies depending on what route you take to selling your house. Typical estate agent fees vary across the board and you need to be happy with the decision you make. Of course, you might decide that the clean, tidy and beautiful looking house you've created to take photographs of, is actually where you want to be. Make sure there are no withdrawal fees if you do change your mind about selling up. It can be a really stressful time but if you do what you feel is right for you, that stress level will lower and you'll be well on the way to that new dream home.