Estate agents charge a fee for services rendered, usually facilitation of the sale of your property. Their fees is often a commission of the sold price hence tends to vary significantly. Consequently, this adds up to the cost of selling your house.
Unfortunately, estate agent fees cannot be avoided. However, you will do well to understand them so that you can haggle from an informed point of view and save a good sum. Here are some of the basics of estate agent fees and contract terms that you need to understand:
- Estate agent contract terms and fees vary therefore, you will do well to gather facts before requesting a valuation as well as find out more about the service a particular estate agent is offering.
- Estate agents charge a percentage fee of the selling price of your property that can be between 0.75% and 3.0% + VAT depending on the type of contract that you have opted for. Generally, you should aim for a fee of 1% +VAT in the case of sole agency contract.
- For properties of higher value that is more than £500,000, agents are usually ready to accept lower fees and even go below the 1% fee +VAT. Therefore, do not be shy from negotiating the fees, as most of the agents are flexible.
- If you need to sell quickly, don’t be put off by seeking a cash buyer. Many estate agents will try to put you off the idea, however you can guarantee yourself a sale in 7 days. The best company to sell house fast is a genuine cash buyer as they can complete on a sale in days.
- In some cases, especially for properties that are cheaper, estate agents will charge a determined fee. You need to beware of this as it can end up as a high of the total cost of the property. This is particularly common among the online estate agents.
- Think about doing some repairs before you ask your agent around to view. There is always a better chance of an agent taking you on their books at a decent asking price if you have your property in a high standard. This may include repairs, painting and decorating or even replacing cheap kitchen worktops to more expensive ones.
It is important to ask your estate agent to send you the contract terms on email. This way you can read through carefully while paying attention to the sole agency lock in period that varies dramatically across agents and is lengthy in some cases. The most popular lock in period is 4 to 12 weeks. Any period longer than this is unnecessary.
You will do well to read and amend the estate agent contract, ask questions and seek independent advice before signing the contract.
When should you pay the Estate Agent?
Estate agent fees is usually due when the contracts are exchanged except in the case of a “ready, willing and able purchaser” contract.
Even then, you do not pay until when the completion of the contract. In fact, you should never pay estate agents before money has been transferred to your bank account or if the agent does not sell the house for you as the agents refer to this as no sale, no fee.