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Despite their dubious reputation, by far the most popular way of selling a home is through an estate agent.
A good agent can help you attract the right buyer and achieve a good price for your home, but are the high agency fees always justified?
| || Estate agents fees & valuations. |
Property valuations can vary tremendously so its important to seek the opinion of more than one agent before you commit to a figure for your home. If you have a figure in mind don't be afraid to make a suggestion. If you think your home is special then someone else will, and remember it's easier to reduce the price than increase it once advertised.
As with their valuations, estate agent fees can vary dramatically, ranging from 0.5 percent to around 4 percent for multi agency. Estate agents fees are normally lower for sole agency contracts, but even these lower fees should be negotiated. It's worth speaking to at least 3 estate agents to compare fee levels and policies.
| || Negotiating estate agent fees |
Reasons to negotiate estate agency fees
In the past the vast majority of agents have charged for their services based on a the value of your property. This may seem a little odd as expensive homes rarely cost more to market than cheaper ones. The estate agent shouldn't need to work any harder to sell a property with a higher value, so why is the agency fee higher? If your home is worth over £250,000 you may be able to negotiate a much lower fee.
Historically house values have increased steadily over the the long term, so agency fees have also benefitted from a general uplift over the years, With many estate agents charging the same percentage fee now as they did 10 years ago, it only seems appropriate to negotiate estate agents fees when you come to sell your home.
So whatever the value of your home, there are strong arguments for negotiating the estate agents fee which could save money to spend on the nice things!
Fixed rates & ceiling fees
A good way to negotiate an agent's fees is to suggest a fixed rate or ceiling fee. Particularly appropriate for owners of more expensive properties, a ceiling fee can be suggested as a much fairer charging method.
A ceiling fee of £2500 would mean that no matter how much you end up selling for, the agent would get no more than £2500 commission. So even if the estate agent normally charges a low rate of 1.0%, if your property sold for £350,000 a ceiling fee of £2500 would save £1000 compared to their normal fee of £3500!
Estate agents fees on a sliding scale
Another effective way to negotiate a lower estate agency fee is to propose a sliding scale charge which relates to the final sale price of your home.
For example if your property sells for over £200,000, the agreed rate should be 1.5%, a figure between £190,000 and £200,000 the agency fee should be 1.3% and selling for less than £190,000 the estate agent's charge should be just 1.1%.
Sliding scale estate agents fees have the added advantage of motivating the agent to achieve a higher price for your home. If you don't have much luck negotiating a fee initially just remember there are a large number of agents to choose from. So stick to your guns, have a clear proposal in mind, and you'll eventually get a great deal!
| || Choosing an estate agent. |
Our top 5 tips below should help you choose the right agent.
Top tips for choosing an agent
Check an agents credentials.
If the agent is a member of the Property Ombudsman Scheme you'll have a free resource if you need to make a complaint. An agent who is a member of National Association of Estate Agents (NAEA) and the Royal Institute of Chartered Surveyors is bound by strict codes of conduct by the UK's top professional bodies.
Asked for three independent valuations and compare the estate agents fees. Negotiate agency fees and suggest fixed cost or sliding scale charges.
Read the contract carefully.
Never sign up to anything without reading the small print. The contract terms will be largely determined by how quickly you want to sell your home, but a multi agency contract will cost you more. If you decide to opt for sole agency make sure you understand the minimum term ( eg 3 months) and notice period (eg 2 weeks). With Sole agency contracts, do not be tempted to switch agents within a contract period as you could mend up paying additional fees.
Check Marketing Details.
Once you've selected an agent, ask to see the property brochure before your home is marketed. You may want to change some of the wording and there may be attractive features which need highlighting. You might have some nicer pictures the agent can use, for example taken on a sunny day or from a different angle.
Speak to your selected agent at regular intervals and ask for viewing feedback. There may be easy things you could do to improve the prospects of selling. If you think you're not getting many viewings, ask the agent why, it may be related to the price. Once a buyer has been found the agent should give you regular updates leading up to exchange of contracts. The agent should also be able to give you an insight into what's happening further up or down the chain! Estate agents fees are normally invoiced at exchange of contracts and are payable on completion.