All you need to know about estate agency fees

What do estate agents do, and why do they charge fees?

Traditional estate agents will take care of many aspects of the home selling process for you, from listing the property for sale, advertising the listing to get the interest of potential buyers, and scheduling and hosting the viewings where buyers come to tour your house or flat.

This can be a great stress relief for many homeowners who either don’t know how to do all of the work involved with selling a home, or who simply need someone else to do it for them.

But estate agents will charge you fees for doing all of this work, although the precise amount of the fees will vary between different estate agencies. The consumer rights advocacy website Which? has a useful summary of what to expect from estate agent charges, noting that the fees are typically in the form of a percentage of whatever final sale price they are able to secure from whoever buys your home.

On average the fees charged by your estate agent are roughly between 1.15 percent and 1.40 percent of the final purchase price, and this figure includes value added tax (VAT). It’s a requirement from The Property Ombudsman, an independent entity that issues rules for estate agents, that the charges they quote you include the amount of VAT you’ll have to pay.

Depending on which estate agent you visit, you might see fees quoted from as low as 1 percent or even less up to 3.5 percent, based on the location of your property and its size. We would advise you to ask as many questions as possible of your estate agent regarding their fees and the work they will be doing to ensure there are no hidden surprises at a later state.

Some estate agents might charge you a fixed flat fee instead of making you pay them a fee that’s based on a specific percentage of whatever final sale price they are able to secure. Homeowners might find this preferable because they’ll known at the start of the process the exact amount that they will have to pay the estate agent. But it’s also possible that having a flat fee might not motivate your estate agent to try as hard as selling a property based off a percentage fee, because they could stand to make more money with the latter option.

Or you might have to pay a fee as a result of a multi-agency agreement, which occurs when you ask several different estate agents to try selling your house or flat — with the estate agent who succeeds in selling your house being the one that you’ll eventually pay. Under these agreements you can expect the overall fee to be slightly higher compared to dealing with one estate agent, with the charge being about 2 percent to 3 percent of your home’s sale price.

Are there any options for lowering estate agent fees or avoiding them altogether?

Once you have decided to use an estate agent to help with your sale, you could ask them to see whether they are willing to negotiate on the total amount of fees they will charge you.

Have an honest and open conversation with your estate agent; ask them to provide a comprehensive list of all of the fees that they expect you to pay for taking care of the sale of your house or flat. And then talk with them about whether they would consider negotiating some or all of those fees down to a lower price. They will never waive the fees completely, but even a slight reduction means you get to keep more of the profit for selling your property.

There is another alternative to paying estate agent fees, which is not using their services and instead selling your house or flat to a quick property buying company. These businesses give homeowners speedy cash offers to buy homes, typically at very competitive rates and never charging any fees — meaning you get to keep all of the profit from the sale of your house.