The HomeOwners Alliance guide to:
How much should I pay the
estate agent?
Estate agents’ fees vary enormously, and add thousands of pounds to the cost of selling
a home. It is difficult to avoid estate agents fees, but understanding them can help you
haggle successfully – and save you serious money
The basics
 Overwhelmingly, estate agents charge a percentage fee, which can be anywhere between 0.75% and
3.5% of the price you sell your home. A survey for Which? found the national average was 1.8%
 You should aim to get a fee that is 1%
 For higher value properties – such as over £500,000 – agents are often prepared to accept even lower
fees, and perhaps go below 1%
 The upside for the seller in the fee structure is that the estate agent has an incentive to sell the property
for as much as possible, so they get higher commission
 Fees can end up being tens of thousands of pounds for more expensive homes – which many sellers will
feel is a lot of money for not much work. There is perhaps a reason that estate agents tend to drive such
flash cars
 Occasionally, particularly for cheaper properties, estate agents charge a set fee, which can end up a high
percentage of the total property cost. Online estate agents also often charge set fees
 Fees usually exclude VAT, which is currently 20%. So:
 a 1% fee is 1.2% inc VAT, or £3600 on a £300,000 home
 a 3% fee is 3.6% inc VAT, or £10,800 on a £300,000 home
 If you appoint a sole agent, fees are lower than if you appoint a multiple agent (normally in the range of
1% -2%, rather than 2.5%-3.5%)
 The estate agent is required by law to tell you what is included in the fee – does it include preparing the
property details, advertising costs, and For Sale boards? Ideally, you should not face any added costs
 More expensive estate agents are not necessarily better
 There are regional variations, with estate agency fees higher usually in London than elsewhere (even
though properties are also far more expensive)
Get the agents to compete on cost – and haggle over the fee!
It isn’t very British to haggle, but in a market where sellers are in short supply, you will probably find agents
surprisingly willing to cut their fees to get properties on their books. If you are going for sole agency, you
should aim for a fee of 1% - or even less for high value properties
 Get quotes from at least three different estate agents, and ask them what their fees are for a sole agency
agreement, and if there are any other costs. Make sure you tell each estate agents that you are seeing
other agents, so they know they need to compete. You will probably get three different fees, although
estate agents sometimes effectively operate in local cartels all charging the same fee
 Estate agents often ask for 2% or 2.5% for being sole agent, since they know that most sellers won’t try
to haggle. But that doesn’t mean they aren’t open to negotiation
 Go back to the more expensive agents, and tell them the others are offering lower fees. Tell them that
you are expecting to pay only 1%
 Small estate agents are often more flexible on negotiating commission downwards than large chains,
which often operate nationwide policies
The HomeOwners Alliance guide to:
2
How to afford to buy your home
 Agents who are trying to win business to increase their market share in an area will probably be more
open to negotiation than the leading estate agent
 If you insist on putting the property on at an unrealistically high price, the estate agent is likely to be less
willing to accept a lower fee because it will be harder to sell
 If you achieve 1% you can be pleased with yourself – you might have to settle for higher fees
Give the agents sliding scales to get a higher sale price
Sometimes estate agents agree to a sliding scale of commission, to give them a big incentive to sell the
property at a higher price. This more closely aligns their interests with yours, getting around the problem
that agents are often just keen to get the sale, even at a low price, so they can move on to selling the next
property to earn another commission. You will probably have to offer the agent a sliding scale, as they are
unlikely to suggest it themselves.
For example, if you think your home is worth about £300,000, you could suggest:
 1% fee if they sell your home for under £275,000
 1.25% if they sell it between £275,000 and £299,999
 1.5% if they sell it between £300,000 and £325,000
 1.75% if they sell it for over £325,000
You could suggest the sliding scale if you think an agent is insisting on too high fees. In the example
above, if an agent is insisting on 1.75%, you could agree to that but only if they sell it above £325,000.
Online estate agents
If you still feel you are paying too much for an estate agent, you can always use an online estate agent for
a fraction of the cost – as little as 0.5% or even £200. See our guide How do I choose an estate agent?
When should I pay the estate agent?
Unless you made the mistake of signing a “ready, willing and able purchaser” contract with the estate agent
(see our guide How do I choose an estate agent?), then fees normally become due when contracts are
exchanged. However, you don’t pay until the sale is actually completed. You should never pay an estate
agent before you have the money in the bank, or if they do not they sell your house for you
Links:
How do I choose an estate agent?
How many estate agents should I use?
Should I sell my home myself?
Zoopla http://www.zoopla.co.uk/
Rightmove http://www.rightmove.co.uk/
Primelocation http://www.primelocation.com/
Contact
If you’d like more information contact:
T +44 (0)20 8292 0361
M +44 (0)7947 240293
E [email protected]
HomeOwners Alliance Limited
www.hoa.org.uk
The HomeOwners Alliance guide to:
How to afford to buy your home
Legal disclaimner: The information contained in this guide should not be regarded or relied upon as a complete or authoritative
statement of the law. HomeOwners Alliance makes every effort to ensure that the information is accurate; but it accepts no liability
for inaccuracies, or the consequences of following our advice. If you think that you have a legal problem, you should get advice.
© HomeOwners Alliance 2012
3