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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? |
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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.
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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!
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Choosing an estate agent. |
Our top 5 tips below should help you choose
the right agent.
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Top tips for
choosing an agent |
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1. |
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. |
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2. |
Shop around.
Asked for three
independent
valuations and
compare the estate
agents fees.
Negotiate agency
fees and suggest
fixed cost or
sliding scale
charges. |
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3. |
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. |
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4. |
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. |
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5. |
Communicate.
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. |
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