How much does an Estate Agent cost?

What a question! And it is of course one of the first questions a homeowner asks when they are looking to sell their home.

Estate agents are probably asked this question dozens of times a week, and here at Nock Deighton it often comes up in the first few minutes of any conversation with prospective clients.

But we understand. Price (along with lots of other things) does matter when it comes to selling your house.

How much a service costs naturally influences your decisions and what you hope to achieve in the long run.

As you can imagine though, the problem with answering this question is that every home and every client is different with differing hopes and expectations that need to be met.

That said, Michael Nettleton, sales and marketing director here at Nock Deighton, gives some price ranges to give you an idea as to what most people will spend when selling their house.

First and foremost, we have the question of the EPC (Energy Performance Certificate). These are a legal requirement and will generally cost in the region of £100 + VAT.  In addition, most providers will also include a floor plan of the property in their service which is great for applicants to use when looking at your home. It’s also useful to note that an EPC is not required for listed properties.

In preparation for getting your home on the the market, It would also be prudent to invest in a third party professional photographer. With the old cliche "you never get a second chance to make a first impression", it’s absolutely crucial that images of your home are presented to the highest standard. With even the most humble home worth upwards of £100,000, investing an extra £150 in a professional photographer can make you thousands of pounds in the long run.

The big decision is your choice of agent. The market is awash with with agents of varying skills, abilities and business models. Included in that mix are the new breed of online agents who offer something different altogether.

Let’s look at how online agents work their charges out. Their business model is based on a very different type of sale.  A traditional sale meant the money was paid upon exchange of contracts, but with the new breed of online agents the money is paid upfront with no link to performance.

This business model is geared towards listing houses, so it's not necessarily mission critical to actually agree sales on them. Then add some small print and significant up-charging of additional services (having a ‘For Sale’ board, premium advertising on Rightmove, solicitors referral fees of £300-£500). It’s a very interesting model and probably only right for a small demographic of home sellers.

Like all things though, what all agents are actually selling is time. The fee paid to the online agents is purchasing enough time to list your home on the market and upload it to Rightmove and Zoopla. This will be enough for some, but will perhaps come with a financial health warning to most.

Looking at the traditional ‘High Street’ agents, fees can vary from anything between 0.75% to 1.5% + VAT made payable upon exchange of contracts (i.e. when you have a legally binding contract with the person buying your house).

Broadly speaking, agencies tend to fall into one of two categories: volume-based or service-based. Both versions have their merits, and both can be equally profitable and effective for the owner of the agency.

At the lower end of the fee spectrum, the agency will need to cut its cloth accordingly and the sales team will be targeted with handling a larger number of clients per head. Whilst the willingness will undoubtedly be there, the ability to take a proactive approach to the sale and marketing of your home will be difficult. Saving money on fees can be easy, but be careful that such a saving isn't offset by a disappointing sale price.

At the top end of the market are those agents charging 1.5% + VAT. With a much more bespoke and personal service, such an agent will look to be much more proactive, skilled and will take the time to achieve for you the best results possible. A touch more expensive perhaps, but a skilled negotiator can easily add 5% value to the final sale price realized. It is no coincidence that wealthy people tend to gravitate to the better rather than cheaper agents.

From the outside, many agents can look the same, but if unclear, the fees quoted will generally give a good indication of where the agency sits on this spectrum.

If you would like to get in touch and discuss making a choice of agency, please feel free to get in touch on 01952 432533 as I have a number of hints and tips to look for when making the decision.