Using an estate agent to sell a property makes the whole process a lot simpler and faster. It also minimises the chances of running into unexpected issues halfway through. However, the services of an estate agent come at a price.
How Much Are Estate Agent Fees in London?
Estate agent fees can vary according to a range of different factors. Property sellers today are no longer restricted to using conventional high-street estate agents to sell their homes. There are now other options, including online estate agents and even apps that aim to cut out the middle man and enable homeowners to sell their properties directly to potential buyers. These other options might sound tempting because they circumvent those pesky estate agents’ fees. But those fees are usually a small price to pay for the peace of mind that comes with using a reputable estate agent to handle your property sale.
According to TheAdvisory, a house-selling website, the average estate agent fee is 1.42% of the final selling price of a property (including VAT). Charges like these that agents calculate as a percentage of the final selling price are known as a commission. 1.42% is the average commission rate, but this number can vary. Some estate agents charge a commission of less than 1%, while others charge as much as 3.5% of the final sale price.
Before 2016, estate agents would often quote their fees without VAT taken into account. It was left up to the seller to factor in the 20% VAT rate. However, the rules have changed. Any quotes presented to you should now include VAT.
What Are Estate Agent Management Fees London?
Many estate agents will also act as letting agents. Modern estate agencies sometimes offer the kind of property management services that used to be associated with letting agents. The management fees that an estate agent charges will depend on precisely what services they are rendering for you.
For example, the most basic level of property management is a let-only service. A let-only service means that the estate agents will market the property on your behalf and will find and vet prospective tenants for you. This service is useful for landlords who want to take a more hands-off approach to their rental properties.
However, while a let-only service will make finding tenants and maintaining occupancy easier, you will still be responsible for managing everything else yourself. Landlords who want to be able to sit back and let the money roll in with minimal effort on their part will want a more comprehensive property management service.
In the case of a let-only service, the fees are usually less than 10% of the rent revenue. On the other hand, full property management services tend to be in the 15-20% range. There is a lot of variability in these figures, and the fees will generally be higher for properties in London.
Should You Choose The Lowest Estate Agent Fees London When Selling?
When you are selling a property, it is only natural to want to take home as much money from the sale as possible. Seeking out an estate agency that can offer you the lowest fees around might seem like a no-brainer. However, it is essential to remember that there is a reason that estate agents charge those fees, to begin with. If you are paying less in fees, it implies that you aren’t going to receive the same level of service as someone who is paying more than you are.
With estate agents, as with anything else in life, the more you are willing to pay, the better the quality of service you can expect. The best estate agents around will charge a higher premium for their services because they know that they can provide a service that justifies the price tag.
When you are deciding whether an estate agent’s fees are worth it, you need to look at more than just the rate that they are charging. To ascertain whether that rate is justified and reasonable, you need to consider a range of other factors. Look closely at exactly what services the agency can provide and what their history is. It is worth paying a little bit more in fees if it makes you more confident about the quality of the agency you opt for.
What Are The Average Estate Agent Fees In London When Using An Online Estate Agency?
Traditional estate agents will usually charge a fee that is a percentage of the final sale price of a property. Online estate agents, on the other hand, tend to charge fixed fees. These fees are sometimes tied to a valuation of the property. In practice, you are still paying a percentage of your home’s value. The difference is that the price is the same regardless of how much your home sells for.
The fees vary between estate agents and can range from £99 to around £1500. Some online estate agents will charge more for properties in London.
How To Save Money On Average London Estate Agent Fees
If your main goal when selling a property is to keep the fees you pay as low as possible, you might want to consider using an online estate agent instead. Online estate agents generally charge their fees as a flat-rate, rather than as a commission on the final sale price.
Another way of potentially reducing your fees is good old fashioned haggling. It is generally advisable to have several estate agents view and value your property, obtaining a quote from each one. Armed with these quotes and your own research about the agency’s past performance, you will be in a position to judge whether their offer to you is a fair one. Some estate agents will be rigid in their fee structure and won’t budge. But many will be willing to haggle with you to some degree.
What Are Estate Agent Letting Fees In London?
Not all estate agents also act as letting agents. However, a growing number have embraced this as an additional revenue stream and a way of enhancing the service that they are offering. The letting fees that you will pay to an estate agent will depend on the level of service that they are providing to you.
Under a let-only service, the letting agent will market your property and find and vet tenants for you. They will also manage the administrative side of things between you and your tenants. The fees for this service usually equate to a percentage of the rental income.
Estate Agent Rental Fees London
If you want your estate agent to take responsibility for managing your property for you, the fees can be much higher than a to-let service. Whether these fees are worth it or not will depend on what your circumstances are. If you choose the more comprehensive service, you will keep less of the rent. However, you won’t have to do as much work. Suppose you have other commitments or just generally don’t want to be responsible for managing everything on a day to day basis. In that case, a full property management service is the way to go.
London Estate Agent Fees Selling Price
Most estate agents will calculate their fees as a percentage of the final selling price. The formula for calculating your fees will be set out in the contract that you sign when you hire the agent. You must read the contract carefully. If there is any part of it that you aren’t sure about or don’t understand, seek clarification immediately.
How Much Are Typical Estate Agent Fees In London?
The typical fees that you can expect to pay will vary according to property type. For high-value properties, estate agents are often more flexible about their fees and will accept a lower rate than usual. It is always worth negotiating with estate agents before you agree to their final terms. Most estate agents will have some flexibility in the right circumstances. If you have a high-value property to sell, you will have more negotiating power.
In addition to the fees that we have outlined above, you should also be on the lookout for other additional costs that estate agents sometimes levy against sellers. If you aren’t expecting these charges, they can come as a severe shock. Remember, since 2016, estate agents have been obligated to include VAT whenever they give you a quote for fees. However, it is worth double-checking the agent doesn’t explicitly tell you that the rates estate agents quote you include VAT.
Using an online estate agent is a better option for some people. If you prefer the idea of paying a fixed rate upfront to sell your home instead of paying a percentage of your final sale price, an online estate agent is the way to go.
Regardless of the estate agent that you choose, make sure you are clear about how much they charge upfront. You shouldn’t just automatically jump on the lowest rates available. But you also shouldn’t pay more than you need to.