On every high street in Britain, you’ll see at least one estate agent or two. It’s long been a large and lucrative industry. Between June 2019 and February 2020 (i.e. just prior to the Covid-19 pandemic), there were roughly 100,000 residential property transactions taking place in the UK each month, which works out at 1.2 million per year.
So it makes sense that we see so many estate agents and so many branches: the money is there for the taking.
How much do estate agents charge for selling a property?
Estate agents usually charge a fee of between 1% and 3% of your property’s final sale price, with VAT coming on top of that. It is true that you only pay the fee if your property sells, which means you won’t stand to lose any money – but even so, it’s a lot of money.
If you sell your house for £200,000 through an estate agent that charges a 2% fee, you’ll owe them £4,000 plus VAT.
In the same scenario, a 3% fee would come to £6,000, whereas a 1% fee would come to £2,000.
Why is it so expensive?
The reason estate agents charge you is to cover the costs for the administrative duties they carry out, the time they spend doing those administrative duties.
In the case of traditional estate agents (i.e. those on the high street, with physical branches), the fee may account for other services as well, such as hosting viewings and acquiring energy performance certificates (EPCs).
Traditional estate agents vs. online estate agents
Traditional estate agents tend to be more expensive than online estate agents, due to the reasons (services) just mentioned, plus other financial factors such as their overheads.
During the 2010s, online agents have become extremely popular among sellers and buyers, with many people choosing those instead of going through high-street agents.
Although selling through an online estate agent is generally much cheaper, beware that some of them require you to pay a one-off fee upfront. This carries a certain amount of risk, given that your property might not actually sell, for whatever reason. Furthermore, an upfront fee means that the online agent is financially happy as soon as you pay – rather than having to work hard and get your property sold. So, without an incentive such as commission, it doesn’t matter to an online estate agent whether your property is on the market for weeks, months or years.
That said, there is another way – one that’s better for the seller than both a traditional agent and an online one…
What is the alternative to using an estate agent?
Online services such as Rezee allow property sellers to quickly reach thousands of serious, motivated buyers – all while cutting out the middlemen.
Sites like Rezee are all about getting your property listed both quickly and efficiently, essentially doing the job of an estate agent in a much shorter amount of time. A modern alternative to estate agents that won’t have you tearing your hair out in frustration!
Best of all, there is no seller’s fee: the way these service providers make their money is by charging the buyer a separate fee on top of the asking price – meaning that there is an incentive for them to sell your property, but not one that is detrimental to you financially.