The Estate Agent Fee: What Are Sellers Actually Paying For?

Most sellers can tell you what their agent charged. Very few could tell you what it covered.

That is not the seller’s fault. Fees are quoted as a single percentage at the end of a friendly conversation, at a moment when nobody wants to seem suspicious. But a fee is a contract, and a contract you have not read is just a feeling.

What is actually inside an estate agency fee?

Six things, and they are rarely itemised.

Getting the property in front of buyers. Photography, floorplan, description, portal listings, the board, the mailing list.
Handling the enquiries, which means answering the phone at the times buyers ring rather than the times offices open.
Conducting viewings and collecting honest feedback from them.
Qualifying buyers, so you know whether the person offering can actually proceed.
Negotiating, which is where the money is genuinely made or lost.
Sales progression, the twelve to sixteen weeks of chasing after the offer that nobody sees and everybody needs.

When you compare two fees, you are comparing six things at once, not one.

Which part matters most?

The last two, and they are the two most often quietly reduced.

Getting a property listed is close to a commodity now. Anyone can put a house on a portal. The difference between a good sale and a poor one is almost always made in the negotiation and in what happens between the offer and the keys.

Ask specifically who does those two jobs, by name, and what happens when that person is on holiday.

What questions turn a vague quote into a real one?

Is the fee inclusive of VAT, and what is the actual cash figure on my property?
Is it no sale, no fee? If the sale falls through after an offer, is anything payable?
What is the tie in period, and what notice do I give to leave?
What is included and what is charged separately? Photography, floorplan, premium listings, the board.
Who conducts viewings, and are evenings and weekends covered?
Do you receive a referral fee or commission from any solicitor, broker, surveyor or removal firm you recommend?

That last one matters more than most sellers realise. Referral arrangements are common and perfectly legal, and there is nothing wrong with a recommendation. The only real problem is not being told, because then you cannot weigh the advice properly.

Why are two quotes so hard to compare?

Because they are almost never quoted on the same basis.

One will be plus VAT and one inclusive. One will include professional photography and a floorplan, another will treat them as extras. One will have a twelve week tie in and another six. One will conduct every viewing and another will expect you to do them when the office is shut. Put like that, the percentage is the least informative number on the page.

Write the six answers down for each agent in the same order and the comparison becomes obvious in about five minutes. Sellers who do this often discover the cheapest quote was not the cheapest offer, and occasionally that it was.

It is frequently the most expensive thing in the room.

A valuation is an opinion, and an opinion can be used to win business. An agent who suggests a figure well above the others, with nothing to support it, is not offering you more money. They are offering you a number, followed some weeks later by a conversation about reducing it, from a position where you have already lost the best weeks of interest.

Ask any agent to show you the comparable properties behind their figure. Actual sold prices, not asking prices. If they cannot, the number is a pitch.

Is there another way to choose an agent?

There is.

We are proud members of the Ethical Agent Network, a national group of independent agents who have been independently assessed to make sure we meet strict standards of honesty, service, professionalism and community care. Nobody pays to be in it. Every member has sat in front of a panel of other agency owners and been asked to prove it.

That is not a guarantee that we will be the right agent for you. It is a guarantee that somebody independent has already checked the things you would struggle to check yourself.

So how should you decide?

Put the three quotes side by side with the six questions answered in writing, and only then look at the numbers.

You will often find the fees are much closer than they first appeared, and the real differences are in the tie in, what is included, and who actually does the work. That is a decision you can make properly. A percentage on its own is not.

Frequently asked questions

Do I have to pay if my sale falls through?

It depends entirely on your agreement, which is why it is the second question to ask. Many agreements are no sale, no fee, but some charge for withdrawal or for abortive work. Get the answer in writing before you sign.

What is a reasonable tie in period?

There is no single right answer, and it depends on the property and the market. What matters is that you know what it is, that it is stated plainly, and that you understand exactly what leaving would cost and how much notice you must give.

Should I tell agents what the others have quoted?

You do not have to, and it can be more useful not to at first. Ask each of them what they would do and what they would charge, then compare. You learn far more from three independent answers than from three responses to the same number.

If a friend is about to sign with an agent, please send them these six questions.

About the Ethical Agent Network

We are members of the Ethical Agent Network (EAN). Membership cannot be bought. Every agent has to pass an independent assessment on honesty, service and the way they treat people. So when you see the EAN logo on an agent’s window or website, it is a signal you can trust before you have even walked through the door. To find out more, please get in touch or visit www.ethicalagentnetwork.co.uk.