When are estate agent fees paid?
Estate agents are required by law to tell you what is included as part of their fee and are normally due upon completion (when the property has been sold and contracts exchanged). However, some estate agents may require you to pay upfront, the estate agency agreement will stipulate when fees will need to be paid.
Usually, your agent will send their invoice to your solicitor and, upon completion of the sale, your solicitor will settle the agent’s bill directly out of your sale proceeds before transferring the balance to you.
Be aware of the terms of payment, and make sure your agency allows a few days for the money to be transferred before they start charging interest. Many estate agents will give you a 5–10 day grace period in which to make payment before charging you a daily interest rate. The number of days in which to pay will be stated in your contract.
Types of estate agent fees
Commission fees
Some agents will charge a commission for their services, which is a percentage of the final agreed sale price. It is wholly dependent on the price of the property for sale so costs can really vary. This fee typically covers:
- a realistic property valuation based on local market research, trends and past sales data
- accurate floorplans and measurements
- professional photographs
- the installation and removal of a ‘for sale’ and ’sold’ board sign
- assisted viewings
- online marketing of your property
- negotiation costs
Fixed fees
A fixed fee does what it says on the tin, it's a set price for an estate agent's specific service. However, it’s important to remember with this model that there could be a choice of packages available with varying levels of service aimed at different price points. Prices usually start from around £800 but costs can escalate if you opt for added extras—like a floor plan or assisted viewings.
Some estate agents will also give you the choice to pay upfront or defer the fixed fee payment for a later date. Whilst the latter may seem attractive, it’s not without conditions. If you choose to defer, a loan agreement will be created with a third-party financial advisor and you may incur additional costs (such as interest). Be sure to check and understand what's included before you sign on the dotted line.
How to find a good estate agent
Wonder how to find a good estate agent? In this episode of the Move iQ podcast, Phil Spencer talks to NAEA Propertymark President Liana-Loporto Browne about what to look for – from identifying a good agent through to how to get what you want from them including relevant market information.
What to ask your estate agent about fees?
There are a lot of questions you should be asking your agent, particularly if you’re a first-time seller, but this will cover the basics when it comes to costs:
- what is included in your estate agency fee?
- does your quote include VAT?
- will you provide floor plans and professional photos of my house, and is this at an extra cost?
- will you provide and install a ‘for sale’ board, and will I be charged extra for this?
- do I have to pay an additional fee for marketing?
- where will you advertise my property?
- how many websites will my property listing feature on?
- do you charge extra for ‘enhanced’ listings or being a ‘featured property’ on Rightmove/Zoopla etc?
- are there any other costs I might incur?
Your estate agent's contract
Your contract is likely to include a tie-in period, which locks you into an estate agency agreement for a minimum amount of time (typically from four to 12 weeks). If you wish to terminate the contract during this time you may incur a fee, so check to see if your contract gives you the flexibility to end an agreement without being charged. If it doesn’t, speak to your agent as this may be negotiable.
Withdrawal fee
Some estate agents may also charge a withdrawal fee if you choose to remove your house from the market within a certain timeframe. It’s also important to be aware of contracts that include a 'ready, willing and able purchaser' clause. This means that you will be required to pay a sum regardless of whether your property sells or not.
Sole selling rights and sole agency
If you decide to use more than one estate agent, firstly check the small print to ensure your contract allows it. If it states your estate agent has ‘sole selling rights’, this means they are the only agent allowed to sell your home during the stipulated period. Even if you find your own buyer, you will still have to pay that estate agent.
This is not to be confused with a ‘sole agency’ clause which is similar except you won’t have to pay anything to the estate agent if you find your own buyer.
Read your contract thoroughly before agreeing to any terms. If you come across any words that you’re unsure of, take a look at our jargon-busting guide to help you beat the legal language.
Added extras
Some estate agents offer additional services (such as in-house conveyancers or solicitors) which will be charged at an additional cost on top of their standard fee. Prices for these services must be detailed upfront so be sure to have a copy of these in writing (inclusive of VAT) and when payment for them is expected.
Often your agent will ask if you want them to carry out an Energy Performance Certificate (EPC) assessment for you, this needs to be undertaken on a property every ten years. Whilst anyone can arrange an EPC, it’s often more convenient to get your estate agent to do this for you, especially if those in your household work full-time. Consider how much extra it will be for your agent to arrange this compared to arranging it yourself.
Optional extras, such as featured or premium listings and enhanced marketing packages, come at a premium and can range anywhere from £100 upwards. Check what you can afford and think about how much value it will add to your listing before agreeing to any add-ons.
Are you Propertymark Protected?
If you need an estate agent, look for a Propertymark Protected agency. By using one of our members you are guaranteed to be consulting with a professional agent who will give you up-to-date advice and guidance.