You could be paying your estate agent thousands of pounds to help you sell your property, so it’s worth asking a few questions before you think about signing on the dotted line.
What’s Your Commission?
The commission is the percentage the estate agent charges. Some have a fixed rate, and will it market it heavily if they do. In many cases, the fixed rate isn’t negotiable, but it will often be lower than high street estate agents.
Don’t forget to ask whether the quoted commission includes VAT. Estate agents are supposed to supply prices inclusive of VAT, so you’re not paying more than you think you’re paying. If they don’t provide accurate prices up front, you may be able to renegotiate, or you can consider another estate agent.
Are There Any Fees That Are Not Included in Your Standard Commission?
The usual answer will be, ‘the EPC, if you require one’. However, some estate agents have been caught charging fees for photography, ‘registration’, marketing and other bits and bobs that you’d expect to be included in the commission. There may also be fees hidden in the contract, such as a nonrefundable fee if the house doesn’t sell.
Most fixed-fee agents have a list of additional services on their websites. However, agents that charge extra for marketing and the like tend to cost more than agents who include it as standard.
How Long is the Contract For?
Most estate agents will negotiate a period of exclusivity. Typically, this is between 8 to 16 weeks, although there is significant variation. Aim to get this period low, as if you’re locked in and the agent turns out to be ineffective, it helps if you can change the agent.
Some fixed fee agent contracts are free of restrictions, but some do ask for exclusivity, particularly if they have a no-sale, no-fee structure.
What percentage of your homes are reduced?
This can be a bit of an awkward question, but it gives you an idea as to how accurate their valuations tend to be. Estate agents who reduce a lot of homes tend not to offer accurate valuations, and this can cost you a lot of money. Overvalued homes, according to a Which report, lose about £20,000 of their value, because the overvaluation puts off interested buyers. You’re left with a property that’s much harder to sell, because you’ve exhausted the initial burst of interested buyers.
Ideally, an estate agent shouldn’t have more than 4% to 6% of homes reduced. However, they also shouldn’t have fewer than 1%. This is because if they don’t have any homes reduced, they are likely undervaluing properties. This can be just as detrimental to your pocket as an overvalued property.
What’s your average sale time?
Most estate agents should know how long their properties take to sell. Ultra-long sale times are rarely reassuring, and ultra-short ones indicate they’re undervaluing properties. You should aim for the approximate average in your area, usually between 9 and 16 weeks. Some, however, have a national average, particularly fixed-fee agents, so this might not necessarily apply.
Ultimately, the estate agent you go for should have a good balance of fees, honesty, sale time and accuracy. Whether it’s with an online estate agent or a high street agent, use these questions to ensure you’re getting what you need.