What exactly does an estate agent do for you?
It’s a question many of us might pose ourselves as we go through the long and arduous process of selling and moving houses.
Sometimes a buyer or seller could be forgiven for thinking that the whole market is specifically geared up to make the whole thing as slow and costly as possible – it’s during these dark moments that you’ll start to wonder what you’re getting for your money.
Many sellers understand that the market largely dictates the value of their property and know they can shop around for legal services and removal assistance. But, when it comes to fees, these are often simply seen as another necessary expense, wearily added to a to-do list that might literally be as long as your arm.
But, in the spirit of getting the best possible deal, it really is important to think about the fees involved and what you get for your money.
The Home Owners Alliance points out that, through haggling, your ultimate goal as a seller should be to try to negotiate the fees down to 1% of the price of the sale. The figures you are quoted are, undoubtedly, not including VAT so even a 1% deal will, with VAT at 20%, come out at 1.2%.
Even with such a deal secured (and many will charge 1,2 or even 3% higher than this) with the average house selling for £294,351, this still means more than £3,500 for the estate agent.
So what do your thousands buy you?
The money paid to an estate agent will go towards direct services for you, such as a valuation based on expertise and research of the local housing market, analysing data and assessing the value of your property.
It also funds the photos of your home, the measurements and setting out of a floorplan, and the process of writing up the details of your property.
You’re also paying for the service of organising viewings, listing your property online, sticking a ‘for sale’ board outside your home, printing out brochures (usually containing the sort of information placed online) and possibly advertising it in a print copy of a newspaper and displaying pictures in their shop window. Your fees also cover negotiating on your behalf and showing people around your property.
Then, of course, your fees also need to go to the running costs of the estate agent themselves. The wages of the staff, the cost of the high street shop and fleet of company cars all take a portion of the funding pot.
Yet this is being challenged by a new batch of online agents.
These companies have much smaller overheads – thus do not need money for much of the last line of expenses. They also focus solely on online marketing, arguing that with 90% of buyers beginning their search online the need for brochures, newspaper ads and photos in windows has passed.
They hand over responsibility for showing around prospective buyers to the seller – something many people prefer anyway – and say that by stripping out these functions, they can vastly undercut the fees charged by traditional outlets, typically coming in between £500 and £1,000.
Estate agents fees are now the subject of a big debate. Online outfits argue much of the operation of the traditional outlets is unnecessary.
As sellers it’s important to consider the full list of services above and the value you place on those. You wouldn’t walk into a shop and splash several thousands of pounds out on an unknown item so don’t do it when buying your house.