Find out what estate agents do, how much they cost and what you should ask them when buying or selling a home.
In this guide:
What is an estate agent?
An estate agent is a person or business that sorts out the selling or renting of property.
Most people hire an estate agent when they want to sell their home.
In most cases it’s the seller who pays the estate agent.
Estate agents can either be:
local estate agents
online estate agents
In some countries estate agents are referred to as real estate agents.
An agent that specialises in renting is usually referred to as a letting agent.
How much estate agents charge
A survey by The Advisory in 2018 found the average estate agent fee to be 1.42% of the property’s selling price, including VAT.¹
Most high street estate agents charge a percentage of the agreed selling price.
According to the HomeOwners Alliance, this is normally between 0.75% and 3%.²
Since 2016 quoted fees have had to include VAT.³
Estate agents’ fees vary and are negotiable on a case by case basis.
In most cases you will not have to pay an estate agent if your property does not sell. This is known as ‘no sale, no fee’.
Online agents usually charge a flat fee of between £300 and £1,500.⁴ The fee can vary depending on how the agency markets your property and any other services they carry out.
How to choose an estate agent
You should speak to a few agents before choosing one to sell your home.
Do your research before just choosing the cheapest agent or the one who gives the highest valuation for your property.
Here are some things you should think about:
Does the estate agent come recommended by other people in your area?
How long will you be tied into a contract for?
Will your house or flat be listed on property portals such as On The Market, Zoopla or Rightmove?
How long does it usually take the agent to sell a property?
Does your agent have a list of buyers interested in a property like yours?
Is the agent a member of the National Association of Estate Agents and/or an ombudsman scheme?
Types of estate agent contract
There are 4 main types of estate agency contract.
This type of contract means the estate agent in the contract is the only one allowed to sell your home during the time agreed in the contract.
Sole selling rights
This means you’d have to pay the estate agent during the contract period even if you find your own buyer.
This means you can hire several agents to try and sell your home.
You’d only need to pay the one who found you a buyer, but fees are likely to be higher.
Ready, willing and able purchaser
This means you have to pay the agent if they find you a buyer, even if you decide not to sell.
It’s usually best not to sign this type of contract.
How to deal with estate agents when selling
When selling your home these are some steps the estate agent should carry out:
Most estate agents will give you their opinion about how much your home is worth for free.
They’ll give you a valuation figure based on:
what they know about the local property market
prices of similar homes they’ve sold
data from the Land Registry.
After you’ve signed a contract with an estate agency, they’ll start to market your home at an “asking price”. This will have been agreed with you beforehand.
Marketing will include photographs, a floor plan and a written description of your property.
The agent will also arrange for an Energy Performance Certificate (EPC) to be issued.
Advertising might be in the estate agent’s window or website, or on sites such as Zoopla, On The Market and Rightmove.
The estate agent will usually show potential buyers around your home and answer any questions they might have.
With some online estate agents, you can choose to pay a smaller fee and manage the viewings yourself.
If a buyer wants to put in an offer for your property, they do this through the estate agent.
The agent should pass on all offers to you even if the offer is much lower than your asking price, or if you’ve already accepted another offer.
The estate agent will act as a go-between between you and the potential buyer and manage negotiations.
It’s important to understand that the estate agent works for you so their aim should be to get the highest possible price for your property.
Memorandum of Sale
Once an offer has been accepted, the estate agent will issue a Memorandum of Sale to both you and the buyer, and both your solicitors.
A memorandum of sale is a written document between you and the person agreeing to buy your property.
How to deal with estate agents when buying
Sign up with local estate agents
Visit some estate agents in the area you’re looking to buy in and tell them what kind of property you’re looking for.
Let them know your budget and ask them to call you when a suitable property is up for sale.
You can register with as many agents as you want.
Use viewings to ask the agent questions about both the property and the local area.
If you’re looking at a leasehold property, the agent should have information about the ground rent and service charges.
Putting in an offer
Estate agents are legally obliged to pass on all offers to the seller.
Never tell the agent your maximum budget.
Their job is to get the best price for the seller, so keep that in mind if they suggest your offer is too low.
Know your rights
Most estate agents will have in-house mortgage brokers and conveyancing solicitors they recommend.
They may try and persuade you to use these services but they can’t force you.
It’s usually better to use an independent mortgage broker rather than an in-house adviser and to choose your own solicitor.
How to sell your house without an estate agent
You do not have to use an estate agent to sell your home.
If you decide to sell without one you’ll need to do the marketing, viewings and price negotiations yourself.
The first thing you should do is get an Energy Performance Certificate (EPC) completed. It’s illegal to market your home for sale without one.
You can then advertise your home in the local paper, online or on social media.
You could also use an online estate agent to market your home and list it on property sites.
You’ll need to host viewings and answer any questions potential buyers have about the property. Because of the coronavirus pandemic, you may need to follow your region’s social distancing rules.
If someone makes an offer you’ll need to negotiate with them directly.
Once you have secured a buyer, you’ll need to swap solicitors’ details to progress the sale.
Questions to ask estate agents if you’re buying
Have the residents of the property had any issues with the neighbours?
Why is the owner selling?
What is the lowest price the sellers are willing to go to?
Are the sellers part of a chain?
Which local authority area and council tax band is the property in?
Is the property a listed building or in a conservation area?
What is included in the sale?
How many other offers have you had on this property?
How long have the vendors owned the property?
How long has the property been on the market?
Is the property leasehold or freehold?
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¹ The Advisory: Estate Agent Fees & Commission
² HomeOwners Alliance: How much should I pay the estate agent?
³ The Property Ombudsman issues revised Codes of Practice to address ‘portal juggling’
⁴ Which?: Online estate agents