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, the seller pays the estate agent.

Estate agents can either be local or online

In some countries, they call estate agents 'real estate agents'.

An agent that specialises in renting is usually referred to as a letting agent.

How much estate agents charge

In 2018, the average estate agent fee was 1.42% of the property’s selling price, including VAT. According to a survey by The Advisory¹.

Most high street estate agents charge a percentage of the agreed selling price. 

According to the HomeOwners Alliance, this is often 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. 

Often you will not have to pay an estate agent if your property does not sell. They call this ‘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.

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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.

Before choosing, ask:

  • 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.

In a sole agency contract, only the agent named in the contract can sell your home in the agreed time in the contract.

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.

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.

Valuation

Most estate agents will tell you how much they think 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

Marketing

After you’ve signed a contract with an estate agency, they’ll start to market your home at an “asking price”. They must agree this price with you first.

Marketing includes 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.

Viewings

The estate agent will usually show potential buyers around your home. As well as answer any questions they might have.

With some online estate agents, you can choose to pay a smaller fee and manage the viewings yourself.

Offers

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.

Negotiations

The estate agent will act as a go-between between you and the potential buyer and manage negotiations.

The estate agent works for you. So their aim should be to get the highest possible price for your home.

Memorandum of sale

Once an offer is accepted, the estate agent will issue a memorandum of sale to you, the buyer, and 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 want to buy in and:

  • tell them what kind of property you’re looking for

  • let them know your budget

  • ask them to call you when a suitable property is up for sale

You can register with as many agents as you want.

Viewings

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 know the ground rent and service charges.

Putting in an offer

Estate agents must, by law, 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 cannot make you. 

It’s usually better to use an independent mortgage broker rather than an in-house adviser. It's also best 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 choose to sell without one you’ll need to do the marketing, viewings and price negotiations yourself.

You'll then need to:

  1. get an Energy Performance Certificate (EPC). It’s illegal to put your home up for sale without one

  2. advertise your home in the local paper, online or on social media. Online estate agent will market it and list it on property sites

  3. host viewings and answer questions potential buyers have about the home

  4. negotiate directly with someone if they make an offer

  5. swap solicitors' details to progress the sale once you've got a buyer

You may need to follow social distancing rules for viewings due to coronavirus.

Questions to ask estate agents if you’re buying

  1. Have the residents of the property had any issues with the neighbours?

  2. Why is the owner selling?

  3. What is the lowest price the sellers are willing to go to?

  4. Are the sellers part of a chain?

  5. Which local authority area and council tax band is the property in?

  6. Is the property a listed building or in a conservation area?

  7. What is included in the sale?

  8. How many other offers have you had on this property?

  9. How long have the vendors owned the property?

  10. How long has the property been on the market?

  11. Is the property leasehold or freehold?

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Sources

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