Let’s Discuss This: Estate Agent Fees
Recently I have come across a range of agents offering very low fees or reducing them too quickly to ‘win’ an instruction. I started doing some research on the UK estate agency fees and what we typically charge.
Outside of London the standard fee is 1% + VAT and with the average house price being £251,000 that is just £2551 for selling your home which is most likely the most expensive thing you own. In Australia, the average fee is about £10,000 which is about 5.7% and in the US is 5.5%. So why are we so cheap?
According to a few articles and professionals, it is because we do not recognise customer service or having to pay for a certain level of customer service. Agents that drop their fee or offer it lower than the national standard usually do this as they have NOTHING else to offer.
It is quite amazing that we trust someone to sell arguably our most prized possession, who can only offer a cheap service. Cheap service does not always mean good. An agent charging a slightly higher fee is probably doing that because they know the value of their service. I suppose it is worth linking it to hospitality which is a customer service-based industry. Imagine walking into a Michelin star restaurant ordering a plate of food and when looking at the prices negotiating with the waiter to bring the prices down as the fast-food store is offering it all for a tenth of the price. It is something we would never do. We go to the nice restaurant because we want a good standard and high level of customer service. Estate agency works the same way, you pay for the service and quality you receive. I used to work for a large cooperate agency in London that never negotiated on their fee. They also charged the highest percent but are the market leaders. How did they do this? They realised the value of their services, they did the job they said they would and offered a high level of customer service.
When I talk about service, most agents will not only market the property and negotiate the offer, but also mediate the conveyancing period. In the current market, the demand is out weighing the supply so generating an offer is the easy part. With the number of sales going through the hard work comes after this at the conveyancing period. Balancing vendor and buyer expectations as well as working with the solicitors to make sure the sale goes through are where you can see the difference in the level of service from an agent. Agents that are focused on fees and instruction will have a lot of property online but if you look closely it is likely to of been under offer for a long period of time. An agent is likely to charge slightly more as not only do they focus on getting the property under offer but a large portion of their time is also working on the conveyancing. It is imperative to remember that this is actually the most important part of getting the property sold.
So next time you are choosing an agent, do not just go to the agent that offers the cheapest fee. Ask them what is included in their service, ask them about their customer service offering, and don’t forget to look at Google reviews and testimonies from other people – this is a quick and easy way to see how they truly perform. Selling your largest asset should not be based on fees and fees alone.
If you’d like to discuss the sale of your property in Bristol and the surrounding areas or have any questions, please don’t hesitate to contact me!