Estate Agent Costs: Fixed Fees Vs Commission
In this week’s sales article, we look at the value full-service estate agents offer compared to DIY firms.
So, you’re selling up and don’t know whether to instruct a traditional estate agent or a DIY fixed-fee agency. Let’s look at the pros and cons of both options.
If moving is on your mind, the first thing you need to do is find the right estate agent. But before you can do this, you need to answer a more fundamental question: what type of agent do you want to handle the transaction? You have two options:
· A DIY agency which offers a pared-back service and often charges a flat, upfront fee. (They’re called DIY agencies because often the seller handles things like viewings themselves.)
· A traditional agent who charges a commission on the price the property sells for. They’re often called ‘full-service agents’ because they usually handle the photography, social media campaigns, copywriting and advertising, floorplans, viewings and negotiations.
Here are a few things to consider before you decide which option to go for.
Motivation
It’s in a traditional agent’s interests to work hard, negotiate a good price and shepherd the deal through to completion, as they only get paid if your property sells.
If you pay an agent a flat upfront fee (usually non-refundable), how motivated will they be to secure a sale? It makes no difference to them whether you achieve the asking price, drop the price significantly or don’t sell at all.
Service
It’s wise to check the terms of any contract you sign so you understand exactly what services an agent will provide.
It’s also worth considering your options if you’re unhappy with the level of service you receive. If you go with a traditional agent on a limited tie-in, it’s in their interest to provide a good service because they won’t want you to take your custom elsewhere.
But what if you’ve paid upfront and are unhappy with the service? Is your money lost?
Costs
The flat fee you pay with a DIY agency is usually lower than what you’d pay in commission. So technically, the amount you fork out to an agent will be less if you go down the DIY route.
However, if a full-service agent can secure a higher price for your property than a DIY agent would, they might offer better value. You might be paying more in agent fees, but the amount of money in your pocket after the sale goes through will also be higher.
For a free property valuation, contact us here at Shaws Kensington today.