Estate Agents have a mixed reputation and some have fallen into disrepute lately, as a result of unfavourable news coverage. However, over 90% of properties are still sold via an Estate Agent. It is true that, apart from the OFT, there is no independent body regulating all Estate Agents, and that Agents do not need any qualifications to practise their profession. The Property Ombudsman (TPOS) has introduced a complaints procedure which should cover most agents and it is also possible to complain to the Office of Fair Trading.
Instructing an Estate Agent can really help you to sell your property, especially if the property is in any way unusual or if it is the first one you have tried to sell. Ideally, an Estate Agent will provide all the following (and more):
- Help and advice - whilst you navigate the selling process and set a price
- Marketing of the property as widely as possible
- Several possible buyers
- A good value service
However, it is worthwhile knowing some basic rules when dealing with Estate Agents.
Estate Agents' Services
Estate Agents can perform the whole selling process from the beginning to the end for you. If, however, you do not just want to sit back and let the Agent handle everything, you should make this clear from the outset. In order to maintain a good working relationship with your Estate Agent, it is important that you decide on how much you want to participate, and let the Agent know about it.
Suggest an Asking PriceThe first thing an Estate Agent will do is to suggest an asking price. As mentioned above, you should not take their suggestion at face value but get your own idea of how much your property is worth. Factors that play a role when setting the asking price are the time frame in which you want to sell your house and the strength of the property market.
Take your Agent's suggestion into account, but do not rely solely on it!
Presentation and AdvertisingThis is one of the key functions of an Estate Agent. Your Agent will take pictures of your house and compile a list of property details to put into a standard format for presentation. Make sure to tell your Agent about all the plus points of the property which he might not notice in one visit. Furthermore, confirm that you can check the presentation materials and property description before they are posted on listings and websites.
The form the advertisements take vary from Agent to Agent, but most will list your property in their windows and brochures. Some also place ads in property magazines or local papers, while most have a website with property listings. A good Estate Agent will make sure that the advert reaches the target audience. As most buyers now start their search for a home online it is more important than ever to ensure that your chosen estate agent advertises widely on the web. Before choosing an estate agent you should compare your local Estate Agents' online property advertising, selling performance and average property price by looking them up in the Home.co.uk Estate Agent Directory.
Arrange ViewingsIf you want your Agent to arrange and perform the viewings, make this clear from the outset, otherwise you might incur additional charges. On the other hand, you might prefer to show potential buyers around your house yourself in order to point out all its advantages. Most Estate Agents are fairly flexible when it comes to this.
NegotiationEstate Agents are professionals in negotiation. Yet the same problem arises as with property valuations: an Agent's motivations might compromise his performance. He might be more concerned about securing a quick sale and advise you to accept the first offer that comes along. Or he might be so keen on pushing up the price as high as possible that he scares away potential buyers with his negotiation techniques.
We generally recommend you to have a fairly good idea of how much you want to (and can reasonably) get for your house, and to stick to it. If your house really does not sell, you can still make adjustments at a later date.
If you are a hard-nosed haggler who has already beaten down Tunisian cloth vendors and used-car dealers, you might prefer to take care of the negotiations yourself. There is nothing keeping you from it – just let your Estate Agent know!
Typically, an Estate Agent will charge you between 2 and 3.5 per cent of the sales price as a commission, but their fees are usually negotiable. One thing to keep in mind is that your Agent might make a lot of profit if you are selling a mansion, but a one-bedroom flat in a shabby building in outer Sheffield won't pay for his children's education. Consider this before you try to push him below 1.5 per cent.
It is not recommended simply to go for the Estate Agent with the lowest fee. Read the small print of the contract and make sure the amount and quality of advertising is sufficient! An Agent's commission is usually based on whether there is one or more Estate Agency instructed with the sale. If the Estate Agent is the sole agency, which means they have the exclusive right to sell your home for about six to eight weeks, the commission will probably be lower than if you have a joint sole agency (you instruct two Agents to work together on your behalf and share the commission) or a multiple agency agreement, in which case several different Estate Agents compete to sell your house and do not share the agreed commission.
Do not forget that you will be charged VAT of 20 per cent of the Estate Agent's commission. If your property is sold for £300,000 and your Agent charges 2.5 per cent commission (£7,500), you will end up paying £1,500.00 in VAT!
Some common sense advice: before you sign the contract, read the small print and negotiate any contentious terms. You should make sure the time frame for the agreement is set properly; it does not usually exceed 3 months, after which you are free to switch Agents if you are dissatisfied. However, if you have a sole agency agreement, we recommend you push the term down a bit to approximately 6 weeks.
See also: Find a Local Estate Agent