Average fees for estate agents have plummeted since 2011 but the majority of sellers are still paying well above this amount in commission.
Research from TheAdvisory, which provides independent advice for house sellers, discovered the average sole agency fee for traditional estate agents has plunged by 34% in the last seven years.
This decrease is as a result of high street agents dropping their prices in a bid to compete with the perceived threat of low fee online agents, many of whom charge lower upfront fees.
Now the average amount charged by agents to sell clients’ homes is 1.18% plus VAT. It means UK estate agents come in as the third lowest commission chargers of all major countries across the globe.
Yet despite the fact sellers could benefit from paying this low commission rate, TheAdvisory’s online survey discovered they were still paying over the average.
Indeed, it found over half of sellers paid over 1.18% with the majority forking out 1.5% in commission. Some 11% paid as much as 1.5% and 2% to their estate agent.
High street agents popular
Meanwhile more than 95% chose a high street agent to sell their home instead of an online hybrid. The traditional high street agents charge a ‘no sale no fee’ commission which includes marketing materials and accompanied viewings while the online hybrids command lower fees upfront, with additional costs on top.
When it came to the type of service sellers were using, three quarters of sellers tended to use ‘sole agency agreements’ where they signed a contract to only use one agent for a certain period of time.
Just under 20% used fixed-fees – where the price for using the estate agent was set a specific rate as opposed to a percentage of the sale. Meanwhile, 4% used a multi-agency approach to selling their home, where several agents work for them and only the company which finally sells their home gets the commission.
Professional service
Gavin Brazg, founder of TheAdvisory, said while many agents were dropping their fees because of the perceived online threat, sellers were clearly happy to pay more for a professional service.
He said: “Market share for hybrid agents is actually very low given the amount of money they’ve spent on marketing.
“Most sellers do not want ‘cheap’. They want the extensive local expertise and high professionalism of a bricks and mortar high street agent.”
