Wed 31 May 2023
Holly Butcher, Residential Valuer
You've decided to sell your home, but you cannot decide whether to work with a conventional estate agent or a do-it-yourself agency that charges a flat fee. Let us look at the advantages and disadvantages of both options.
The commission rates charged by estate agencies can fluctuate widely depending on the area of the UK you live in and sometimes the marketing price of your property. The quality of service you receive, which is reflected in the number of viewings as well as the speed and value of the sale, can also play a role in this. In the past, estate agency fees were always calculated as a percentage of the property's total selling price. However, over the course of the past few years, an increasing number of agents have begun offering fixed fees instead. This is something that happens quite frequently with online and hybrid estate agencies.
Most reputable high-street estate agencies include commission in the fees they charge for selling a property. This commission is typically expressed as a percentage of the final sale price. To market a property and sell it for the best possible price, requires an incredible amount of effort and skill from our sales teams. This includes understanding the property sale prices in every square mile and all the micro pockets throughout the many towns and villages in our region, producing quality marketing materials, building a database of active buyers in the area, negotiating the purchase price on your behalf and progressing the sale through to completion - a process that can take months.
Most reputable estate agents have been in business for quite some time. For instance, we're very proud to say that Butcher Residential Estate Agents have been selling and renting residential and commercial properties in Barnsley for more than three decades!
A commission may appear to be unnecessary or excessive, and as a result, you may be drawn to agencies that boast low fixed fees.
It is easy to see why this would be very appealing: the price is fixed, and it is not particularly expensive overall. However, it is essential to keep in mind that DIY agents do not have the same level of motivation and incentive to work as hard as they possibly can for the same fee that they would receive if they invested the bare minimum amount of time and effort, and this is especially true if they ask you to pay the fixed fee in advance.
The age-old proverb "You get what you pay for" comes to mind in this situation.
So what do you do?!
It's easy - You find the right estate agent as soon as possible! Remember, your home is (usually) your biggest asset in life. Obviously, DIY online estate agents are doing something right otherwise they wouldn't still be in business (let's not take into consideration the recent demise of one of the largest online agents for a moment!) However, it's all about increasing the CHANCES of achieving a higher sale price and ensuring your sale goes through as smoothly as possible to lessen the chances of you losing out on your onward purchase.
A do-it-yourself agency that provides a streamlined level of service and frequently levies a single, upfront payment. (They are referred to as "Do It Yourself" agencies because the seller frequently handles things like viewings, offers and sales progression on their own).
Advantages of a traditional commission-based estate agent
A traditional real estate agent will base their commission on the final sale price of the property.
Because they typically take care of things like photography, social media campaigns, copywriting and advertising, floorplans, walkthrough video tours, drone footage, viewings, and most importantly, negotiations, they are frequently referred to as "full-service estate agents."
Before you settle on one choice over another, there are a few things you should think about first.
Because they are only compensated if your property is sold, traditional real estate agents have the incentive to put in a lot of effort, negotiate a fair price, and see the transaction through to its conclusion.
How motivated will a DIY estate agent be to close a deal if you pay them a one-time flat fee upfront, which is typically non-refundable? They are unconcerned about whether you get the price you asked for, reduce it significantly, or do not sell the item at all.
It is important to read over the terms of any contract you sign before you put your signature on it so that you are aware of the specific services that an agent will provide.
If you are dissatisfied with the quality of service that you are receiving, it is important to think about the alternatives available to you. If you choose to collaborate with a traditional estate agent on a limited basis, the estate agent has a personal stake in providing you with a high-quality service because they do not want to lose your business to a competitor.
But what happens if you have already paid for the service, and you are not satisfied with it? Have you lost your money?
When working with a do-it-yourself agency, you will typically pay a flat fee that is less than what you would pay in commission. If you choose to sell your home without the assistance of an agent, you will save money on the commission that you pay them.
On the other hand, a full-service estate agent may provide better value if they are able to sell your home at a higher price than a do-it-yourself real estate agent could. You may end up paying more in agent fees, but the amount of money you walk away with once the sale is finalised will also be greater.
In a recent study, it was found that using a traditional estate agent vs an online one...
- Increased viewing numbers by 48%
- Increased offer numbers by 64%
- Generated a more secure buyer (or buyer willing to pay a better price) 73% of the time
- Secured a 5% higher sale price (compared to using a Rightmove listing service)
(See full details of the study)
So, on a £300,000 house, you would pay an estate agent an average of 1.2% + VAT (£4,320) and an online agent, say a minimum of £1,200 once you've dealt with all their additional fees.
By using a traditional estate agent, you are increasing the chances of you walking away with over £3,000 more AND increasing the chances of your sale going through smoothly. We have seen all too many times our vendors being held up by delays particularly with online agents because they're struggling to get through to an "agent" in their call centres. Don't let that be you!
At Butcher Residential, we are frequently contacted by sellers whose homes have been on the market for several weeks or months after having been listed by other real estate agents who were not successful in selling the properties. When we use our one-of-a-kind industry knowledge and innovative marketing strategies, we are typically successful in selling these properties within a matter of weeks.
The real estate market is notoriously difficult and cutthroat, particularly now when there are a notably high number of buyers compared to the number of properties that are up for sale.
To successfully market a property in a way that will bring in many prospective buyers and result in the highest possible sales price, one needs a significant amount of experience, a wealth of knowledge, and a breadth of expertise.
It is in your best interest to instruct a hardworking estate agent who is committed to being initiative-taking and dedicated to your needs to ensure a successful and profitable sale.
Butcher Residential is a leading independent estate and letting agent that has won multiple awards and boasts over 35 years of experience in estate agencies throughout South and West Yorkshire.
Our highly trained team of property professionals in Penistone and Denby Dale specialise in selling and renting residential and commercial properties alike and are on hand 6 days a week.
Simply call us to have a friendly informal chat about finding your next home or if you are thinking of selling your house, then our team will be pleased to arrange a free no obligation valuation of the property.