Before we delve into how much you should pay an estate agent to sell your property, I'd like to tell you a short story. Last week, one of our consultants went on a valuation in Worsley, where a local agent had already been in and provided the owner with a valuation.
Whilst we were talking with the vendor, they passed us a letter from the previous agent where they clearly displayed the two packages which vendors could choose from. Both packages highlighted what was included in their offering, but neither showed a fee.
However, the agent had at the end of the valuation handwritten a cost at the top of the 'bundles', which they then left with the vendor. What this clearly showed us was that they actually decided their final fee when talking with the vendor in the valuation.
For us, it is this lack of transparency which buyers (correctly) find so frustrating with the estate agency industry, and this frustration was clearly highlighted to us by the vendor, when showing us the letter.
So how much should you pay to sell your house? It's an interesting question, and one which house sellers have been asking themselves for many years. In all likelihood, your property is your biggest asset, and deciding which estate agent to use and fee to work with, is a major consideration when selling your home. So where do we start when assessing how much you should pay an estate agent?
In order to fully understand the market, we need to look at a couple of key benchmarks for our Manchester property market. Firstly, the average price of a property in Manchester currently stands at just over £220,000. Obviously there are variations throughout the region, however Rightmove currently shows this figure as the average property across all properties in the Manchester area.
Secondly, the average fee currently charged by an estate agent to sell a property stands at 1.18% (1.42% inc VAT) according to recent figures published by The Advisory. This figure is based on the current estate agency fee for a sole agency agreement on a 'no sale, no fee' basis. What is interesting to note from The Advisory's research is that the average estate agency fee has reduced considerably in recent years, from an average of 1.8% plus VAT in 2011, to 1.18% plus VAT today.
Looking at the two points above, it's fair to assume that the average fee paid to an estate agent in Manchester at present is in the region of £2,596.00 (£3,115.20 inc. VAT). Obviously there will be variations on this, both up and down, and it should also be noted that these figures do not take into consideration average fees from the online/hybrid agency sector, which would likely be significantly lower.
A good question, and one which is becoming increasingly discussed within the estate agency industry of late, especially given the recent Zoopla research which stated that transparency on estate agency fees was the single most important consideration for people looking to sell their property.
Interestingly enough, just a quick glance at the estate agents local to where we're based shows a clear and obvious reluctance to display their fees to the general public who view their website. Looking at this, it's easy to understand the frustration of vendors, who see this as their most important consideration when choosing which estate agent to use.
Key to our message and brand here at Indlu Estate Agents is transparency, and this is something we are very much focussed on in all aspects of our business. As you will note from a quick glance at our website (www.indlu.co.uk), our fees for selling a property are clear, £995.00 plus VAT regardless of the value of your property.
More importantly, we clearly display these fees, and are happy to discuss them prior to you booking a valuation with us. Put it this way, in which other purchase would you invite someone out to your house, unless you knew what they were going to charge you?
If you are considering selling your property, and are looking to chose an estate agent in the near future, pick up the phone to the agent and actually ask them to confirm how much they'll charge you. It's a very interesting exercise, and one which will go a long way in choosing which estate agent you trust, and which you choose to work with moving forward.
In summary, we feel that transparency with the fee is more important than the actual fee itself. To be fair, some agents deliver more within their service than others, and as such a higher price can be justified.
However, what is not acceptable is the lack of transparency with fees overall. Show people your fees at all stages, as this is only way to ensure customers make a more informed decision.