Which estate agent should I choose, variable or fixed fee? There is no right answer to this. It depends on
- how confident you are as a seller,
- the trust you build with your estate agent and
- the value of your house.
The higher the value the more you will save with a fixed fee estate agent. But the sales price only has to change a small percentage for that saving to disappear, Fixed fee agents often have additional charges hidden in their terms & conditions.
A traditional High Street estate agent will often claim to be able to get a better price. They justify their higher fee as they have better local knowledge, contacts and offer a higher level of service. This can be true but test it with our Key Questions to ask an Estate Agent
Be cautious about any agent which values your house above what you think is sensible. Some less than scrupulous agents will do this to get your business. They will the manage your expectations down at a later stage.
A fixed fee estate agent will employ a local “property expert” to value your home. Many will handle offers but will leave viewings to you. Make sure that you question the expert to make sure he really has local knowledge.
Fixed fee agents often claim to be open 24/7 as you will be able to check progress on line. You will not rely on an estate agency branch which may be closed.
- Both types of agent will advertise your property on one of the online marketing portals such as Rightmove or Zoopla to sell your property. These sell the majority of properties are now marketed and sold, Whichever estate agent you use, it should be well marketed.
- If you are less confident in handling viewings or negotiations with potential buyers, or have less time to do so, then it might be that a traditional estate agent is better for you.
- If you are a confident seller and don’t mind doing some of the leg work, particularly managing viewings, then you should consider a fixed fee estate agent.
- The key economic factors in how to choose any agent are how long they take to sell a house and how close to the original selling price they achieve. You should be aware of any agent which over values your house just to get the business.
A house with a value of £300,000 would cost £4,500 to sell through a High Street estate agent charging 1.5%. A fixed fee estate agent would typically charge around £700, £3,800 less. This is a big saving. Note that if the price is reduced by just 1%, the saving disappears.
A recent consumer survey found that online agents typically sell a house 38 days faster than High Street estate agents. They also found that more High Street estate agents than fixed fee estate agents reduced the asking price by 5% or more, 19% against 13%.
Another factor to consider is if there are any tie in’s . As an example Purplebricks will want you to use their conveyancer .If you don’t there is a mandatory charge of around £3-400 to pay on top of their fixed fee.When we got quotes we typically found their conveyancing pricing to be on average £480 more expensive than that of Simplermove’s members solicitors . This is because the chosen solicitor pays a “referral fee” to Purplebricks of £380 ,with £40 extra gong to their panel manager , in effect the company who managed to contract. Then there is mortgages, removal firms , EPC providers … it all adds up
So that means you pay out another £500 on top of the fixed fee that you pay up front. Your now committed to paying around £1300-£1400 whether your house sells or not. When you consider that any High street agents should be around 1% then its a big risk to take if your house is under say £200,000 . Your paying out sale or not and the fixed fee agent might have less “skin in the game” as you have already handed over your money . The motivation to sell your house is less.
So what should you do?
Buying and selling a house is the biggest investment decision most of us will make. We have researched fixed fee and high street estate agents in making recommendations to you.
- Use our Comparison Tool to see the best estate agent deals.
Its sensible to get valuations from fixed fee as well as traditional estate agents. Let them make their case to you. Make sure they have the skill, knowledge and experience to back up their claims.