Guide to Successfully Negotiating Estate Agent Fees

It's surprising how quickly an estate agent’s fees can add up when you are ready to place your home on the market. If you know the proper steps of negotiating, you could bring them down dramatically to a more reasonable level. Haggling isn’t typically the norm in Britain, but you may be surprised the amount of money you can actually save. 

Always remember that the estate agent needs you and your sale more than you need them. Try out the following negotiating tips and you could be surprised the amount of money you save on an estate agents fees. 

Where to Start

National or large regional estate agents tend to be more difficult to negotiate a lower rate with than independent agencies. The estate agent that you will deal with is likely to be directed a corporate policy and standards that leave little room for negotiations. They can get away with these high fees because there are buyers and sellers who won’t do their homework and will agree to pay these outrageous costs. 

The small, independent firms can usually negotiate a better deal and have far superior quality amongst their agents. There are a number of things to remember when you discuss the sale of your property with an agent.

Things to Mull Over

A dominant realtor, that is successful in the local area, may be harder to deal with than a lesser known agent. Just because an estate agent has a large following and is established in the neighbourhood doesn’t mean they will give you the best service. 

Speak to a number of agents from both the smaller firms and the nation-wide chains. Since they will be working for you, interview them and find out what they are going to do to get your house sold. Many agents will make you feel like they are doing you a favour by selling your home. Never work with someone that you feel uncomfortable working with. You and your estate agent should have a good rapport and have the goal of selling your home at the forefront of their mind. 

Knowledge is Power in Negotiating

An estate agent that turns away clients won’t be in business very long. Even though they would like to charge a rate of 2 to 2.5 percent commission, you should try negotiating a better rate of 1 percent instead. Your goal should be to get a house that is priced at £500,000 down to around 0.75 percent, plus the value added tax. 

Take the time to prepare yourself ahead of time when negotiating the best deal from an estate agent. Your home should be immaculate and realistically priced. If you take the proper steps to present your home well to potential buyers, the estate agents will be vying for your business. A home that is priced at the current market value will let the agent and prospective buyers know that you are knowledgeable about the real estate industry. If you show them that your home is a quick sale, they may actually lower their agency fees to bring you on as a client. 

Tips for Proper Negotiations

Coming right out and asking for a reduced agency fee will not work. Start by talking about the many charming characteristics of your home and the surrounding neighbourhood. Leave all discussions regarding agency fees until the end, so your agent has a chance to grasp the wonderful aspects of your home and the commission it will garner. 

Ask about the agent’s fee and act shocked when they reply with a number. Shake your head in disbelief and tell them you can’t agree to such an outrageous fee. Let them know that the only way you would consider bringing them on as your agent is if they come down to 1 percent and then gauge their reaction. If they don’t agree to the terms, show them to the door and thank them for their time. Let them know that you have several other estate agents to meet with and you will notify them of your final choice. Do the same thing with each agent that you are interviewing and keep notes on their services and fees. Write down any other specific comments you have like their characteristics and the comfort level you felt in dealing with them. 

If you have found an agent that you would like to work with, but their agent fee wasn’t where you would like them to be, have them back again for a meeting. Let them know that you are torn between them and another agent who gave you a better fee. Notify them that they both offered a high level of service and promising marketing plan and that the fee was the only factor separating them. Because the other agent’s fee was the lowest, you will have to give your business to them. This allows the other agent the option to match the competing fee or they will risk losing the sale. 

They will probably come back with a number of reasons why they can’t come down in price. Most times this is just a scare tactic to give the prospective seller doubt about whether the agent will walk away from the sale. If they can’t come up with a lower offer, it will be up to you to decide if the price they quoted is at an acceptable rate. 

In Closing

You can save a large sum of money if you know the proper ways to negotiate a fair deal. Make sure to stand your ground and be diligent with the estate agent and be sure to get the best agent fee you can when selling your home. 

Bio

Andrew Potter writes for My Online Estate Agent, the low cost online estate agent with full UK coverage.