High street estate agents raked in almost £500,000 from people selling their homes in the last year because of a reluctance to haggle over fees, according to new research.
A staggering 82 per cent of sellers admitted they just agreed the first fee they were quoted, a survey by online estate agents Housesimple.com
Worse still, four in 10 (41 per cent) of those surveyed said they didn’t know that they could have negotiated their commission fee, while almost one third (29 per cent) wished they had tried to get a lower rate after they had agreed it.
Cashing in: High street estate agents raked in almost £500,000 from people selling their homes in the last year because of a reluctance to haggle over fees, according to new research
Added to that, just under half (46 per cent) said they felt pressurised by their estate agent and one in five said that they were not confident negotiating, which is why they didn’t challenge their estate agent.
More than half (55 per cent) of the home sellers polled said they paid at least one per cent commission to their agent, with more than a quarter revealing they paid fees between 1.4 per cent and two per cent.
Housesimple worked out that if home sellers had haggled down the initial quote by just 0.25 per cent, they could have saved £487million in agent fees.
For example, haggling a 1.25 per cent fee down to one per cent, would equate to a saving of £1,500 on a property on the market for £500,000.
With so much confusion over fees, and so many Brits settling for commission rates that they weren’t happy with, it’s little surprise that 89 per cent of those questioned, said that estate agents should be more transparent with their fees.
Fixed fees: The biggest online agents Purple Bricks and Yopa charge £849 and £839, respectively, plus an extra £300 for viewings
The average high street estate agent’s commission fee is 1.3 per cent plus VAT, according to the most recent research in 2015 by conveyancing firm MyHomeMove – giving a total of 1.56 per cent.
The lack of transparency has led to a wide disparity between agents’ prices, with some websites not even listing their fees.
And with increased competition from online estate agents, there is yet more reason to haggle.
Sam Mitchell, CEO of Housesimple.com, said: ‘The survey highlights how much home sellers could potentially save by negotiating and not taking no for an answer.
‘There is always room for manoeuvre on the fee and an estate agent that is not willing to reduce their rate will need to have a very strong case as to why, particularly if it is significantly higher than other agents are quoting in the area.
‘Unfortunately, for many people, they don’t feel comfortable haggling, and estate agents are extremely good sales people who can put forward a convincing argument as to why they are worth the commission they are charging.
‘But at the end of the day they also want to secure your business, and if they are as good as they say they are, then your house shouldn’t be on the market for long, and they will have had to do very little work to make their commission.
‘High street agents are living in the past, charging exorbitant fees and not doing enough to justify their meaty commissions.
‘Consumers want value for money, and are, quite rightly, asking “why am I paying an agent thousands of pounds for listing a property on Rightmove and managing a few viewings?”
High price: With much confusion over fees and people settling for commissions they weren’t happy with, it’s little surprise that 89% of respondents said agents should be more transparent
‘This is why we seeing more and more people choosing to sell through an online agent offering significantly lower fees for an identical service to the high street agent.’
For years high street estate agents held the keys to buying and selling a home, with sellers often paying them thousands of pounds in fees.
But recently online estate agents have got in on the act, offering potentially lower fees through using technology and lower overheads than traditional percentage-based sales commission.
Most charge a fixed fee, typically between £500 and £1,200, and list properties on the main online portals, such as Rightmove and Zoopla.
The biggest online agents Purple Bricks and Yopa charge £849 and £839, respectively, plus an extra £300 for viewings.