Estate Agent Fees: Additional Costs to Watch out Avoid When Selling your House

Have you contemplated selling your house? Numerous factors could drive this decision, such as changing life circumstances like job relocations or downsizing due to empty nests. Economic considerations, like the appreciation of property value, may also inspire a sale to capitalize on the investment. Financial challenges or the desire for an upgraded larger residence might further contribute to the motivation.

Regardless of the specific reason, the decision to sell is made. In this pursuit, engaging the services of a real estate agent could be a prudent choice. After all, real estate agents can help selling a home in the PEI real estate market or any other location, thereby alleviating the potential headaches associated with the undertaking. But when engaging their services, you would have to be wary of their fees!

Apart from the estate agent fees, you also need to be on the lookout for other additional costs that the estate agent may pass on to you without your knowledge. Therefore, you need to keep in mind the following:

  • VAT – In most cases, the estate agent fee will exclude VAT therefore the 1% fee translates to 1.2% including VAT while a 2.5% estate agent fee translates to 3.0% inclusive of VAT. Therefore, estate agents need to clearly state whether the fees charged to you includes the VAT or not. If your estate agent does not state this upfront, do not shy away from checking with them at this point.
  • Estate agent fee expressed based on asking price ā€“ The estate agent contract should express the estate agent fee as an amount that is usually based on the asking price as stipulated by the Property Ombudsman. However, the actual commission you will pay is based on the agreed selling price hence may be slightly higher or lower than the amount that is based on the asking price.
  • Implications of multiple agent contract ā€“ If you are working with a sole agent, the fee will be lower compared to the fee paid in a multiple agent contract. Most importantly, if you agree to the sole agency you must read the contract carefully as there may be alternative routes to selling your home that you have yet explored and creative ways to sell a house fast you may not have thought about.

Estate agents are mandated by law to disclose to you all that the fee covers. For instance does it include preparation of the details of the property, advertising costs like placing the property on property portals and For Sale boards among others. Generally, you should not be asked to make any additional payments.

Furthermore, you should not be asked to pay withdrawal fee in the event that you change your mind. The only upfront cost that you may agree to pay is for the Energy Performance Certificate (EPC) that they can arrange to have done on your behalf.

Even then, you can shop around as you can find it cheaper somewhere else. You may also find that not every estate agent understands your target market or area. For example, a cheap online agent would not understand that you have added on an extra bedroom, and 4 bedroom properties are in high demand in your area. They may not know that you have had a new kitchen built, and added Apollo Quartz worktops in it, which can massively increase the value of your home. Remember, you are under no obligation to use estate agents to obtain a valid EPC. Most importantly, ensure that you draw a comparison of the rates and services offered by different agents since estate agents often earn a commission on these services.

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