Fixed Price Estate Agent or Commission?

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We explain the difference in the fees charged by Estate Agents in Edinburgh and what this means to the final costs when selling your home in Edinburgh

What is the difference between fixed fee estate agency and paying the estate agent commission? 

Traditionally estate agents everywhere charged a fee based as a commission on the sale of your property. However, there is a growing trend towards charging a fixed fee. But what are the differences? And is it just a cost saving or are there service differences that you should also take into account?

What is the cost difference?

This is best illustrated by an example:

So you are thinking of selling your property in Edinburgh, which sells for £180,000. A commission-based estate agent might typically charge you a fee of 0.75% of the sale price. Meaning their fee (including the VAT) would be £1,620.00 for selling your property.

A fixed fee estate agent would charge you the fixed fee agreed at the start of marketing. In the case of our firm, we charge an estate agency fee of £850 plus VAT and so our fee would be £1,020, which gives you a potential saving of £600.

These are just illustrations to explain the basic difference in how the fees for selling your property in Edinburgh as between a commission-based fee and a fixed fee. There are of course estate agents in Edinburgh who charge commission at less than 0.75% of the sale price or more than that. Equally there are estate agents in Edinburgh which charge less or more than our fixed fee of £850 plus VAT.

But there are other costs, aren’t there?

Yes there are. You will need to pay for the cost of the Home Report, marketing fees, the cost of the ESPC marketing (if you are using an estate agent in Edinburgh who is a member of the ESPC) and there will be costs for the photos, floor plans, brochures and for sale boards. This is where it gets a little blurry because each estate agent in Edinburgh probably charges these differently and some may make no charge at all.

But does saving money on the estate agency fee mean I get less of a service?

We equate higher charges with better quality service – But is that correct?

I think almost everyone to some extent equates a higher cost with a better quality service and certainly some estate agents that charge a commission-based fee will tell you that they try harder and get better sale prices for their clients and so why shouldn’t they get paid more for this?

Does having the right estate agent really mean we shall get more for our property?

In reality, however, what your property sells for is the price someone is willing to pay you for it. Whilst a good estate agent will try to negotiate a higher price for you when negotiating with a single buyer, in the current property market in Edinburgh it is quite common for there to be multiple buyers wanting to buy your property and they will bid against one another at the closing date, which achieves the goal of getting you the best possible selling price for your property. It is therefore the market and not the particular skills of an estate agent that will do this for.

But there are some estate agents that provide a better quality service than others, aren’t there?

Yes there are. It is hard for you to make your decision if you have never used an estate agent before. Of course it is. So, how do you tell the good from the rest?

  • Check out their website
  • See their reviews
  • See the quality of their brochures
  • Call or email them to ask for a quote and check to see how quickly they deal with your request and how useful and clear the information they send you is.

Our Recommendations

We would recommend that you contact around 5 estate agents to give you a quote for the total costs of selling, that way you can see not only the comparison between commission-based fees and fixed fees but also, and most importantly, the bottom line of the total costs involved.

Out of that 5, choose 3 estate agents to come round to give you a pre-sale valuation and to explain their services to you. This way you will be able to meet the person who will be marketing your home and find out more about their company and the service being offered.

 


 

Can we help you?

If you are thinking of selling then why not find out more about our great value fixed fee estate agency service.


Passionate about property and providing great service at value for money.

Cameron Stephen
Partner with Cameron Stephen & Co. solicitors and estate agents, Edinburgh
cameron@cameronstephen.co.uk
0131 555 1296

 

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