High street estate agents cashed in on almost half-a-billion pounds over the past 12 months over people’s reluctance to haggle over fees, with 82% of home sellers admitting that they agreed the first fee quoted by the agent, online estate agents Housesimple.com has found.
Some four in 10 (41%) were unaware that they could have negotiated their commission fee, with 29% wishing they had negotiated a lower rate after they had agreed it.
Sam Mitchell, chief executive 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.”
On top of this, almost half (46%) 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%) of those home sellers polled said they paid at least 1% commission to the estate agent, with more than a quarter revealing they paid fees between 1.4% and 2%.
Home sellers could potentially be saving millions of pounds every year in fees if they were prepared to negotiate with the agent.
If home sellers over the past 12 months had haggled down the initial quote by just 0.25%, they could have saved £487m in agent fees. For example, haggling a 1.25% fee down to 1%, would equate to a saving of £1,500 on a property on the market for £500,000.
Some 89% said that estate agents should be more transparent with their fees. 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 such as Housesimple, who only charge home sellers £995 (inc. VAT) on completion of a sale, there is even more reason to haggle.
Mitchell added: “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?’
“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.”