Figures from The Advisory show the average sole agency fee for UK estate agents has fallen 34 per cent since 2011, a decrease it attributes to competition and the rise of low fee online agents.
Vendors now pay estate agents an average sole agency fee of 1.18 per cent (plus VAT) to sell their home, down from a typical fee of 1.8 per cent in 2011.
The Advisory also found UK estate agents charge the lowest commission compared to most major global locations. Agents in Mexico typically charge 7.5 per cent, Japan 6 per cent, and France and the USA 5 per cent. Only China, with a typical fee of 0.5 per cent, and Hong Kong (1 per cent) are cheaper than the UK.
However, The Advisory’s research found that almost half of sellers (47 per cent) paid more than 1.18 per cent with 11 per cent paying between 1.5 per cent and 2 per cent.
More than 95 per cent of sellers chose to sell with a traditional high street estate charging a ‘no sale no fee’ commission that usually includes all marketing materials and accompanied viewings. Less than 5 per cent opted for hybrid online agents who charge lower fees upfront, but levy additional costs on top.
The Advisory found sole agency agreements were the most common fee structure (71.4 per cent), followed by fixed fee (19.1 per cent) and multi-agency (4.8 per cent).
The Advisory founder Gavin Brazg says: “It’s sad to see so many agents dropping their fees in response to the ‘perceived online threat’. It’s also a mistake as the threat is far larger in the mind than it is in reality. Market share for hybrid agents is actually very low given the amount of money they’ve spent on marketing.
“Most sellers do not want ‘cheap’. They want the extensive local expertise and high professionalism of a bricks and mortar high street agent. As long as you can justify your fees and differentiate your service, our figures show many sellers are prepared to pay up to 2 per cent (+VAT), if not more.”