Estate agent fees can quickly add up but by knowing how to negotiate, you can actually bring them down quite drastically. Haggling is not traditionally the norm in Britain however, the following tips will help you learn how to negotiate the selling fees and will help save you quite a bit of money in the end.
A key factor to think about when negotiating with an estate agent is that they need you more than you actually need them. The following are examples of some money saving tips on ways to cut costs on estate agent fees.
Deviances to Negotiating
Corporate run estate agencies are typically more difficult to negotiate fees with than those that are smaller and run on their own. Estate agencies that are corporately run have stricter policies in place when it comes to commission and their employees need to follow those guidelines. These corporate chains can get away with these outrageous standards and practices because many buyers and sellers will not have done their homework and go along with these high commission rates.
This shouldn’t concern you as the smaller, independent agencies are easy to deal with and will have more room to bargain, yet will still strive to give the highest quality in service. There are a variety of things to think about when consulting with a prospective estate agent on the sale of your home.
Some Things to Keep in Mind
Typically the estate agent who is the most successful in their field will be more difficult to deal with than an agent with a smaller market when it comes to negotiating. Just because an estate agent is well-established and is popular in their area doesn’t mean they will give you the best service.
Do your homework and speak with a number of agents in the area from both nation-wide and smaller firms to get an idea of the types of services and pricing they offer. Remember, they will be working for you, even though most will make you feel like it is an honour for you to have hired them. Never choose an estate agent that you are uncomfortable working with. Select someone that you will be glad to work with and they will get the job done by selling your property.
Consult with the agent and discuss all business terms up front. They should be fair and lay out everything ahead of time. There should be no additional costs or fees that you will have to incur at a later date. Select an agent based on their selling game plan instead of how charismatic and charming they are in making their sales pitch.
Be Prepared for the Negotiation Process
An estate agent can’t stay in business if they turn away customers, so remember that when it comes down to discussing their fees. They would all like to charge 2 to 2.4 percent including the value added tax. However, it’s more realistic to get them closer to 1 percent including the value added tax. For a dwelling that costs over £500,000 it would be wise to get the estate agent down to 0.75 percent with the value added tax.
You can prepare yourself and your home for a major discount from any estate agent by showing your home well and being realistic when it comes to the asking price. If your home shows well both inside and out, potential estate agents will vie for your business. Setting your home at a fair price tells both the buyers and agents that you are intelligent and serious about selling your home. If your home is an easy sale, most agents will discount their fees to sign you on as a client.
How to Negotiate
Asking for a reduction in sales fees typically doesn’t work. You need to take a strong stand and leave any discussion on the commission for the end of the appointment. This allows the agent to consult with you on the property, their sales plan and how much commission it will yield in the end.
Ask the estate agent what type of Sole Agency Contract Fee they are talking about and when they give you a number, shake your head in disgust and let them know that you cannot agree to that price. They need to know that you will not consider making them your estate agent until they agree to a price of 1 percent and then get their reaction. Whether they relent right away or not, show them the door and thank them for their time. Notify them that you have more agents to interview and that you will let them know when you have made your decision. Make sure to do this with each agent that you meet with. Keep detailed notes on their fees, business plan and the impression that the agent made upon you.
If you have found an agent that you are interested in and would like to work with, but they have not given you the lowest fee, ask them back. Let them know that you are interested in their services and those of another agent who gave you a better deal. Make them understand that you feel that both agents can give you the best service but you will need to give the other agent the listing because they gave the lower fee and see if they can match their commission.
They will probably give you a number of reasons that they can’t meet their reduced fee but most times they are just bluffing. The estate agent then has a chance to lower their commission fee or it will be up to you then to decide if the fee is low enough to your liking.
Knowing how to negotiate a good deal can save you a lot of money if you stand firm. Make sure to be persistent and stand your ground and you will be successful in lowering your commission fee.