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Estate agent selling fees go up as prices drop

Wed, 30 Jul 2008
The downturn in the housing market has led to estate agents increasing their fees even though property prices are falling.

The usual fee is based on a property’s value and is between 1 – 1.5 per cent. Some estate agents have increased this to 2.5 per cent to boost their earnings.

Some say the housing market is worsening as the average home now costs £168,500 a drop in value of £7,800 since last summer according to Hometrack, the property research company.

David Beakon, senior negotiator at Bonnets Estate Agents, Brighton said they had a new flat fee of 2 per cent on multiple agency properties (where more than one estate agent is used) and in recent weeks the amount had reached 2.5 per cent. He said, "A lot of people are getting desperate to sell and so they put their property on with a load of agents. The chances of us selling it when we are competing with five other agents are slim and in a difficult market, you don't want to spend the time on these sorts of properties if you are not going to get a good fee.

"If people walk away because the fee is too big then that is fine with us if it is something that we do not want to deal with."

Chris Brown, president of the National Association of Estate Agents said, by increasing rates estate agents will become uncompetitive.

He added, "As we are all aware, the market at present is competitive, so it would not make sense for agents to raise their fees significantly as at the end of the day they need to compete with each other to secure business.

"After all, the more competitive they are at present the better it is for both the business and their clients."
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