When selling your property, it’s essential to choose an estate agent who genuinely works in your best interest. Some agents might entice you with the promise of a low or even zero percent selling fee, but this approach often hides significant drawbacks. Here are three crucial reasons why you should never sell your property with a cheap fee estate agent.
1. Hidden Costs: Buyer Fees Impact Your Selling Price
Agents who claim to offer a cheap selling fee often shift their charges to the buyer, typically up to 5 or 8 %. While this may seem like a good deal at first, it effectively means you are still paying to sell your property. Here’s why:
Buyers will account for this additional fee by deducting it from the amount they are willing to offer for your property. For example, if a buyer knows they need to pay the agent a 5% fee on top of the property price, they are likely to reduce their offer accordingly. In the end, you might end up receiving a lower sale price, which negates the supposed savings of a cheap selling fee.
2. Conflict of Interest: Who Is the Agent Really Working For?
One of the most critical aspects of hiring an estate agent is ensuring they represent your interests. When agents charge fees to the buyer, the buyer becomes their client. This creates a conflict of interest. You might think the agent is working for you, but in reality, their loyalty lies with the buyer who is paying their fee. In most cases, the buyer is paying the higher fee so the agent is obligated to act in the buyer’s best interests and not yours as the seller!
Having an agent who is genuinely dedicated to your interests is crucial, especially in a complex transaction like selling a property. A true estate agent should act as your advocate, negotiating the best possible terms and price for you, whilst still providing best-practice advice to the buyer.
3. Limited Buyer Pool: Excluding Potential Buyers
Charging buyer fees can significantly reduce the pool of potential buyers. Many buyers, particularly in a high-interest rate market, struggle to afford both a mortgage deposit and an additional fee for the agent. For instance, on a £250,000 house, a 5% fee amounts to £12,500.
If you were selling like everyone else and chose an agent who works for you, that £12,500 could be used by the buyer as part of their purchase price. This might allow them to make a higher offer for your property. By excluding these buyers, you potentially miss out on achieving a better sale price.
In addition, in many countries, it is illegal to charge buyers fees, precisely because of the conflict of interest. This means that many buyers will not deal with agents who charge them. This means that you are reducing the number of buyers for your property even more!
The Bottom Line: If It Sounds Too Good to Be True, It Probably Is
The promise of a cheap selling fee might seem attractive, but remember, nothing in life is truly free. Hidden costs, conflicts of interest, and a reduced buyer pool can all lead to a lower sale price and a less satisfactory selling experience.
Our Advice: Choose Your Agent Wisely
Interview several registered (more on that in another blog) and reputable estate agents, ideally those recommended by people you trust. Look for agents with a strong track record of recent successes and a clear strategy that aligns with your goals. Check their Google reviews and if they offer free advice on social media for example. Choose the one you feel most comfortable with, and motivate them with a fair fee that is only paid upon achieving the desired outcome.
Even if you are tempted by an agent offering a cheap selling fee, consider discussing an alternative arrangement. Let them know you prefer an agent who works for you, and offer them a competitive fee to ensure your interests are prioritised throughout the selling process.
In summary, being cautious of agents who charge buyer fees can help you avoid hidden costs, ensure you have an agent working in your best interest, and keep your property open to a larger pool of potential buyers. By choosing wisely, you can achieve the best possible outcome for your property sale.
For an informal chat about the sale of your property just get in touch with our team by phone, email, WhatsApp or social media
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