Choosing an estate agent to sell your home? One of the decisions you’ll need to make is how to pay them.
The ‘no sale, no fee’ model is a common one in the housing market. You’ll typically find it used by the more traditional estate agents.
Here we go into the details of what ‘no sale, no fee’ actually means, weigh up the pros and cons, and look at how it compares with other approaches.
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What are ‘no sale, no fee’ estate agents?
As the name suggests, you pay a ‘no sale, no fee’ estate agent once they have sold your home. Conversely, if they don’t get your sale over the line, you don’t pay them.
Where your home does sell, estate agents typically charge a percentage of the final sale price. It is commonly known as an estate agent’s commission. Sellers pay it once the sale has completed.
The percentage can naturally vary. But as a general rule of thumb, it can start at less than 1%. And it can reach around the 3.5% mark if you’re after a more comprehensive service from your estate agent.
So, let’s say your estate agent charged 1.5% of the £500,000 sale price, you’d pay them £7,500.
You can find out more in our dedicated guide on estate agent fees.
‘No sale, no fee’ estate agents: the pros and cons
To help you decide whether the ‘no sale, no fee’ approach could work for you, we’ve weighed up some of the key pros and cons:
Pros
‘no sale, no fee’ estate agents are results-based: you pay them if they achieve a sale
‘no sale, no fee’ estate agents are incentivised to provide a great service and complete a sale
selling a home can be an expensive process. But this is one bill you won’t have to pay until you’ve completed the sale
Cons
if your home is higher value, and your estate agent takes a healthy slice of the final sale price, you could end up paying a chunky fee.
How does the ‘no sale, no fee’ model compare with others?
The ‘no sale, no fee’ approach isn’t the only one in town. Some estate agents charge a fixed fee instead. This is where they charge the seller a set price rather than a slice of the final sale price. The seller often has to pay this upfront, though some firms allow payment further down the line.
One advantage of this approach is that you know your estate agent’s fee from the outset, which can help with budgeting. It can also (but not always) end up more affordable than a ‘no sale, no fee’ arrangement.
But you have to pay the fee regardless of whether your estate agent sells your home or not. And this could prove to be a hefty outlay without results.
Where and how can you find ‘no sale, no fee’ estate agents?
The ‘no sale, no fee’ structure is a standard one in the housing market. Pop into estate agent offices on the high street and the chances are, they’ll work on a ‘no sale, no fee’ basis. The cost tends to cover the full sales process, from pulling together marketing material, to completing the sale.
Meanwhile, many online and hybrid estate agents are known to charge fixed fees. They sometimes offer a ‘menu’ of optional extras too.
You may also find estate agents that offer both payment options.
Regardless, estate agents should be open and transparent about how they charge their fees. Check their website for details, for example. If you’re not sure, don’t be afraid to ask them. If you’re not satisfied or happy with what they suggest, you may be able to reach a compromise on certain aspects of their fee or service.
Finally, their contract should clearly state how they charge their fees. Always make sure you’ve read and understand their terms before you sign the paperwork.
You may be interested in:
How to choose a conveyancer or solicitor
So, is ‘no sale, no fee’ worth it?
It depends which estate agent’s fee structure and service suit your needs best.
A ‘no sale, no fee’ estate agent is likely to be highly motivated to sell your home. Plus, you get the peace of mind knowing that you won’t waste your money if a sale doesn’t materialise. That said, it could end up being costly, particularly if your home sells for a high price.
A fixed fee may seem a more affordable way to sell your home. But you’re likely to have to pay the estate agent’s fee irrespective of the outcome.
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FAQs
Do you have to pay estate agent fees if you decide not to sell?
You may have to pay some kind of withdrawal fee or cost if you pull out in the early stages of selling your home. After all, it takes time and effort to market a home for sale. Your estate agent will want a fair chance to secure a sale - and earn their commission.
But it all depends on what the contract with your estate agent states. That’s why it’s so important to read the small print in the paperwork.
Do estate agents charge if your house doesn't sell?
If you’ve hired an estate agent on a ‘no sale, no fee’ basis, and they don’t manage to sell your home, you don’t pay them.
But if you’ve picked an estate agent who works for a flat, upfront fee, and they haven’t been successful? Then yes, you probably will still need to pay them - though it’s always worth checking your contract for any particular terms and conditions.
Who pays estate agent fees?
The seller pays the estate agent. Those who have hired their estate agent on a ‘no sale, no fee’ basis normally pay the fee once the sale has completed, often out of the proceeds of the sale.