The average estate agency fee has fallen to almost exactly 1% – and is likely to fall further, despite mounting costs for agents.
Peter Knight, of the Property Academy, said that moving off the high street and/or going ‘hybrid’ would not be a solution for most agents because of their marketing and staffing costs.
In the 2017 Home Moving Trends Survey carried out for this month’s EA Masters event, 5,838 home sellers were asked about fees.
Knight said: “In simple terms, you can break things down into three thirds.
“One third pay more than 1%. One third pay less than 1%. And one third pay 1%. The average fee is now, as near as damn it, 1%.
“And as if this isn’t concerning enough there’s a worrying trend – the fees are going even lower.
“Those currently selling are paying less in percentage terms than those who have sold within the last 12 months.
“This confirms data Stephen Hayter of My Home Move shared with me that estate agent fees fall between 0.1% and 0.15% every 12 months.
“On that basis, in the first quarter of 2019, the average fee could be as low as 0.75%.”
The study of home movers showed that relatively few (30%) were selling for over £1m, and most (60%) were selling for £250,000 or less.
Knight told EYE: “This is the tenth year we’ve surveyed people who are currently selling a property and we’ve seen a marked reduction in the average fee.
“In 2011, 76% of sellers were paying in excess of 1%, whereas today it’s just 31%.
“We will be sharing further insights from this survey and also two others, the 2017 Landlord Survey and 2017 Tenant Survey, at the EA Masters.
“In addition, we will also be revealing insights from our 30,000 mystery shops for the Best Estate Agent Guide and highlighting what it takes to be exceptional.”
Knight said the continuing reduction in fees cannot continue – “unless the industry is prepared to experience even greater levels of change than those of the last few years”.
He said the main costs of staff and marketing are going up, not down: “So, while a small saving can be achieved by leaving the high street and working from a conventional office, or from home, or going ‘hybrid’, this isn’t enough to compensate for the reduction in fees.”
Knight said that the subject will be tackled at the EA Masters on September 22. There are just 50 tickets left for what will be the largest estate agency event ever staged in the UK.
Details here – where you will also find a rather stirring short video about the Best Estate Agents Guide, also to be part of the event: