Selling your house can be an overwhelming process, especially when it comes to understanding the various fees involved. One of the most significant costs you’ll encounter is the estate agent’s commission. But when exactly is this commission payable? Let’s break it down.
The Key Moments: Exchange of Contracts and Completion
The estate agent’s commission is typically due at one of two key points in the selling process: on exchange of contracts or on completion.
1. Exchange of Contracts: This is the point in the sale process where both buyer and seller sign and exchange legally binding contracts. Once this happens, the sale is legally binding, and the buyer is committed to purchasing the property. In some cases, the estate agent’s commission becomes payable at this stage. However, this is less common and usually specified in the agent’s contract.
2. Completion: More commonly, the commission is payable on completion. Completion is when the remaining purchase price is paid by the buyer, and ownership of the property is transferred. This is the final step in the sale process, and it’s when the proceeds from the sale are typically released.
How is the Commission Paid?
The payment of the estate agent’s commission is usually handled by your solicitor. Here’s how it works:
- Upon completion of the sale, the solicitor receives the funds from the buyer.
- The solicitor deducts the estate agent’s commission and any other fees due, such as conveyancing costs and mortgage repayments, from the sale proceeds.
- The solicitor then pays the commission directly to the estate agent.
This process ensures that you don’t have to worry about making the payment yourself; it’s taken care of seamlessly during the transaction.
Additional Fees to Consider
While the commission is a significant cost, it’s not the only fee you might encounter when working with an estate agent. Here are a few other fees to be aware of:
Marketing Costs: Many estate agents charge upfront marketing costs to cover the expense of bringing your property to market. These costs can include:
- Professional photography
- Energy Performance Certificate (EPC)
- Portal listings (such as Rightmove and Zoopla)
- For sale board
- Videography
These fees can vary widely between agents, so it’s essential to clarify what’s included and how much it will cost when you sign the contract.
Withdrawal Fee: Some estate agents also charge a withdrawal fee if you decide to remove your property from the market. This fee can be substantial; we’ve heard of local agents charging up to £2000. Always check with your agent before you sign your contract to avoid any surprises later on.
Understanding when and how an estate agent’s commission is payable can help you plan your finances better and avoid any unexpected costs.
Always read your contract carefully and ask your agent to clarify any fees you don’t understand. With the right information, you can navigate the house-selling process with confidence and ease.
If you have any questions or need further clarification, feel free to reach out to your estate agent. They are there to help guide you through every step of the sale process. Happy selling!
To arrange a free, no-obligation inspection of your property, please contact us. We will be happy to assist.
