Many mainly corporate agents are offering potential vendors £300 upfront payments in return for lower overall fees, but agents should tread carefully.
4th Mar 20260 180 2 minutes read Nigel Lewis
Difficult economic times require innovative approaches particularly for estate agents operating within some of southern England’s more moribund sales markets.
Consequently more estate agencies, I have been told, are charging vendors up-front sales fees prior to marketing the property in exchange for a lower overall fee at completion.
While this kind of tactic doesn’t work within a fast-moving market where buyer interest is high, this practise is returning as many agents faced with limp demand have spotted a well-known path to increased turnover.
The deals offered to vendors vary but at the moment agents are charging circa £300 for this kind of up-front fee structure agreement, which in turn saves vendors some £1,000 to £1,500 depending on the property value.
On the face of it this is turnover/sales pipeline madness – if the property does sell then the agents involved will ‘lose’ a lot of money. But it’s a cute way of gaining an instruction, particularly if the property has been marketed unsuccessfully by a rival agent and is out of contract, and it also generates some risk-free and much-needed cash; vendors don’t get their money back if the property fails to find a buyer, remember.
So what do estate agents think of this practice, which appears to be more popular among brands owned by the big ‘pressure sales’ orientated corporates.
ScepticalIndependent North London estate agency MiHomes MD Nick Kyriacou is sceptical, telling me that he not an advocate of lower sales commission fees in any form because they are reflective of “low quality professional estate agency work” and that he would not charge any up-front costs.
His firm, however, is trying out some novel approaches to selling homes given the current housing market. MiHomes does not employ a minimum sole agency period and instead asks vendors that they pay their property’s marketing costs should they de-instruct his company.
“We don’t want clients to have any barriers not to work with us, and I believe zero-week sole agency periods should be mandatory,” he tells me.
“I have seen three months, six months and even nine-month contract periods this year alone – it’s not consumer centric, and I can’t get my head over how a home owner can give such control of their property away for such an extensive period of time – it’s even more disappointing that agents push for it.”
Propertymark is more supportive of ‘up-front’ fees in return for lower overall fees, but says that while there is a place in the market for a range of pricing structures including fixed or advance payment arrangements, they should be “transparent, clearly understood and demonstrably fair”.
Challenging market
Nathan Emerson, Chief Executive, Properthmark
“In more challenging market conditions, we may see some businesses reviewing how they structure their fees,” its CEO Nathan Emerson tells me.
“While an up-front payment in exchange for a lower overall commission may suit some sellers, it also transfers a greater degree of risk to the consumer if the property does not sell.
“That is why it is essential that agents provide realistic valuations, explain the likelihood of a sale, and outline exactly what service will be delivered for the fee charged.
“Propertymark’s member agents are bound by professional standards and legislation which require them to act in their clients’ best interests, provide honest advice, and never use misleading or high-pressure sales tactics. Any agent recommending an up-front fee arrangement should be confident that it is appropriate for that individual client’s circumstances and should ensure the client fully understands the potential implications.
“Ultimately, whatever the fee model, consumers deserve clarity, professionalism and a service that offers genuine value.”
Which in other words means estate agencies trying out this kind of arrangement should tread carefully.
Tagssales commissions 4th Mar 20260 180 2 minutes read Nigel Lewis Share Facebook X LinkedIn Share via Email
