How estate agent commission works
Most agents charge a percentage of the price your home actually sells for. That percentage is called the rate of commission. Citizens Advice describes the usual rates as running from under 1% to 3.5%, and says it is worth checking exactly what the fee covers.
Because the fee is a percentage of the sale price, it rises and falls with the price. A higher sale price means a higher fee in pounds, even if the percentage never changes.
VAT may or may not be included in the figure you are quoted, and Citizens Advice tells sellers to check. GOV.UK gives the standard VAT rate as 20%. Always ask whether a quote includes VAT, because a fee shown without it will cost a fifth more once it is added.
A worked example (an illustration of the maths, not a market rate)
The figures below are round numbers chosen to show how the arithmetic works. They are not typical fees, an average, or a quote. Swap in your own price and the rate in your agent's contract.
| Sale price | Fee rate (illustration) | Fee before VAT | VAT at 20% | Total fee |
|---|---|---|---|---|
| £300,000 | 1% | £3,000 | £600 | £3,600 |
| £300,000 | 1.5% | £4,500 | £900 | £5,400 |
| £300,000 | 2% | £6,000 | £1,200 | £7,200 |
The sum is: sale price multiplied by the rate gives the fee before VAT, then add 20% on top. A 1.5% fee on £300,000 is £4,500, VAT adds £900, and the total is £5,400. Half a percentage point on this price is worth £1,500 before VAT, which is why the rate is worth a conversation.
This is only the agent's fee. Selling also involves conveyancing, an energy certificate and other costs. Our cost of selling guide walks through the rest, and the sale method comparison tool lets you compare routes on what you would be left with.
Sole agency, joint agency and sole selling rights
The kind of agreement you sign changes who you might owe money to. Citizens Advice explains the main types:
- Sole agency: you instruct one agent. If you find the buyer yourself, you do not owe that agent commission.
- Sole selling rights: you instruct one agent, but you still have to pay them if you find the buyer yourself.
- Joint or multiple agency: you instruct more than one agent. Citizens Advice says the commission is usually higher than under a sole agency.
GOV.UK adds a warning for anyone using more than one agent: you may owe fees to several of them when the home sells, depending on the contract and on whether any agent has sole selling rights. Read the contract before you let a second agent show the property.
Upfront, withdrawal and other fees
A percentage on completion is not the only way agents charge. Some firms ask for a fee up front, a fee if you withdraw from the sale, or charges for extras such as photography, floorplans or a for-sale board.
The Estate Agents Act 1979 deals with this directly. Under section 18, before you enter into the contract the agent must give you:
- the circumstances in which you become liable to pay them;
- the amount of their fee, or how it will be worked out if the amount cannot yet be known;
- any other payments that might become payable, such as to a third party, and an estimate of the amount.
Ask for these in writing, in plain terms. If a fee is described only as "admin" or "marketing", ask what it is for and whether it is refundable if you do not sell.
What you can negotiate
Everything in the contract is a term you agree to, so most of it can be discussed before you sign. The points that matter most are:
- The rate. Get fee quotes from more than one agent and ask each to explain what is included. A lower rate with fewer services is not automatically a better deal.
- Whether VAT is included in the quoted figure.
- The type of agreement (sole agency, sole selling rights or joint agency) and how long it lasts.
- How to end it. Ask how you can withdraw, how much notice is needed and whether any fee applies.
- What is included. Photography, floorplan, board, listing on the main property portals and who pays for them.
A valuation is not a promise of a sale price. Compare agents on the evidence behind their figure, not just on the headline number. Our free house valuation gives a sourced range for your postcode, which is a useful yardstick when an agent quotes a figure.
What the law requires of agents
Three pieces of law are worth knowing about:
- Estate Agents Act 1979, section 18. If the agent does not give you the required information before you sign, the contract cannot be enforced by the agent except by a court order, and a court can reduce or cancel what you owe.
- Consumer protection law. Since 6 April 2025 the old Consumer Protection from Unfair Trading Regulations 2008 have been replaced by Part 4 of the Digital Markets, Competition and Consumers Act 2024. It prohibits unfair commercial practices, including misleading information and leaving out material information a consumer needs to decide.
- Redress schemes. Anyone doing estate agency work must belong to an approved redress scheme. GOV.UK names The Property Ombudsman and the Property Redress Scheme, and advises you to ask the agent which one they belong to.
None of this sets the price an agent may charge. It sets what they must tell you.
Comparing the routes: agent, online agent, auction, cash buyer
Fees are only one part of the picture. Each route also differs in how the price is set, how long it can take, and what can go wrong. Here is a neutral side-by-side.
| Route | How you pay | What to ask |
|---|---|---|
| High street estate agent | Usually a percentage of the sale price plus VAT, set out in the contract | Rate, VAT, contract length, withdrawal terms |
| Online estate agent | Check the model: some quote a fixed fee, some a percentage | When each part is payable and what happens if you do not sell |
| Auction | Auction house charges and the seller's own costs, which vary by auction house | Fees, reserve, and the timetable to completion |
| Cash buyer | There may be no agent fee, but the offer is the buyer's own figure | What the offer is, how it is worked out, and what you would receive after all costs |
No route is best for everyone. Compare what you would receive after every cost, and how long you can afford to wait. Our guide to auction versus estate agent and the UK auction fees explained guide cover two of these routes in more detail.
Before you sign: a short checklist
- Get written fee terms from at least two agents.
- Ask whether each figure includes VAT.
- Ask for every other payment that might become due, and when.
- Check the type of agreement and its length.
- Ask which redress scheme the agent belongs to.
- If anything is unclear, ask a conveyancing solicitor to read the contract before you sign.
If something goes wrong
Complain to the agent first. If you are not satisfied, GOV.UK says you can take the complaint to the redress scheme the agent belongs to, and that The Property Ombudsman will investigate a complaint for free.
This page is general information, not legal advice. For advice on a specific contract, speak to a conveyancing solicitor.