An insurance firm claims estate agents are taught not to quote VAT in fees until the final bill.
A statement from Admiral Home Insurance, advising prospective sellers how to choose their agent, warns vendors they may be in for a shock unless they understand any price quoted early in a transaction excludes VAT.
Admiral says it has spoken with four estate agents before issuing the advice, with individual industry experience running from seven to 22 years.
On VAT the Admiral statement quotes an unnamed senior agency director from Essex as saying: “VAT also plays a massive part in the whole process. Estate agents are taught not to quote ’plus VAT’ until the final bill so always think – and ask - is there is going to be 20 per cent on top of whatever he or she is going to offer me? Otherwise you could be in for a shock with the final bill.”
The same advice to vendors quotes another agent - this time an unnamed agency owner from Suffolk - who says: “You should pick an agent that is clear, open and honest about their fee from the offset ... If you can, find an agent who offers a percentage-based fee rather than a fixed fee. This is because with a fixed fee, if your property price comes down, the agent would still get a higher amount - although you’re not getting as much for your home.
“When it comes to negotiation, avoid going into battle over the agency fees because you’ll be going up against someone who is a trained salesman and negotiator.”
And an Essex-based senior director is quoted: “Bigger corporate companies have a set table of fees that they charge so you’ll probably pay a lot higher than you would through a small independent agency where you’ll have a lot more flexibility. Smaller independents tend to give a better fee and a more personalised service.”
The same advice claims that agents put properties on the market for up to £20,000 more to give room for negotiating, while sellers investing £5,000 on home improvements could expect to add up to £30,000 to the property value. It also says spending £40 on paint could be the difference between getting the full asking price and getting less.