Hatched used to do the same, but following a brush with the Advertising Standards Authority last year on a largely unrelated matter, now quotes prices inclusive of VAT. Please advise. Our approach has always been to let them know from the outset so there are no hidden extras or shocks – Our engagement form has the total to pay on there and we even go the extra mile and give them some variables depending on what they sell for. Unfortunately sales and transparency does not go hand in hand (this can be any industry). Home > Business & Finance > VAT on estate agents' fees. Sole selling rights works the same as sole agency, but you have to pay the estate agent even if you find your own buyer. All estate agents, whether they’re an online, high-street or hybrid agent, are required by law to list their fees with VAT included according to The Property Ombudsman. Fee flexibility is about controlling one’s register and local competition, the very opposite of a cartel. It says of its prices that they all are subject to VAT, making her a potential high-profile case for the advertising watchdog. Because the rate of VAT changes from time to time, It does cause a bit of a problem for quoting fees that will be charged in the future, like check outs and tenancy renewals, for example. But which agency will break out of the long tail and lead by (better) example? Letting agent fees should also be advertised as inclusive of VAT. The VAT rate applicable to that commission is the same VAT rate which applies to the goods or services supplied. By continuing, you agree to receive cookies on our website. THEN… you just had to play the prat card and bu99er up your credibility in this industry once again…. What if VAT changes to 30% subsequently … you can still only charge a total of £120 ? We fund our journalism and website through advertising on the site and email marketing on behalf of advertising clients to our subscriber database. Having written for Huffington Post and Film Criticism Journal, Martha now regularly researches and writes advice articles for everything moving house related. How does that fit with transparent and clear? ONLY when a Fee is at a 'Fixed Rate', does it state that this should be given on a VAT-inclusive basis. Today! However, while letting agents are obliged to show fees along with rents, there is no legal obligation on sales agents to show their fees. It does not apply to sales agents. They are needed. You will usually have to pay online estate agent fees upfront whilst many traditional estate agents offer a ‘no sale, no fee’ service. Are other service industries being forced to state their fees in a similar fashion? A featured listing on Rightmove will instantly put your house at the top of the searches. Now, with more competitive fee structures common-place most agents don’t want to flaunt their higher fees in case it affects valuation enquiries – most aren’t even upfront with fee costs if asked during a telephone or office enquiry. The other difference with estate agents fees is VAT runs into hundreds of pounds, if not thousands. How much are estate agent fees for selling? Estate agent fees are typically negotiable and it’s recommended that you try to haggle with them. So, for example, a percentage sales fee of 2.5% plus VAT should be advertised as 3%. 2.25% sole got reserved for the  properties and the vendors I didn’t like  or the unrealistic  expectations. “If agents do take note of this all I can see is further erosion of fees.”. Quite a number of our tenancies last many years and in the past when rates changed we saw the effect of this. When you use an estate agent, you will have to sign a contract. How does your Fee package compare to your local competitors – lower, middle or higher end of the scale? Most agents by me are week on fee cannot justify it, or at least their staff cannot. Many people are turning to online estate agents as they usually offer a fixed fee for their service, which works out a lot cheaper than high-street agents. But be realistic, the average estate agent fee is 1.18% plus VAT and anything under 1% or above 3% should be a red flag. Although i agree more transparency is needed the public are partially to blame, where we live in a throw away society alot of them are only interested in ‘cheap’ even if it does not fit their requirements. Almost all online estate agents will require an upfront payment as they offer a fixed-fee service. “The price should be transparent and clear” in September 2012 you boasted you could get £2000 out of someone who thought they were paying £400. Traditional estate agents will provide their quote based on the price of your house, the package you choose and the progress of other local properties. (Last updated on 23rd Oct 2020) Irrespective of where an agent is on fees they should display it. Mr Day – right up to your last sentence I was with you all the way. In terms of transparency it then pulls the rug from under those who advertise much cheapness listing fees  but who then rely on additional services to bolster their overall  fee inclusive of VAT to well over double the  loss leader advertised price. It’s advised to never pay upfront fees, as you can never guarantee a successful sale. Most are not strong enough to justify a good fee without including VAT! This is why we require daily newsletter subscribers to also kindly accept the receipt of the email marketing from us. Firstly good to see Hatched have got the old press release thing going again, in fairness hes picked a subject he feels strongly about and added a sprinkle of self promotion into it but is this really a problem the consumer is facing? You may opt out of both at any time. The 40, 50 and 60 year veterans might know otherwise but I suspect what you want to portray as fee fixing was  a more professional and informed regard and understanding of fees. We fund our journalism and website through advertising on the site and email marketing on behalf of advertising clients to our subscriber database. Next question? The CAO ruling therefore only applies to sales agents who advertise their fees. Education is needed overall, so much so that these ‘life skills’ should be taught in schools. We can also sort out your property surveyor and removal company to complete the selling and moving house experience. The authorities are targeting an industry that has nothing to be blamed about for the actual problems with housing in the UK and that is there simply is not near enough properties. You must be logged in to like or dislike this comments. You can incentivise your agent, offering a higher percentage commission if they sell quickly (say, within six weeks), with the commission level diminishing as time goes on. Sarah Beeny’s Tepilo does not include VAT. Yet according to TPOS Code of Practice (Effective from 1 August 2014): "5i – Where the fee is a percentage you should clearly state whether VAT is chargeable and must express it as an actual amount plus VAT." Again, it is permissible to include an “inclusive of VAT” statement. So, Harree, from that may I just ask why you are seemingly happee (sorree – couldn’t resist…) to be a middle runner? The price should be transparent and clear. High-street estate agents will include the following in their fee: Online estate agents will charge extra for these services. To view more details on how we manage your personal data please see our privacy policy.). They will charge a higher fee but you only have to pay commission to the estate agent that sells your house. Agents must not show fees as being a sum or a percentage plus VAT. the subject of including VAT is not new and from memory goes back to price marking orders in 1991 and 1999 but like so many other 100s rules/regs agents will bend them as long as they can a) make a quick buck b) get away with it, Hmmm… taking TPOS "with a pinch of salt" isn't something that I would heartily recommend, JungleProperty – but at the end of the day I'd expect Mr Hamer to appear as defence witness were a Member agent, having followed the published Code, ever taken to court…, 'None' of the members I know follow the code and as far as I am aware nobody checks that members follow the code so although it is all written with good intent you may as well run the lot through the shredder and save yourself the money on expensive window stickers. How to choose an estate agent when selling your property? Don’t get me wrong, I am with you on the transparency thing, my point is what is wrong with “Plus VAT at 20%” being displayed? The correct way is simply (for example)……..the fee will be £100 plus VAT (total inc VAT £120) or the prevailing rate of VAT when the invoice is raised. The ASA said that the agent should have used a figure of 1.08%. I think many agents simply don't know. Leaders, however, quote prices plus VAT – for example, an admin charge of £275 plus VAT. We will never pass on your information to any third party and our advertising clients will never have access to your information. Sadly most agents follow the pack and struggle to even separate themselves from the online agents like PurpleBricks – exactly why Onthemarket banned them from their website. What is a Building Survey or Full Structural Survey? This is worth keeping in mind if you decide to sell your house online. House There will always be agents. But at least I asked, can someone tell me where the number is to report the tyre industry to the ASA? You should stay away from this contract. When an average fee is more than twice the ‘grabya’ price I consider that a thoroughly dishonest and shameful practice, far worse than not catering for those who flunked KS2 maths. It’s recommended to never pay fees upfront unless you are confident your house sale will go through successfully. Wanted even. Eye took a random look round some agents’ websites. eMoov, for example, quotes prices plus VAT. What questions to ask estate agents when selling? We do, I was simply making an observation – In fact when people contact us and ask what our fees are we naturally tell them “all inclusive and no hidden extras, what you see is what you pay” or words to that effect…A model we have successfully used since we started out on our own and we have had no problems with it. Save 70% off the Cost of Your When the industry can not be brandished with 'all agents are the same', agents will finally have dug their heads out of the sand. You should discuss this with your estate agent before signing any contracts. Don't ask me why – maybe TPOS don't think that we can work out what 120% of our Fee is… which is more reason that we SHOULD, rather than leave the vendor to work it out for themselves (or, worse, forget about it completely until they see the bill at the end…), I would take what TPOS say with a large pinch of salt. The agent is liable for the VAT on the supply deemed to be supplied by him or her to the customer. There’s an interesting blog below. As mentioned above, online estate agents offer cheaper and fixed fees, but this means you will have to pay upfront. It will ultimately depend on your personal preference, how much your house is worth and how quickly you want to sell your house. Your details will only be used to send you the above emails. The fee should be clearly discussed at the start of the marketing campaign, he says, as the agent’s fees do vary according to certain circumstances. It should be absolutely clear to the consumer the total they are paying. Your email : And how many know that they should not be doing so – for example, stating £100 + VAT? They should simply advertise a rate of 3.525% in your example (or more probably 3.5%) 22:30 Thu 29th May 2008. So much for transparency! I have been  in Agency for  best part 30 years and can not remember a single  case of  cartel fee fixing so  no we don’t all know it.

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