Unconventional Fee Arrangements When Selling Your Property

When calculating estate agent fees, know that not all estate agent fees are created equal. Sometimes, it takes a bit of creativity to create an arrangement that works for both you and your agent. 

If an agent is presented with one deal where they’re guaranteed a 2% fee or a second deal with a 2.5% fee and another 20% for anything over the asking price, which deal do you think they’ll work harder for? 

Money talks and the more opportunity you offer your agent, the more likely they are to give your house sale all of their effort and attention. 

In theory, all estate agents are obligated to act in your best interest and do everything they can to secure you the best price and results. In fact, many agents take pride in doing just this (especially if they’re collecting commission). 

Unfortunately, no one policies this aspect of the sale process, which means not all agents are this honest or this proud. In either case, adding motivation and incentive for agents will no doubt positively impact your sale. 

Think of this small investment as insurance that you’ll receive the agent’s best service and performance.

So, what type of unconventional fee arrangements can you make? Let’s take a look at the options.

Sliding Scale Fee Incentive 

This payment option motivates estate agents to get you premium pricing for your property, fast! The sliding scale rewards agents who sell the property for above the asking price, but also penalizes them if they fail to do so.

For example, if your home is priced at  £450,000, the agent will receive the standard fee of 1.5% for getting the asking price, but will only receive 1% if they fail to meet this threshold. In turn, they can receive 2% for getting over  £450,000. 

You can change these stipulations, as long as both you and the agent agree upon them. You can also add in a timeline that rewards the agent for selling your property in less than 6 weeks, for example.

The agent can also be penalized for not selling your property in the time frame promised.

This incentive works well with agents who guarantee they can sell your home for top dollar and quickly. This sliding scale forces them to put their money where their mouth is — literally!

The agent’s reaction to this arrangement will tell you a lot about their abilities also. One who agrees without hesitation is confident in their abilities, whereas an agent who falters may not be as good as they claim. 

Profit Share Incentive

In this scenario, if your home sells for above the targeted price, the agent receives a percentage of this additional money. This method is sometimes combined with the sliding scale incentive to penalize agents for not reaching the targeted price. 

Profit share is sometimes used to negotiate a lower base fee while also motivating the estate agent to reach the target price or above.

Multi-Agency Incentive

Some people find this payment option a bit ruthless, but it’s essentially a matter of winner takes all. You hire two estate agents and whichever one gets you the best price, “wins”.

You might be tempted to let the 2 agents share the fee but this isn’t recommended.

Many professionals take the multi-agency approach, and here’s why.

Competition is one of the greatest motivators — especially when it comes to money. When one estate agent is battling another for the claim to your sale and profit, they’re inherently motivated to work harder and faster. It’s like a race to the finish!

This competition also encourages agents to see every prospect to the end and fully negotiate all offers. If they don’t, their rival has a chance of getting the upper hand and stealing the deal from underneath them. 

Be prepared though, this approach can be extremely stressful! This option is best for sellers who have experience working with multiple agents at once. 

Personal Incentive

For sellers who want to sell their property fast and need the agent’s undivided attention, you can offer a personal cash bonus from your own pocket. 

For example, you can offer the agent an additional £500 if they sell your house in 2 weeks or if they find a buyer willing to pay the asking price. 

Just be sure that all cash or personal bonuses are cleared through the agency owner or manager before proceeding.