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Buying and selling property is a complicated business and experts are always needed, thus a suitable estate agent payment solution is a necessity.
Estate agents need payment for a variety of services, with their commission from a property sale being the main one. Many estate agents also provide additional services which do not work off of a commission. Some of these services will have a fixed price, while others may be charged as a retainer or by the hour.
Whichever payment is required, clients can make estate agent payments online with a recurring payments system that makes it easy and straightforward. Let’s look closer at estate agent payment terms, including manual payments and automatic payments.
Estate agent commissions
One-off commission-based payments are easy to make using online payment solutions. The commission paid to estate agents is always based on the final sale price of the property being sold. The average rate of commission varies, but will usually be somewhere between 1% and 4% depending on certain circumstances.
One of the main factors that determines the rate of commission is the amount of estate agents that have been enlisted to find a buyer for the property. When a property is listed with several agents instead of just one, then the risk of not being the agent who puts the sale through is much higher for each agency. Thus they will usually charge a significantly higher commission rate than if they are the sole agent responsible for finding a buyer.
The reason for this is that the estate agent will spend their time and energy on finding a buyer, potentially for nothing if a different agent makes the sale. There are also the costs of marketing and showing the property to potential buyers to consider too. However, if you are the sole agent, then the commission is guaranteed when you make the sale, so the commission rate will likely be somewhere around 1% or 2%.
There are also additional fees involved in a property sale that might require a separate estate agent payment solution as they are not included in the property’s sale price. These include:
various administration charges
Estate agent services
There are various estate agents services which will likely charge differently to the commission-based estate agent payment. These include services offered by letting agents, which is often a part of an estate agent’s provisions.
The agent may find tenants for a landlord, and may also handle rent payments and the deposits. Many agents also offer maintenance services to take care of the properties on behalf of the landlord, all for various fees of course.
There are three estate agent payment options for these services in the form of fixed-fee payments, hourly rate payments, and retainer payments. All three can be paid by accepting credit card payments online with or without a merchant account.
Charging a fixed price for a specific task can help an estate agency forecast their finances as the payment model is simple and transparent. However, there is the potential for some jobs to take longer or cost more than the fixed fee should any issues arise.
The potential problem with fixed-fee payments is instantly solved by charging by the hour. This estate agent payment solution ensures you get paid for everything you do. The only real issue is that it takes away the incentive to complete a task early.
Many estate agents are paid via retainer for regular letting agent services. Retainer payments work similarly to a subscription and can be the ideal estate payment solution for ongoing services.
We can help
GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.