Agencies have been cutting their fees to vendors in a bid to hold onto market share in the increasingly competitive Dublin market.

While most estate agents say they charge between 1-1.5 per cent on the sale of property, anecdotal evidence suggests that some are pitching as low as 0.5 per cent to secure a sale.

Auctioneers fees have dropped in tandem with rising house prices over the past decade and the Irish Auctioneers & Valuers Institute (IAVI) claims that Irish fees are the lowest in Europe.

"Fees are anywhere between 0.5 and 2 per cent, says IAVI chief executive Alan Cooke. You don't go to the cheapest doctor or dentist but the most competent, so why go to the cheapest agent, he adds.

"I'd rather get a good price for my house at a 2 per cent fee than pay a low fee for a bad price," says Cooke.

Property is a seasonal business, with fee discounts early in the year when every estate agent is scratching around for properties to sell. Competition is keen.

Most people consult at least three agencies before deciding on who will sell their biggest asset.

Companies anxious to get their board up on certain roads might be prepared to settle for an uneconomic fee, although they won't stay afloat for long on this basis, say some agents.

"True, it's getting more competitive. The value of houses has gone up significantly and fees have reduced, but I would question the calibre of service provided at 0.5 per cent," says Sherry FitzGerald director Simon Ensor.

"It's a slippery slope, smacks of desperation and makes no commercial sense whatsoever."

With big agencies undercutting each other, smaller companies are finding a niche by offering a one-on-one service and charging accordingly.

"My rule of thumb is 1.25 per cent up to €1 million and 1 per cent over this, but I sometimes cut a deal on fees," says Felicity Fox, who set up shop less than two years ago, specialising in city centre property.

Wade Wyse, managing director of HOK Residential says that the new buzz term is "performance-related".

"Everyone is doing this at the moment and vendors like it. The harder we work at getting the best price, the higher the percentage.

"For example, if a vendor is happy to get, say, €750,000 for their house at a 1 per cent fee, that's the base.

"It scales up according to price, with higher fee if the house makes €900,000."

This scale fee is also used by Gunne Residential if the customer wishes and fees of one to 1.5 per cent are about average, says divisional director Kate Sissons.

"Everything is so fee-focused and we're all fighting for business, but people are missing the final picture.

"Short cuts will be taken if fees fall and there is a risk of not doing the job properly."

"Why do some people go to Brown Thomas and others to Hector Grey?" asks Lisney's Denis Beare on the sensitive subject of fees.

"No question, you get the service you pay for. There is a level below which the big agencies won't go. We would argue that you simply won't get the service," adds Beare.

At the end of the day, there is only one pie, despite an increase in the number of agents setting up, says Keith Lowe of the Douglas Newman Good agency.

"There is pressure on fees, no doubt about that. People see what a firm like ours has to offer.

"We go in with our colour magazine and branches around the country, while the only answer for some agencies is to cut fees.

"It's unbelievable what's going on out there," adds Lowe.