Estate Agent Contracts Explained
When it time comes for you to sell your property we are more than likely to start researching which are the better estate agents who will not only achieve us a sale, but also the best possible price. Today we have many options from the national brands to the local family run concepts, hybrid / online or we can even give it a go ourselves – Depending on the property we are selling, there may be specialist agencies we should look to go to in the first instance such as those dealing with higher valued homes or those with focus on rural property / farms etc. For those of us in a rush to sell, once again we have many options with concepts guaranteeing to purchase your home, though of course you will have to surrender on the sale price somewhat.
So, for this example we have decided to visit the high street estate agencies and have called upon a handful to come over and give us a free valuation. In today’s property climate in England you will not be short of attention if you have a property to sale, you now will have been given promptly a valuation and several follow up calls. Everything is in your hands and you can now decide who you choose to sell your property and under what conditions. Here I would like to say that although estate agents may not have the best reputation (usually down to the gutter press only picking on random and few horror stories), they do work incredibly hard in the background with high costs in order to both acquire your valuation and sell it from the rental costs of their premises to the extortionate costs to list property on Rightmove etc.
You now will be presented with different contracts to sign via your estate agent(s) and the terms you will hear are likely to be:
Sole Agency Agreement: A very common term and frequently adopted by vendors. This agreement / contract will tie you in to the services of one sole estate agency (or group of estate agencies) and will last usually between 8 weeks to 16 weeks. Here, as the vendor, you are advised to agree on the lesser period as possible. You will be only allowed to sell your property via the estate agency(ies) in the agreement unless you sell the property directly yourself (though check the terms and conditions*). You can look to get out of the contract should you be dissatisfied with the service you have received.
Importantly is your commission / fees which with sole agency is likely to be the cheapest option – ie 1 – 1.5%.
Sole Selling Rights: A lesser known option and likely to be seen as the lesser advised option – Here we are very similar to what we explained above with the sole agency agreement, *but now you will have to pay off the estate agency their fees if you sell the property yourself such as a friend / family member buying from you.
Multiple Agency Agreement: Now we are free to chose one or more estate agents to sell our property and this means you being marketed by several at the same time (sometimes including muliple listings on property portals such as Rightmove / Zoopla / OnTheMarket). Which ever estate agent sells your property is the one you pay.
Commissions / fees will be higher as there is more risk for the multiple estate agents as only one will achieve the sale thus claiming the commission fee.
Can I barter with my estate agency over their fees? An interesting question and one which takes many different answers for different reasons. If the market is in your favour, ie valuations are rare and demand is high then you might hold some authority with certain estate agencies, though do not be taken back when some will refuse your negotiations and stick to their price – This shows confidence in their service and should be something you consider when choosing which estate agent you choose to sell your home.
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