When it comes to estate agent contracts its important to know the difference between the most common types. Ask about them at the first opportunity and check all the terms and conditions before you sign. Not all estate agent contracts are the same!
- Sole selling rights – If your contract gives the agent “sole selling rights” the estate agent in the contract is the only one allowed to sell your home during the period stipulated. You will have to pay that estate agent, even if you find your own buyer.
- Ready, willing and able purchaser – This means you have to pay the agent for finding a buyer, even if you decide not to sell.
- Sole agency– This is the same as sole selling rights but if you find your own buyer, you won’t have to pay anything to the estate agent. But if the contract is open-ended, the agent might be able to claim commission, even years after the contract is over, if the buyer was originally introduced by them (to be fair it’s rare that an agent would enforce this after a very long time but what if it was 3 weeks after you had decided to switch agents?).
- Multi agency agreement – You can use as many agents as you like and only pay commission to the one who sells your property. The more agents you get working for you, the more potential buyers you will reach, and potentially the higher the offers you will get – but you will pay higher fees. Using this approach depends on what type of property you have, and the state of the market.
- Don’t forget to add VAT (as some agents will often not include it up front)
- You can negotiate on the % fee. The agent wants your business so they may be flexible. A small lowering of the percentage might seem trivial but it can make a big difference and save you many hundreds of pounds. But remember, the agent is not a charity, they incur large overheads to ensure they sell your most valuable asset at the best price and they do work very hard!!
- You may want to consider adjusting the amount of commission you give your estate agents depending on how good a job they do.. You could agree 1% if they reach asking price, 1.25% if the final price is above asking price, etc. Additional fees are definitely an incentive to get the best price for your property!
Its normal for estate agent to have a tie in period to the contract. They are going to spend a lot of time preparing the brochures and other marketing material, getting the property online and phoning lots of potential buyers. Not to mention the accompanied viewings and call backs. It would be rather unfair to have them do all that then cancel the contract after 3 weeks because you have no offers! It’s a hard market out there but good agents know it best. Give them time to deliver!
- 8 to 12 weeks are the most common terms but depending on your property type or location longer periods of between 3 and 6 months can be appropriate, provided you are getting the service of course and both you and the agent are happy with this.
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