I'm writing this blog as I was appalled to realise that there is an agent signing people to SOLE SELLING RIGHTS (vastly different to sole agency) without them really understanding the implications, I've come across this on numerous occasions with the same agency, hopefully this will give a better understanding......
An estate agent contract defines the terms between you as a vendor or landlord and the agent you are engaging to manage your sale or letting. But they can be complicated, especially if you’re new to selling or letting.
Signing contracts is not something you should rush into. You need to be confident about what you’re signing while not being afraid to challenge anything that doesn’t look right, or you don’t understand.
SOLE AGENCY
Sole agency is the most common type of contract and means the estate agent has exclusive rights to market your property during the term.
Most contracts state that you don’t need to pay any commission if you find a buyer yourself. Although the agent may be able to claim commission for work already performed.
If the agent hasn’t sold or let your property within an agreed period, you’re usually free to list with another agent.
JOINT SOLE AGENCY
With a joint sole agency agreement, you instruct two agents that agree in advance on who gets the commission. This type of contract is rare but may come into force if you want to appoint a specialist agent that operates nationally alongside a locally based agent.
MULTI-AGENCY
You can use as many estate agents as you like with a multi-agency agreement and only pay a commission to the one that sells or lets your home. With multi-agency arrangements, commission fees tend to be higher than sole agreements.
SOLE SELLING RIGHTS
Beware of sole selling rights, as they often stipulate that an agent has complete exclusivity over selling your home during the period specified. You’ll even need to pay the agent if you find your own buyer or tenant or decide to remove the property from the market.
ASK ABOUT TERM AND TERMINATION CLAUSE
What do the specifics of the contract look like? With most sole agency contracts, agents give you a set time to sell or let the property before you can list with other agents. Ask the agent for the length of this period and what happens if you decide to list with someone else before it expires.
It’s also good to inquire about termination clauses. Most estate agent contracts specify a tie-in period, but what happens if you’re unhappy with the service? You’ll want to terminate the contract within a reasonable timeframe therefore, any contract you sign should offer the flexibility to terminate without incurring a penalty or withdrawal fee.
WHAT ARE THE SERVICE LEVELS AND EXPECTATIONS?
When deciding to instruct an estate agent, ask them about the level of service they provide. What does selling or letting your home entail? Most agents offer to market the property, meaning they arrange the pictures and floor plan, list the property on property portals and advertise to their database of buyers and renters.
However, you need to ask the agent exactly what type of service they’ll provide, for example, what else do they do to market your property? Do they tap into social media, create canvassing? By defining the expectations from the get-go, you’re more likely to be satisfied with the service offered.
IS THERE AN ESTATE AGENT COOLING OFF PERIOD?
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations state that sellers have a 14-day cooling-off period for contracts signed at a location away from the agent’s business premises (usually the seller’s home). That means agents need to give you 14 days to change your mind without incurring a penalty.
If you wish to terminate the contract during the cooling-off period, you need to give clear notice in writing stating your right to cancel. You can still cancel during the cooling-off period even if the agent has begun marketing the property.
BE CLEAR ON FEES
Agent fees can be one of the biggest issues catching sellers off guard. Before signing a contract, ensure the agent is clear about estate agent fees for selling, and they’re outlined in the contract. Fees should include VAT and a breakdown of how they’re calculated.
Most estate agents operate on a ‘no sale, no fee’ basis, meaning you won’t pay the agent if they don’t sell your home. Fees are typically based on a percentage of the sale price, although some agents may prefer a fixed-fee method.
Again, it’s vital that you know all this information beforehand.
It’s also worth checking for hidden fees, such as additional marketing costs or penalties for ending the contract early. If you see these fees, ask for them to be removed if you don’t agree with them. Additional charges need to be agreed with you in writing before you’re charged.
THE CONTRACT TO SELL OR LET YOUR HOME
Instructing the right estate agent is one of the first important steps in selling or letting your property. Before signing on the dotted line, you should be confident about the service you’ll receive and be clear about everything it entails. From the contract type to the fees, when they are due and any other requirements.
When you’re sure you have the right agent on the best terms, you can look forward to the next step.
If you would like to know more please contact Jason on
01209 711118 / 07968 641892 or email jason@homesofcornwall.com