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  1. Guides
  2. Estate agent contracts - what to expect
Estate Agents
Estate Agents
Last Updated 01 November 2021

Estate agent contracts - what to expect

Rosie Hamilton
Head of Communications
  1. 1
    Estate agent contracts - what to expect
  2. 2
    What do estate agents do?
  3. 3
  4. 4
  5. 5
  6. 6
  7. 7
Table of contents
  1. 1. Types of estate agent contract
  2. 2. What to look for in an estate agent contract
  3. 3. Estate agent tie in periods
  4. 4. How binding is an estate agent contract?
  5. 5. Can you get out of an estate agent contract?
  6. 6. In summary
  7. 7. FAQs

Estate agent contracts are legally binding documents. Both parties — you and your estate agent — commit to a specific set of terms as soon as you sign on the dotted line. As a result, it’s important to make sure you’re happy with the conditions before you agree to work with an agency.

In this guide, we’ll provide an overview of the most common estate agent contracts, a list of what to look for in an agreement. After that, we’ll talk about contractual tie-in periods, statutory cooling-off periods, and what to do if you decide not to sell your house after all. We’ll end with a handy FAQ section.

Types of estate agent contract

Every estate agent works slightly differently, but it’s likely you’ll notice a lot of overlap in their contracts. There are three main types of estate agent contract:

  • Sole Seller Agreement: This type of contract reserves the exclusive right to sell your home to the agent during the term of the contract. They are entitled to payment even if you find a buyer yourself.
  • Sole Agency Agreement: This is the most common type of contract. Like a sole seller agreement, a sole agency contract reserves the right to sell your home to a single agent. If you find a buyer yourself, however, you don’t have to pay the estate agent any commission.
  • Multi Agency Agreement: This type of contract allows you to hire as many agents as you like to sell your home. Generally, this type of agreement comes with a higher commission rate because the winning agent shares the fee with the other agents. Multi agency agreements can work well for hard-to-sell properties. You have access to multiple agents’ contact lists — and a potentially larger pool of prospective buyers.

Estate agent contracts have to abide by rules set in the Consumer Protection from Unfair Trading Regulations 2008, also known as the CPRs. In short, the CPRs protect consumers against unfair trading practices, including unethical contracts.

What to look for in an estate agent contract

It’s important to read through your estate agent contract to make sure you’re comfortable with all of the clauses it contains before you sign it. If there’s anything you’re unsure about, ask your potential estate agent for clarification. Keep an eye out for the following common terms as you go along:

  • ‘Ready, willing and able purchaser’: This means that as long as the agency can find a buyer you’ll have to pay their fee, even if you decide not to sell to them. Avoid this clause!
  • VAT: Agents will sometimes quote their fee without including VAT. This means you will need to add 20% onto their commission fee. For example, a quote of 1.2% + VAT translates into a total fee of 1.44%. Make sure you double check this, so that you know how much you’ll be expected to pay.
  • Tie-in Period: It’s standard practice for estate agents to include a tie-in period in their contracts. Typically this will be about 6 weeks, with a notice period of between 1 and 4 weeks. However, make sure you review this detail carefully. Some agents’ contracts can keep you tied to them for as long as 6 months.
  • Cancellation Fee: Check whether there’s a fee if you choose to switch to another agent or withdraw your property from the market.
  • Marketing Fees & Extras: Some agents will try and win business by charging low fees, but then they sneak extra costs into your contract. We've covered estate agent fees here. Look out for things like marketing fees or charges for EPCs (Energy Performance Certificates), which should be included as standard.

Estate agent tie in periods

Tie-in periods refer to the amount of time you’re bound by an estate agency contract. During this time, you may not be able to avoid paying commission to the estate agency — even if you find a private buyer.

How long is an estate agent contract?

Many tie-in periods last between 4 and 8 weeks, but some are much longer. Some tie-in periods also include several-week notice periods. You’ll see the length of your tie-in period in your estate agency contract.

Estate agent contracts cooling off period

Under UK law, consumers are entitled to a 14-day cooling off period after they buy non-perishable goods or services online, or when they enter into a contract online, by phone, by mail or at a location away from the seller’s business premises. They have the right to cancel the contract or return the products during this period.

If you sign your estate agent contract in your own home, you can pull out if you change your mind about the agency later on, providing you do so within 14 days.

Sole agency agreement time limit

Sole agency agreements are very common. If you sign a sole agency agreement, you’re tied into one specific agency for a certain amount of time — usually between 4 and 12 weeks. When they’re signed away from the agency’s home turf (in sellers’ homes, for instance), sole agency agreements are subject to the same 14-day cooling off periods as other estate agent contracts.

How binding is an estate agent contract?

Like other contracts, estate agent agreements are legally binding — if they’re legally written. Providing the clauses contained in the estate agent contract are legal, you must abide by them or you risk being fined, or being sued for breach of contract.

Can you get out of an estate agent contract?

In short, yes, you can get out of an estate agent contract — but only under certain circumstances. If you’re approaching the end of your tie-in period and you’ve given the agency the right amount of notice, you can terminate your agreement pretty easily. If your agreement with the estate agency doesn’t include a tie-in period, you may be able to give notice and switch agencies at any time.

Finally, when estate agents breach their own contracts, you can sometimes terminate agreements immediately. To find out more, check out our comprehensive guide to changing estate agents.

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Estate agent breach of contract

If your estate agency breaches its own contract, you may be able to get out of the agreement prematurely. Contractual breaches might include:

  • Not advertising your home on RightMove or Zoopla as promised
  • Not passing on genuine offers to you
  • Including unfair terms in your contract, as outlined in the Consumer Rights Act 2015

If you believe that your estate agent has breached the terms of its contract with you, we recommend that you seek advice from a qualified property law solicitor.

Can I pull out of selling my house?

You can pull out of selling your home at any time before you exchange contracts. In real terms, this means you can change your mind about selling your home on the eve of closing and cancel the entire transaction. Unless you’ve paid an online estate agent in advance, you probably won’t need to pay commission if you pull out before exchanging contracts.

If you’ve exchanged contracts and the buyer has paid a deposit, pulling out is much more complex and difficult — and potentially very expensive. To learn more, read our handy guide to pulling out of a house sale.

What happens if I back out of selling my house?

If you pull out of selling your home before exchanging contracts, you most likely won’t have to pay commission to your estate agent. You may, however, decide to pay back some of the former buyer’s legal expenses as a courtesy. If you decide to back out after you exchange contracts, the consequences can be dire. You could be sued, for instance — at which point you might be liable for legal fees.

In summary

Estate agent contracts can be complicated and confusing. Look out for the common terms at the beginning of this guide as you read through your agreement, and don’t sign on the dotted line until you’re completely comfortable with all the conditions included in the document. Last, but certainly not least, try to avoid contracts containing a ‘ready, willing and able purchaser’ clause, because they could cost you more in the long run.

If you’re ready to find a great estate agent, why not try GetAgent’s handy estate agent comparison tool? Simply enter your postcode below to view a list of local estate agents today.

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FAQs

Can an estate agent charge a withdrawal fee?

An estate agent can charge a withdrawal fee if it’s stated within the contract. Some estate agents do charge withdrawal fees if clients decide to pull their houses off the market within particular timeframes. When contracts include ‘ready, willing and able’ clauses, estate agencies can also charge commission fees if they present clients with willing buyers and those clients decide not to sell their homes to those buyers.

Can I complain about my estate agent?

Yes, you can complain about your estate agent — both to the agency itself, and in more extreme cases, to The Property Ombudsman (TPO). To find out more, read our blog post about the estate agent complaints process.

What do estate agents have to disclose?

The Consumer Protection from Unfair Trading Regulations 2008 (CPRs) stipulate that estate agencies have to disclose ‘fair’ information to buyers and sellers. For example, estate agents are not allowed to use ambiguous language to mislead clients. Estate agents also have to share information with clients in a timely manner.

Estate agents represent sellers. With that said, they’re not allowed to mislead buyers by failing to disclose material details about properties. They also have to be honest about their credentials — they can’t, for example, claim to be part of a professional organisation when they’re not.

Do you have to pay estate agents if you don’t sell?

In a nutshell, you do sometimes have to pay estate agents that don’t ultimately sell your home. Some online estate agents charge an upfront fee for services, for example. Estate agents that include the dreaded ‘ready, willing and able’ clause in their contracts may charge you commission if you decide not to sell your home to the interested buyer they find.

You may also have to pay commission to an estate agent if you’re bound by a tie-in agreement but find a private buyer on your own. Before agreeing to work with any agency, ask the following questions:

  1. Do I still have to pay you commission if I sell my house privately?
  2. Do I still have to pay you commission if I decide to take my house off the market?

How do I give notice to an estate agent

To make sure its legally binding, you should give notice to your estate agent by:

  1. Checking your contract for the agreed notice period
  2. Giving notice stating this time
  3. Giving the estate agent your notice in writing (email/recorded delivery letter).
  4. If sending a letter by post make sure to state the date the letter was sent and the expected end date.
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