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Estate Agents

What Should I Expect from an Estate Agent Contract?


Every estate agent works slightly differently, but it’s likely you’ll notice a lot overlap in their contracts. These are legally binding documents, so it’s important to make sure you’re happy before you sign.

There are three main types of agency agreements:

  • 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: The most common type of contract. Like the sole seller agreement, a sole agency contract reserves the right to sell your home to a single agent. But, if you find a buyer yourself, 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, as the winning agent shares the fee with the other agents. However, this can be a good option for a hard-to-sell property. You have access to multiple agents’ contact lists, and therefore, a potentially larger pool of prospective buyers.

Things to look out for

Read through your estate agent contract carefully and make sure you’re comfortable before you sign. If there is anything you’re unsure about, ask your estate agent for clarification. Pay particular attention to the following common terms before committing to an agency

  • ‘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 contract. 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 sneak extra costs into your contract. Look out for things like marketing fees or charges for EPCs, which should be included as standard.

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