Warning estate agent contracts!

Estate agents contracts by law need to be put in simple terms without any jargon. Despite this many home owners are very wary of an estate agent contract and simply do not understand some of the meanings. Many contracts contain dangerous elements that tie a seller to an agent or even make sellers pay the agent if they find a buyer themselves! Conducting a private house sale and using an agent is possible depending

on the type of contract you sign when employing an estate agent. Sellers should remember that they are the client and insist that the contract confirms that if a buyer finds a buyer themselves the full commission should not be due.

Estate agent contracts in the UK

Sole selling

NPHSA recommend that sellers never sign a sole selling agency agreement .This means that the estate agent is the only agent with the right to sell your home during the term of the contract. The estate agent is entitled to payment, even if you find a buyer yourself!

Sole agency

Sole agency is the most common estate agent contract. This is the same as sole selling with the exception that, if you find a buyer yourself, you don’t have to pay the estate agent fees.

However, if sole agency contracts are open-ended, an agent can still claim commission if it introduced a buyer – even if the offer is made months (or potentially years) after the estate agent stopped marketing your property.

Multi agency

Estate agents will often try to put you off using multi agency contracts as they receive a reduced commission. This means that several estate agents act for you, but only the agent that sells your property is entitled to receive a commission. The commission rate is usually higher for a multi-agency contract.

Ready, willing and able purchaser

If this clause is in your contract, don’t sign it. It means you’ll still have to pay the agent for finding a buyer even if your situation changes and you have to withdraw from the sale.

Agent that insist on a tie-in period

Avoid anything over eight weeks, and remember to factor in the notice period (often around two weeks). This ensures the agent is keeps a keen interest in helping you sell the property.

 

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