The EHL Guide to Estate Agent Contracts

January 24, 2020

Estate Agents have sadly been the butt of many cruel jokes over the years. In our experience they have an important role to play and the animosity is most often a result of the perception that their services seem to come at a high cost.

Our tips to a positive experience

The key to having a positive experience is, in our opinion, about acceptance, knowledge and confidence. Having accepted that you will need the services of an Estate Agent to successfully sell your property, you can then make sure that you are armed with the knowledge you need to understand contract options, terminology and how their services are costed. Finally, in order to proceed with your sale with minimal stress, you need to be confident that you know what the final bill will be and that you got the best possible deal.

Choice 1 – type of agent

There is more choice than ever when it comes to the type of agent you use; traditional, online, hybrid – you can now decide what involvement you want to have in your own sale. The choice is a personal one, but we urge caution in simply taking the cheapest option. The sale of your home is important and in a difficult market the support and skill of an experienced agent can make a huge difference to timescale and price.

Choice 2 – type of contract

There are 3 main types of contract offered by agents: -

• Sole Seller – giving the agent sole selling rights for a specified period when they will be entitled to commission even if you find your own buyer

• Sole Agent – perhaps the most common type, the agent will have sole selling rights but can’t claim commission if you find your own buyer

• Dual/ Multi-agent – instructing a number of agents (benefitting from their combined buyer mailing list) but, with agents competing for the sale, commission is generally higher

You should therefore consider where your buyer is likely to come from and whether you value speed of sale over fee size.

Choice 3 – payment arrangements

When presented with a fixed commission fee or a percentage of the final sale, your final decision may simply come down to the maths. Consider however that an agent working for a fixed fee has no incentive to sell your property for a higher price and may be tempted to accept a lower price for a quick sale. A few extra thousand pounds on your sales price may help you more by reducing the total mortgage you need – could this be more valuable than a few hundred pounds saved on commission?

Finally, we recommend that you take the time to understand the final fee you will be presented with. Was the % you were quoted inclusive of VAT for example? The addition of VAT to a 1.2% fee means you are actually paying over 1.4% - a huge difference when we are dealing in hundreds of thousands of pounds. Don’t be shy about negotiating either as there is generally strong competition between agents and they value your business – put this to the test!

For more great tips on conveyancing visit our website at https://www.ehlconveyancing.co.uk/ and use our handy online conveyancing tool to get a quote in under 60 seconds.

The information provided in all of our blogs reflects only a narrative of some elements to consider on the topic. The blogs do not contain considered legal advice and should not be relied upon as advice. Please see our website terms and conditions for full details of our disclaimer. If you are interested in obtaining advice, please contact one of our lawyers who will be happy and able to advise you on your own particular circumstances.