Estate Agents

Estate agents are usually an integral part of the selling process. There are two areas you should clarify prior to instructing an agent: the size of commission, and when that commission is to be paid.

The standard practice is 'sole agency', which means one agent will market your property. In return, s/he will take a commission based on the final selling price. Commission is normally paid after completion of sale.

Buyers and sellers are also entitled to withdraw from a sale before contracts are exchanged - about one sale in three fails in England and Wales. A common cause of delay is the time taken to obtain replies to enquiries made to a Local Authority. The buyer will want, for example, to learn whether any planning applications might affect your dwelling.

If time is critical, you can carry out these searches yourself. For example, the planning register is a public document. It will list all planning applications and permissions in your local area.

When you use an estate agent to help you sell your property, you will have to sign a legally binding contract. Before you sign, read the contract carefully and make sure you understand and agree with it. Find out whether you have the right to cancel the contract. Check how long it will run. It should allow a reasonable length of time to market your property and find potential buyers. Beware of contracts that tie you to an estate agent for a very long time. If you are unsure, get advice from a solicitor.

You may come across some unfamiliar terms in a contract. Make sure you understand what you are agreeing to. The terms 'sole agency', 'sole selling rights' and 'ready, willing and able purchaser' must be explained in writing if they are used in a contract.

Terminology

Sole agency - The estate agent is the only agent with the right to sell your property. If you find a buyer yourself, you don't have to pay the estate agent's commission although you may still have to pay for advertising or a 'For Sale' board. If you change from one agent to another, there may be a period when both agents' commissions are due if your property is sold.

Sole selling rights - The estate agent is the only person with the right to sell your property. It is different from sole agency: if you find a buyer yourself, you still have to pay the estate agent.

Ready, willing and able purchaser - You have to pay if the estate agent finds a buyer who is prepared and able to buy your property and exchange unconditional contracts. You still have to pay even if you withdraw from the sale and unconditional contracts are not exchanged.

Multiple agency - You can ask several estate agents to act for you on a multiple-agency basis. Only the estate agent who sells the property will be entitled to a commission. The rate of commission is likely to be higher than for a sole agency or sole selling rights.

Contract

A few estate agents offer a 'joint sole agency' contract where two agents agree to share one commission, although the total fee may be higher. If you appoint more than one estate agent to sell your property under a sole agency or a sole selling rights contract, each agent has the right to claim their fee when the property is sold.

Charges

Before you sign a contract, the estate agent must give you written details of how much you will be charged and when payments will be due.

The agent must state the exact amount you will be charged or, if this is not possible, the way the cost will be worked out and an estimate of the final amount.

You pay a percentage of the selling price of your property as a commission.

Some estate agents charge a low percentage plus an additional charge for advertising and 'For Sale' boards. In that case, the estate agent should tell you exactly how much the additional charge will be. If this isn't possible, you should be given an estimate of the charge and a breakdown of how it will be worked out.

Other agents charge a higher percentage of the selling price but this includes all costs.

Occasionally, an estate agent may charge a fixed fee rather than a percentage.

It should be clear from the estate agent's terms and conditions when you will have to pay. Fees are usually due when contracts are exchanged, but you don't pay until the sale is completed.

Under a ready, willing and able purchaser contract, you have to pay as soon as a buyer whis prepared and able to exchange unconditional contracts is found. This applies even if you withdraw your property before the sale is completed. The estate agent may also charge you for 'For Sale' boards and advertising.

Property particulars

The estate agent (or agents) you have chosen will visit your home to take details such as the number and size of rooms. This helps the agent prepare a description of the property (known as property particulars) before advertising it.
There are strict rules covering the way property can be described. It is against the law for an estate agent to make false or misleading statements in the property particulars.

Other services

Estate agents also provide services to buyers. They may organise surveys and valuations or arrange mortgages or life insurance. This is common when an estate agency is part of, or linked to, a financial institution such as a bank or a building society.

If an estate agent intends to offer services to the buyer and will receive a commission or an introduction fee, the agent must give you written details. If the buyer decides to take up the offer, you must also be told in writing. This applies even if the agent offers services through someone else.

Receiving offers

Potential buyers come and look at your property. If they want to buy it, they make an offer through the estate agent.

Estate agents must tell you promptly and in writing about all offers they receive. If there are some you do not want to be told about, such as those below a certain amount, you must tell the estate agent in writing.

You don't have to accept the highest or the first offer. Unless you say otherwise, the agent should keep you informed of new offers as they come in even if you are considering selling to a particular buyer or have already accepted an offer.

If you have a ready, willing and able purchaser contract and an offer for the full asking price has been received from someone who is prepared and able to buy your property, the estate agent can claim commission from you even if you don't accept that offer.

Even after you accept an offer, both you and the buyer can renegotiate the price and/or conditions of sale, or pull out without penalty, up until contracts are exchanged or accepted.

However, if you have a ready, willing and able purchaser contract you may have to pay the agent if you withdraw before contracts are exchanged. It depends on what happens during negotiations.