Using an estate agent - selling a property
Source: The Office of Fair Trading.
Most of us who buy or sell a house will use an estate agent. Estate
agents arrange the sale of property. They advise on price, negotiate between
sellers and buyers and handle advertising.
Many offer additional services such as arranging mortgages, surveys
and conveyancing. Remember, you don't have to use any of these services.
Usually, estate agents work for sellers. Sellers are the clients. They
pay the fees and the agent puts their interests first. But agents must
treat buyers fairly. If a buyer pays an estate agent to find a house, the
buyer is the client.
Using an estate agent can be a complicated business, so it makes sense
to know your rights, the pitfalls and how to get problems sorted out.
Here you can find out about using an estate agent when you are selling
a property and when you are buying a property, and there's advice on what
to do if things go wrong.
There's also a separate section that deals with using an estate agent
in Scotland where the rules are different.
On this page we look at:
Choosing an estate agent
You can sell property yourself, but most people use an estate agent.
You should shop around for an agent. Ask for recommendations from friends
and relatives who have recently bought or sold property. Choose an agent
who sells your type of property and offers a contract that suits you.
You could use an estate agent who is a member of the Ombudsman for Estate
Agents (OEA) Scheme. You can usually find a least one OEA member in the
high street. Scheme members follow a code of practice which means that,
if things go wrong, the OEA will help sort out the problem.
Personal interest
Remember that estate agents may be in a position to benefit personally
from the sale of a property. You must be told promptly, and in writing,
if your estate agent, or a relative or business partner of the estate agent,
wants to buy your property.
The contract
When you use an estate agent to help you sell a property, you have to sign
a legally binding contract.
Before signing, read the contract carefully and make sure you understand
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 or your local Citizens
Advice Bureau.
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.
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 who is 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.
Other pages in this section
Source: The Office of Fair Trading, 2003
Click Here to go back to
UK Loans Home Page
Click
here to Go back and Read More Articles on Finance
Click
Here to Go back to our Information Page
|