Agency Terms: What do they mean and what should you look out for?17th February 2017
Essentially there are two types of agency instruction, Sole or Multiple. As the names suggest, sole agency means that only one agent is instructed and multiple implies there are two or more agents.
However, there are variations on these themes and this is where you need to be aware and not fall into the trap. Many unwitting sellers believe that they are entering into a traditional sole agency contract, but only later to discover they have signed up to a sole selling right. The latter being far more restrictive and can leave you having to pay the agent even if they do not introduce the buyer or you decide not to move.
This is the most effective method as your estate agent will be motivated to sell your home for the best possible price as they are have an exclusivity period to thoroughly test the market. A fee is only paid if the agent introduces a purchaser during their contractual period that subsequently completes upon the purchase. The contract is for a specified period, but be aware, despite a directive from Surrey Trading Standards, some agents’ sneak in a further notice period, sometimes up to 4 weeks, to terminate the contract. So read the small print and if it includes a notice period, either get this deleted from the contract or remember to give the specified notice in time. Should you find a purchaser privately, not through another estate agent/online agency, then there is no fee payable.
However, if another estate agent/online agent introduces a purchaser during the sole agency period, then this is a breach of contract and you will be liable to pay both agents. If a purchaser introduced during the agency period agrees to purchase your home within 6 months of the termination of the contract, even if they are re-introduced by a subsequent agent, then you will need to pay the first agent. Therefore, should you decide to change agent, it is important that you supply the new agent/s with a list of buyers that have already been introduced by either yourself or the previous agent/s.
Sole Selling Right
This fundamentally works in a similar way to a sole agency with a few significant restrictions and potential costly differences. Should you agree to sell your home privately, even if that is to a member of the family or to a purchaser introduced at any time in the past by a previous agent, then you will be liable to pay the sole selling right agent and potentially the previous agent in full. Many sole selling right contracts include clauses that any purchaser introduced by that agent who subsequently goes onto buy the house at ANY time, will render you liable to pay a full fee. Also, some refer to a fee being payable for the introduction of a Ready, Willing & Able buyer, even if you are unable or decided not to proceed with the sale.
Joint Sole Agents
This is sometimes confused with a multiple agency contract, should the client instruct only two agents, but there are differences. A joint sole agency is normally used where specialist skills are required, an example being for an equestrian property or new development.
Again this is for a specified time period, but this time the two agents work in conjunction with each other, co-ordinating the marketing and when the property is sold, the fee is split.
This is where two or more agents are instructed to work in competition with each other, with the agent that introduces the buyer getting the full fee. There is no time period and the fee is set at a higher rate than a sole agency.
This is usually the least recommended option as it can frustrate a sale, with many buyers believing that if a property is listed with a number of agents that it is overpriced or difficult to sell and are therefore reluctant to get involved in a purchase, where a second buyer may be introduced.
Curchods primarily operate on a sole agency basis and never on a sole selling right, as we believe the latter is an unfair and restrictive practice, not giving you, the consumer, the flexibility required.
If you would like to discuss any of the above options, myself and my friendly, experienced team would be delighted to offer you professional advice on all property matters.
Please call 01932 230033 or email email@example.com