The pitfalls of Sole Agency contracts and how to avoid them.
I've been discussing the minutiae of complicated sole agency contracts.
All too often, people who have been trying to sell with another agent, call us, wanting us to sell their property when they are not getting anywhere. Angry and frustrated they then find that, when they look closely at the contract they have signed with that agent, they are stuck and cannot change agents.
Typically, when people launch their property onto the market with all the fanfare and razzamatazz, the contract is signed without being given much if any attention.
It is clear to me that sellers assume a Sole Agency contract is a simple, generic document, standard across the estate agency industry. That is strictly not the case. There are as many variations as there are colours of the rainbow and a few more. Some things to look out for:
1. Length of Sole Agency. Some agents will try to sign you up for as much as 6 months (26 weeks). Don’t sign for more than 12 weeks.
2. Termination Notice period. Again, agents may ask for 4 weeks. This should not be more than 2 weeks so can be given at 10 weeks should you wish.
3. Sole Agency inclusion period. If a sale is agreed during your sole agency period, the period of the sale should still be a part of the sole agency period. Some agents will say the sole agency period is put on hold if a sale is agreed; this is incorrect.
4. Sole Selling Rights. Do not sign this as, if you have a genuine private sale, the agent can still claim a fee if this clause is in the contract.
5. Commission fee and what it includes. You should not have extras at the end. Some agents will try to charge you extra fees outside the commission % if they achieve over the stated asking price, e.g. a 10% fee of the amount above asking price.
6. For sale boards. It’s up to you. No doubt they do attract potential buyers but as the board is going outside your property, it’s your choice. Certain areas of Brighton and Hove do not allow boards, mainly the Conservation areas.
7. Any extra fees. To be honest, there should be no extras except perhaps for floor plans, EPCs and professional photographs. As the agent’s fees are paid at the en of the transaction, it is unfair for the agent to have to absorb them at the beginning when they have no income from the seller. Typically the total for these is c. £100
8. Associated Services. It can be helpful to use a solicitor known to the agent. Some tents receive a small fee from the solicitors for the referral but the good thing is they will tent to be efficient which is why agents recommend them. You don’t need insurance, broadband, utilities, etc,. These spin-offs can distract many agents from doing the job you have employ them to do; sell your property.
Finally, this resume on the Property Ombudsman’s website should help you decide what is fair and what should be avoided: The Property Ombudsman
Paul Bonett F.N.A.E.A. M.A.R.L.A.