Estate agent agreements and contracts explained

We understand the property market can seem a little daunting even to the most experienced person, which is why our friendly team of experts are on hand to help guide you through the whole process from start to finish. We will lead you through the viewing process, help you understand the legal fees and fully explain the various types of estate agency agreements so you are in control and can make an informed decision as to what the best option is for you.

To get you started we’ve looked at the pros and cons of the 3 types of estate agency agreements available in the UK:

Sole agency
This type of agreement means that the estate agent named in the contract is the only one allowed to sell your home and they will receive all the commission once the property is sold. Under a sole agency agreement, if you find your own buyer, you do not have to pay anything to the estate agent. In today’s market, many estate agents are now opting for sole selling rights contracts due to the increased marketing of properties via social media channels.

Benefits of a sole agent

  • Having a sole agent will save you money as you will only have to pay one fee and one set of commission.
  • You will have one point of contact and will be able to build up a relationship with your estate agent.

Cons of a sole agent

  • If you agree to sell your property through one agent you cannot market it with any other agent during the term of that agreement, which could be annoying if your property is not selling.

 

Joint sole agency
A joint sole agent is when two agents agree to market your property together and split the commission. This agreement is often the best option, if for example, you want a national agent who focuses on expensive, luxury properties and a local agent with knowledge of the market in your local area. Generally, it isn’t advised to enter a joint sole agreement with two local agents, as they will cover the same market and target audience.

Benefits of joint sole agreements

  • With two specialist agents, you will cover a larger market area which will attract more potential buyers.
  • You will have 2 agencies working on your behalf, which may mean different marketing channels used to promote your property to a wider audience.

Cons of joint sole agreements

  • Joint sole agreements usually involve higher fees.
  • If you sell the house through a third agent, you are then in breach of the contract and will still have to pay the joint sole agency fees.
  • You will have to deal with more than one company at a time, which could potentially mean more stress for you.

 

Multi-agency
A multi-agency means that you can use as many agents as you like, only paying commission to the specific estate agent who sells your property. It is widely believed that using multiple agents is the quick-sell option. Going with a multi-agency agreement can also look quite desperate to the outside world as the property will be listed multiple times by each of the different agencies on websites such as Rightmove.

Benefits of a multi-agency agreement

  • The more agents you have working for you, the more potential buyers it will reach but this also has its downfalls

Cons of a multi-agency agreement

  • Only the agency who makes the sale gets the commission, so they are competing against one another which can make the sales process quite frantic.
  • With several pushy, rival agents, the viewing process can be more intrusive.
  • With this type of agreement, fees will often be higher.

Overall, the type of estate agent agreement you choose is down to you, your property and the state of the market. It’s a big decision to make, so we always recommend you take your time, do your research and seek advice so you can make an informed decision.

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If you would like to speak to one of our property sales experts about the best possible option for you, please get in touch today. Visit or call your local Michael Jones office for helpful advice or contact us here.

 


Content accurate at time of publishing.

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