EA Contracts - multi agency etc - pls explain

Hopejack

I recall reading a great piece on here in the last few months explaining the differences with multi agency, dual agency and sole agency contracts but I can't find it despite searching!

Can anyone help please?

I'm planning on marketing my house end Jan and intend to get a few EAs to value, whom I pick will be based mainly on my confidence in them and the ability to negotiate their fee. I believe most want you to sign up to 3 months sole agency and then you can instruct another agent as well. This is what we would be looking to do if the case arises some months down the line so I don't want to get too locked in long term.

So, what's the best terms I'm looking for in a contract - I think I read some say that they will charge you a fee even if they don't sell the place but the other agent does etc. Obviously I don't want that to happen. I also believe some up their fee if you go multi agency - again would need to look out for that in the small print....

G_M

Sole agency agreement ties you to a single agent for a period of time. Cheaper as you pay them less.

Multi agency means more than one agent tries to sell your house at the same time. They will charge you more because they risk spending time/money marketing your house only for the other to sell it and get the commission.

If you opt for sole agency, and then let another agent sell the house while the sole agency agreement is still in force, the original sole agent can charge you as well as the other one who actually sold the property.

So when signing up to a sole agency agreement, make sure you understand how long you are tied to them and how you can end it (in writing? with a month's notice?).

Yes, you can negotiate sole agency agreements: both the commission rate (x%), and the period (x weeks/months). Try to get the period as short as possible so if the agent proves to be no good and you want to change you are not tied to them for months and months.

Hopejack

Thanks GM, very useful - I can't recall what else was said about the specific wording in a contract - it might have been Davesnave who wrote it so I'll PM him.

reheat

Strongly recommend you buy (and no, it's not an insult - we bought one) Buying and Selling a Home for Dummies, by Melanie Bien, ISBN 978-0-470-99448-1. Only ever bought a house once, a long time ago, and this will be our first time selling. We went through the book and scribbled notes in the margins.

I absolutely insisted we be allowed to bring the EA contract home to read before signing it. They don't like you doing it because they may have to answer some awkward questions!

One thing which must not be in your contract is "sole selling rights", apparently some dubious agents still put this in. It means that if you have signed up with them, and then by some lucky chance manage to find a buyer yourself ... you would still have to pay the EA their fee!

Another thing to be aware of in a contract is "ready, willing, and able purchaser" ... which allows them under some circumstances to still demand their fee even if the sale falls through.

Do not confuse the 12 week tie in period with it being a sole agency contract. The tie-in means simply that - your minimum sole agency contract period is 12 weeks, or whatever you may negotiate. After that 12 weeks unless you terminate the contract with them, you will still be under a sole agency contract with them, and could still end up paying two agents if you go somewhere else without first cancelling your existing contract! Incidentally, when you do cancel a contract you usually have to give a notice period, typically 2 weeks.

Make sure you know both the tie-in period and the notice period, and be prepared to haggle. No matter how adamant they may sound, at the end of the day they desperately want your business, and especially don't want their competitor getting you instead! The same goes for EA fee - we started off at well over 2% and got them down to 1.5%. The key to it is not being arrogant or balshy, but calmly and confidently making it crystal clear you will go for whichever EA gives you the best bottom line deal. Do that with all of them you visit. Whittle out the ones you don't feel you can trust to look after your best interests, or you simply don't like - both things are important. But once you home in on your favourite ... don't let them know it! Just say you think you prefer their approach, but their's not much to choose between them and if you don't get a very good deal (like that along the road!), you will reluctantly have to pass them by; but psych yourself up to say it like you mean it! But don't be completely unrealistic, else you will push them into a corner where they can only say "no", or will have no real motivation to work hard on your behalf.

But I do strongly recommend that book, we have learnt so much from it, and knowledge is power, in a process that I think is likely leave us feeling so much out of control!

One more thing. We were very wary of EAs who reckon they are typically selling houses in 2 or 3 weeks. We feel that if they can do that in these difficult times it probably means they are selling houses too cheap. Different EAs have different business models, not all of which are about getting you the best price they can. If they can sell houses very quickly for lower prices, that may be more profitable for them. But if you are prepared to wait a bit longer another agent my get you a better price. Try and find out what makes each EA tick.

G_M

Agree with everything reheat says, but I'd add that Buying and Selling a Home for Dummies, by Melanie Bien is available in my local library. Check it out there first for free!

Davesnave

Hopejack wrote: »

Thanks GM, very useful - I can't recall what else was said about the specific wording in a contract - it might have been Davesnave who wrote it so I'll PM him.

As you know now, it wasn't me, but you could try PMing chickmug for any specific advice; he's a helpful ex-agent and knows his stuff. Just thought of him this a.m.
http://forums.moneysavingexpert.com/member.html?u=307995

reheat

G_M wrote: »

Agree with everything reheat says, but I'd add that Buying and Selling a Home for Dummies, by Melanie Bien is available in my local library. Check it out there first for free!

Good money saving plan, initially at least. If OP then decides it's for them, it could then save far more pennies by having it available to browse in the evenings. And I find being able to scribble notes in the margins invaluable - they are in context and don't get lost unless you lose the book!

reheat

Should have mentioned before. The EA we are going with originally gave no hint they would consider a % fee at all, 'insisted' they only did fixed price based on the initial asking price. But we made it clear that on that basis we were not at all interested, and by the time we walked out of the first meeting a % fee of the selling price was agreed in principle, though not the % figure itself at that stage.

Hopejack

Thanks for the replies

I do know that at least two of the EAs I'm thinking of have reduced their fee to others I know that are selling their places so I know it is achievable although I obviously wouldn't tell the EA that!

I will definately have a look for the book - thanks very much!

I did find another post on here last night which had a link to some of the wording you mentioned Reheat. I didn't realise you couldn't take the contract away and look at it - I certainly won't be signing there and then!!