Estate agency terms

Owain_Moneysaver

I am close to putting a house on the market and looking at estate agency terms. I'm a 'first time seller' and don't know if the terms offered are normal or reasonable.

sole agency basis at an agreed fee of 1.25 % plus VAT And is subject to a minimum fee of £ 1800 plus VAT.

Is a minimum fee normal? If the sale price goes below a certain amount is it right the agent should get a proportionally greater fee when he has achieved a lower sale value for me?

or a minimum period of 20 weeks

This seems a long time to me as would run through to October. If the agent can't drum up a sale by the summer I'd want to remarket the property or go to auction.

9. Sole Agency - ...
But where the Client exchanges unconditional contracts for the sale of the Property after this Agency Agreement has ended, the Client will only be liable to pay remuneration to the Agent under paragraph i) or ii) above if:
- Such exchange of contracts takes place through another agent within 6 months after this Agency Agreement has ended; or
- Where no other agent is involved, such exchange of contracts takes place within 2 years after this Agency Agreement has ended.

If the agent can't get a buyer who can progress within the timescale of the agency agreement, and I put it to another agent (or even to auction) and the same potential buyer sees the property again on Rightmove etc and contacts the new agent - or me directly - why should I have to pay the old agent commission for not actually obtaining a sale? This could obviously lead to a double commission situation.

DaftyDuck

Fees and tie-in terms and lengths are all negotiable. Try several agents, and gently play one against the other.

I'd never accept a tie-in of more than eight weeks, and I normally pay 1.25% inc VAT max, often under 1%.

eddddy

Owain_Moneysaver wrote: »

Is a minimum fee normal? If the sale price goes below a certain amount is it right the agent should get a proportionally greater fee when he has achieved a lower sale value for me?

The fee is usually negotiable. Look for quotes from cheaper agents, and ask this EA to 'price-match' a cheaper one.

Owain_Moneysaver wrote: »

This seems a long time to me as would run through to October. If the agent can't drum up a sale by the summer I'd want to remarket the property or go to auction.

Yes - 20 weeks is too long...

"Let's say 6 weeks minimum period. Obviously, if you've done a good job in those 6 weeks, I'll let the agreement continue"

Owain_Moneysaver wrote: »

If the agent can't get a buyer who can progress within the timescale of the agency agreement, and I put it to another agent (or even to auction) and the same potential buyer sees the property again on Rightmove etc and contacts the new agent - or me directly - why should I have to pay the old agent commission for not actually obtaining a sale? This could obviously lead to a double commission situation.

That's standard. A prospective buyer should always go back to the agent that introduced them - and not to a new agent.

Give the new agent a list of names of people introduced by the old agent. Tell the new agent not to deal with those people, but to refer them to the old agent.

ThePants999

Fee is down to what you can negotiate - where having competitive offers from other EAs would help.

Agree that 20 weeks is ridiculous. I wouldn't accept more than half that, and would be pushing for less.

The sole agency clause is standard as long as "paragraph i) or ii) above" talks about buyers introduced by this agent during their period of agency. If it's literally just the bit you've quoted, and you're liable if you sell to anyone for 6 months / 2 years after ending the contract, it's obviously silly.

penguingirl

Last time I think we agreed a contract of 12 weeks, with 1.25% fee if buyer was found in 6 weeks, 1% after that. I think that included vat, but can't remember. But our ea was very keen to have us on their books as it was a pretty easy house to sell in the middle of the village and we were sensible about price /wanted a quick sale to relocate. We had a proceedable buyer within 4 weeks despite it being over Christmas.

Definitely room for negotiation with EAs.

G_M

Negotiate.

If they won't compromise, try a different agent.

Get rid of the minimum fee. In fact reverse it! Once the agent had got me all excited by the high sale price he was 'confident' he could get me, I suggested I'd pay his suggested % fee if he achieved that price, but if the sale price ended up lower, then he'd get a reduced %.

20 weeks! :eek: Ask for 4 and agree to 6 or max 8.

And make sure you know, and agree in writing, exactly how/where they are going to advertise, how many photos etc they are going to include etc.

Owain_Moneysaver

G_M wrote: »

Get rid of the minimum fee. In fact reverse it! Once the agent had got me all excited by the high sale price he was 'confident' he could get me, I suggested I'd pay his suggested % fee if he achieved that price, but if the sale price ended up lower, then he'd get a reduced %.

Yes, I'd thought of offering him something like that. I want a reasonably quick sale and I'm not going to be greedy holding out for an impossible value.

AnotherJoe

I did that, negotiate on fees with an agent that wouldn't negotiate on fees, promised me I'd get a price i knew I never would (and didn't) , said fine if you are that confident then if it doesn't sell at that price or higher, a lower fee is in order and you've got nothing to lose.

The other thing, from reading here, make sure the fee is payable only on completion. None of this "ready willing and able" buyer rubbish.

hazyjo

I'm currently paying 1% with a 6 week tie-in. Didn't need to negotiate it, he offered it (lower/less than their standard rates). I never pay more than 1% (+ VAT).

Jx