Sole Agency Agreement Contract

Adly812

I am about to list my property for sale and the agents want me to sign a sole agency agreement which lasts for 16 weeks initially, with 2 weeks written notice to cancel thereafter. Also in their terms they state that I’d be liable for their fees if I sell to a buyer they introduced within a 6 month period after our agreement expires.

It is a no sale no fee. 

I detest signing contracts, but I can’t list my property obviously without a contract. So before I sign I am getting them to confirm a few things, my own contract perhaps.

looking for any further tips or advice on what to include for them to confirm before I go ahead and sign their contract.


~  That if we end our agreement through written notice after the contract period has expired (in which case is 16 weeks from the date on the contract); you will not hold me accountable for your fees, even if I decide to sell in the future to a buyer introduced by you following the 6 month period of expiry or cancellation of the contract agreement?

- Please confirm you are willing to make available to me the list of buyers introduced by (the agent) or the buyers in which you had negotiations with during our contract agreement on request to avoid conflicting issues if I choose to sell after our agreement is cancelled.

- Please also confirm your commission fee is only liable on exchange of contracts and you will not hold me accountable for your fees if any of the parties do not proceed for various reasons to exchange contracts?

-Please confirm that I am not liable for your fees if I do not accept offers from buyers that you introduce to me? 

eddddy

It's also good if the EA is a member of the Property Ombudsman Scheme (most are).

Also some things to check in the contract...

• I've seen EA contracts where they say 'No Sale, No Fee' - but then the contract has a "Ready, Willing and Able Buyer" clause, so they're not fully 'No Sale, No Fee'. (i.e. you have to pay the EA if they introduce a Ready, Willing and Able buyer, who've you've accepted and offer from, and you later decide to withdraw.)

• I've also seen EA contracts where they say 'Sole Agency' but they read more like 'Sole Selling Rights' - for example,the contract might require you to direct any interested potential buyers to the EA. (But maybe you're happy with that.)

FWIW, I've always found it possible to negotiate EAs down to an 8 week minimum contract period - including the notice period.

Adly812

However the way they have worded this sole exclusive agreement really has me Questioning.

 The Seller will be liable to pay our full commission in addition to any other costs or charges agreed, if conditional contract of the sale of the property are exchanged in the period which the agent has sole selling rights, even if the purchaser was not found by The agent but by another agent or by another person including the seller or if unconditional contracts for the sale of the property are exchanged after the expiry of the period during which agent has sole selling rights to a purchaser who was introduced to you during that period or with whom Agent had negotiations about the property during that period. This liability extends for 190 days from the date this agreement is terminated.

Dual fee liability may occur where you have previously instructed another agent to sell the property, or where you instruct another agent to sell the property on sole agency or sole selling rights basis, during or after the termination of this agreement.

it’s not worded well and liability 190 days after we end our terms of agreement? 

eddddy

So that's not a "Sole Agency Agreement" - that's a "Sole Selling Rights Agreement".

(Did the EA say it was a "Sole Agency Agreement" as per your original post, or was that your choice of description?)

What you've quoted sounds like a standard "Sole Selling Rights Agreement".  The main negatives compared to a "Sole Agency Agreement" are:

• 1) if you find your own buyer, you still have to pay the EA's fee

• 2) If your property was previously for sale through another EA, and somebody they introduced comes back and makes an offer, and exchanges contracts during your contract period with this EA - you have to pay 2 lots of EA fees.

Point 2 is the most serious - but typically only applies if you've previously marketed through another EA.  If that's the case, I would strongly suggest that you re-negotiate that contract term.   (You wouldn't have that problem with most "Sole Agency Agreements")

PollyWollyDoodle

Sixteen weeks seems a long time. I’ve just signed up to a six week tie-in. It may depend on the area

justworriedabit

16 weeks is way too long.
We've only done 3 week, ever. If they can't find a buyer within three weeks, try someone else. These days with the likes of Right-move, ensure your agent is on that site along with the other top one.

We've always sold, or had solid offers by then.

All fees are awlays subject to property being sold, plus VAT.

Do this - any EA you are interested in, give them a call pretending to be a buyer, se how they deal with you, spedd of this and ask them something they need to check and come back to you.

importantly, you need a proper agent that is open 7 days a week.

Adly812

They wrote their contract as a terms of business and then had Exclusivity/Sole Agency in the paragraph I detailed.
so I assumed it was sole agency agreement and your right, it sounds like sole selling rights.

I never marketed with anyone prior to them. So does this mean that once the contract ends and the 190 days liability, that I can exchange and sell to another buyer without being liable their fees?

eddddy

Adly812 said:

I never marketed with anyone prior to them. So does this mean that once the contract ends and the 190 days liability, that I can exchange and sell to another buyer without being liable their fees?

The 190 days only applies to buyers introduced during the "Sole Selling Rights" contract period.

For example...

• If the "Sole Selling Rights" contract period runs from April to July, maybe 15 prospective buyers will be introduced during that period.

• If, within 190 days after you've terminated the contract, one of those 15 prospective buyers goes on to buy your property, you have to pay the EA a fee.

• If you sell to somebody else within those 190 days, you don't have to pay this EA a fee.

So... you have to give a list of those 15 people to your new EA, and tell the new EA not to deal with them, but refer them back to the old EA - and agree with the new EA that you won't pay them a fee, if one of those 15 people eventually purchase.

Adly812

Thank you for the clarity. I am definitely needing to negotiate the contract terms now if I sign up with them. Far too stringent restrictions IMO 

saajan_12

Adly812 said:

~  That if we end our agreement through written notice after the contract period has expired (in which case is 16 weeks from the date on the contract); you will not hold me accountable for your fees, even if I decide to sell in the future to a buyer introduced by you following the 6 month period of expiry or cancellation of the contract agreement?
 

The rest seems fine, but I can't see them agreeing to this (and personally I don't think you're being fair). They could be a great agent, find you a buyer during the contract. In the 3-4 months it usually takes for conveyancing, you wait out the minimum term, serve notice and then exchange with the buyer. Under your proposed terms, they wouldn't get any commission. 

caprikid1

saajan_12 said:

Adly812 said:

~  That if we end our agreement through written notice after the contract period has expired (in which case is 16 weeks from the date on the contract); you will not hold me accountable for your fees, even if I decide to sell in the future to a buyer introduced by you following the 6 month period of expiry or cancellation of the contract agreement?
 

The rest seems fine, but I can't see them agreeing to this (and personally I don't think you're being fair). They could be a great agent, find you a buyer during the contract. In the 3-4 months it usually takes for conveyancing, you wait out the minimum term, serve notice and then exchange with the buyer. Under your proposed terms, they wouldn't get any commission. 

I agree you are wasting your time with that request, find a good agent and treat them with respect and they will get you a good price for your house, they are not idiots or mugs.