1 Using An Estate Agent

Pros

  • Your property will be offered to the open market giving you maximum exposure, and so the highest chance of achieving full market value
  • Both Buyers and Sellers are familiar and comfortable with this method

Cons

  • It can take a long time to sell, with no guarantee that you will sell at all
  • The Estate Agency sector is effectively unregulated with many inefficient operators, so you need to pick your Estate Agent carefully
  • Fees can be expensive for what is often a simple process of listing your property on property websites
  • Even on the open market, the amount you net after the sale could be just 90% of what your property is “worth” after you take into account what you lost through negotiation, Estate Agents’ commissions and legal fees

This is the traditional way to sell a house in the UK. If you need a certain sale within a fixed time period it is not the best way, although if a high quality property is offered to the open market at a competitive price there is a good chance of a fairly quick sale.

Even so there is the risk that the Buyer will withdraw later on, and even chain free sales that do complete can often take two to three months between the sale being agreed and completion.

Way to use Estate Agents

There are a number of ways you can use Estate Agents:

  • The usual way is to select one Estate Agent on a Sole Agency basis. You agree a fee – typically a % of the sale price –and appoint one Agent.
  • An alternative is to appoint two Estate Agents on a Joint Sole Agency. The fee is split between them, and so is usually higher than if using just one Agent. This is a useful option if your property will benefit from having two Agents with different areas of expertise, for example a local independent Estate Agent who specialises in properties similar to yours, and a national Estate Agency chain with a database of non-UK based Buyers.
  • Another variation is Multiple Agency, where two or more Agents are appointed, and where they work independently of each other – basically they are all in competition with each other and the one who finds the Buyer gets paid.Again the fee each Agent charges will be higher than their fee for a sole agency because they are incurring the costs of listing and marketing the property knowing there’s a high chances that they won’t be the Agent who gets paid.Agents don’t like Multiple Agency arrangements, and there is little benefit to the vendor in such an arrangement – generally it is better to have one, or sometimes two, highly motivated Estate Agents rather than several who will be more focussed on selling their other sole agency listings.

An Estate Agents Contract

You will normally be required to sign a contract with your Estate Agent(s). It is important to be aware of the following:

  • Term – many Estate Agents’ contracts will try to tie you in for a minimum period, typically 3 or 6 months. This might seem fair enough from their point of view as they are going to invest time and money in marketing your property.However if you are dissatisfied with them after the first few weeks you will be tied into using them until the contract expires. The better ones usually have (or will agree to) shorter Estate Agency contracts as they are confident in their ability to effectively market, and ultimately sell, the property.A 4 week contract is usually the best mutual solution. This doesn’t mean you will stop using them after 4 weeks, but it does give you the option to change Agents quickly if you need to.
  • Sole selling rights – most Estate Agents’ contracts will specify that they have sole selling rights – note that this is different to Sole Agency! What this means is that they are entitled to charge a fee whether or not the Buyer is introduced by them.From an Agent’s point of view this is a reasonable safeguard, as otherwise unscrupulous people could find a property for sale online, approach the Buyer direct, agree to buy it, and cut out the Agent by saying that they knew the property was for sale through a “friend” or some such story. In reality it is unlikely that anyone would be aware that a property was for sale unless it was advertised by the Estate Agent.There are exceptions though – for example, if you advertised the property yourself on a social networking site and found a Buyer, you’d be aggrieved at having to pay the Agent a fee if it was you who found the Buyer. Few Agents will agree to waive sole selling rights because they know that they can easily be exploited if they do.
  • Lock-ins – some Agents will try to lock you in by stating in their contract that if you give them notice, you are not permitted to market via another Estate Agent for a fixed period afterwards – often 8 weeks. Ask them to remove this clause so that you are free to use another Agent once your contract with them has expired.
  • A ready, willing and able buyer – if an Agent finds you a Buyer who can proceed to buy at a price you are happy with, and you accept the offer, and then at a later date decide not to go ahead, most Agents will have a clause in their contract to state that the fee is still due.Again this is a reasonable safeguard from an Agent’s point of view as otherwise they can be cut out of the deal – unscrupulous people could use the offer as a lever to get a higher offer from another Buyer not introduced by the Agent.However if you are unable to proceed for genuine reasons, such as the property you are buying falling through, you certainly don’t want to have insult added to injury by paying the Agent when no sale ensues. Therefore you should clarify with your Estate Agent before you sign the contract under exactly what circumstances you will be required to pay a fee.

Find out more about the ways to sell a house:

1 Using an Estate Agent
Types of Estate Agent
How Estate Agents Market Property
How Much is it Worth?
How Much are Estate Agent’s Fees?
Once the Property is Listed
Once a Sale has been Agreed
Estate Agent Tricks
Selling Without an Estate Agent

2 Selling to a Quick Cash Buyer
Watch out for the Unethical

3 Selling at Auction

4a Equity Release

4b Sell & Rent Back (SARB)

5 Creative Solutions
Exchanged with Delayed Completion

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By Richard Watters

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