Many clients I meet with on appraisals know they can use one or multiple real estate agents. They also know that using more than one agent could cost them more in fees. What they may not have considered is the fine print of each type of agreement or the relative merits of using one, two or many agents. Here’s our short guide to each;

single agency

Contracts of this type must say the following:

‘You will be responsible for paying us a remuneration, in addition to any other agreed costs or charges, if at any time, the unconditional contracts for the sale of the property are exchanged:

•with a buyer introduced by us during the period of our exclusive agency or

•with whom we had negotiations about the property during that period, or

•with a buyer introduced by another agent during that period.’

The agent is paid if he “introduces” a buyer during the contract period, or if he allows another agent to “introduce” a buyer within the original agent’s contract period. The definition of “introduced” is very broad. It can cover negotiations with a buyer, visits, sending details, phone conversations, and all of these scenarios:

•A buyer knocking on your door upon seeing a “for sale” board.

•A buyer who sees through one agent but then makes an offer through another agent.

•A buyer who is given details of his property by an agent and later realizes that he knows him.

•A buyer who sees through an agent but suggests they do a private deal

Contracts must have a set period of time (average is 12-14 weeks). Keep in mind that a contract almost always has a notice period at the end – add this to the stated length of the contract to calculate the actual amount of time you will be attached to your chosen agent. This type of agreement allows you to find a buyer for your home yourself without paying the realtor (a private sale). An “exclusive rights to sell” agreement (best avoided) would mean that the agent would get paid even if they found a private buyer.

Unique agencies are the most common deals: Most agents want an exclusive opportunity to sell their home. If the real estate agent is good, you shouldn’t need another agent to help with the sale. However, you may want to check how thorough an agent’s marketing is before agreeing to a single agency – if they don’t cover all the bases (or if they’ve overpriced your home to get the business), you don’t want to be locked into a contract. of months and months.

Joint Agency

If you appoint two real estate agents to act together on your behalf in the sale of the property, this is known as a ‘joint agency’ or ‘joint single agency’. A joint sole agency contract is where the real estate agents involved share the commission when the property is sold. In practice, the agent who actually finds the buyer usually gets a higher share of the commission, but this percentage share must be agreed upon at the beginning of the contract between the owner and both agents.

Joint agency is often a useful way to get out of a single agency before the end of the contract: if you tell your real estate agent that you are not satisfied and that you are considering terminating your contract as soon as possible, then give him the option of being retained in a joint agency, they might be smart enough to see the merits of a portion of a fee rather than none. This type of agency is also useful when you want to use two agents that offer different services (for example, a city agent and a country agent if you live on the border of a city). Keep in mind that most of the public has a negative perception of properties with more than one agent (“I’ve seen this before, there must be something wrong with it”). If you are considering a joint agency, try to choose two agents who can happily communicate/work together.

Multiple Agency

More than one agent is appointed and there is no fixed contract period. You can add as many agents as you want, remove one at any time, and so on. However, only the agent who actually finds the buyer gets paid.

Often used when a property is not being sold with a single agent, this is an extreme measure to take as the total fees will be considerably higher and the property can become overexposed very quickly. Confusion and disputes can also arise if agents argue over who introduced a particular buyer; be sure to keep track of each agent’s activity.

Rates in General

Estate agents fees are due on completion and should have been billed in the contract exchange. The invoice is sent to the lawyer acting on behalf of the owner, but the owner must also receive a copy to verify. Most deals are on a “no sale, no fee” basis, so you pay nothing if your home doesn’t sell (see additional fees below, though).

Fees must be clearly stated in the contract: if the fee is a percentage of the sale price, a maximum amount in pounds and pence must also be shown.

Although estate agents’ fees are often expressed as a direct percentage of the sales price, remember that they are also subject to VAT at the prevailing rate (currently 20%).

Some real estate agents charge additional fees on top of the sales fee; recently we’ve seen them expressed as “advertising fees” or “removal fees” (a charge if your property doesn’t sell or is taken from an agent). Start-up costs for brochure production and professional photography are also relatively common with top market agents; it would always be worth making sure you know the total of ALL fees you may be responsible for before signing a contract.

Be careful if you agree to a fixed fee from an estate agent – the fee is usually agreed based on the asking price, so if your property is selling for less, you are probably overpaying the agent compared to a real estate agent’s fee. normal percentage (which is charged on the final sale price)

If you want to give your agent additional motivation to achieve a maximum price, consider negotiating a tiered fee (for example, 1% if you get less than £240,000, 1.2% if you get between £240,000 and £250,000, 1 .5% if you get more than £240,000). 250,000). Set levels carefully to reward excellent service and penalize average results.

Additional tips

If you change realtors, make sure the previous agent gives you a list of the names of the people who “presented” your property. If one of those names continues to buy the home (in practical terms within 6 months of the agent’s contract termination date), the former agent is entitled to their fee. Make sure you don’t get yourself into a scenario where you owe both agents fees because you didn’t do your homework.

Always ask real estate agents to confirm the terms of your contract in writing (you’d think this is standard practice, but you might be surprised!) and if you end a contract with an agent, make sure they confirm that too.

You can go from one single agent to another, from one single agent to joint agents, or any other permutation.

Don’t go backwards in terms of marketing: If you’re leaving an agent because they’re not marketing your home effectively, take a breather and make sure the next one you pick can do better BEFORE you name them.