Q
I’m selling my house and have appointed an agent but not yet signed the contract. The contract proposes a tie in period of 16 weeks. Is this standard for estate agents? It seems a little long. Is there anything else I should be looking out for? PW, Loughborough
A
Paula Higgins, chief executive, Homeowners Alliance says: You’re right to be concerned about the length of time the estate agent is trying to tie you in for. Four months is a long time to commit to an agent, which I assume hasn't suggested it will take anywhere near that long to find a buyer?
It's important you aren't tied in for too long in case, for some reason, you aren't happy with how the agent performs and want to switch your business to another agent. We believe anything above 12 weeks is too long so do negotiate.
It’s also important to check the notice period, which is the amount of time you need to give notice in writing of your desire to terminate the contract. It’s usually around 14 days’ maximum but when you're able to give notice differs between agents. You'll still be contractually obliged to stay with the agent for the tie in period but some will allow you to serve notice two weeks before the end of the tie in period - so you can leave as soon as it expires, while others will require that you wait until the tie-in period is over before giving written notice of termination.
Don't be afraid to ask for these items to be changed in the contract; if an agent wants your business then they should comply.
As with any contract, it’s essential you read all of the documents carefully. There are several clauses which are often included by agents that are not really in the best interest of the seller.
For example, check that the commission rate in the contract is in line with what you have agreed with the agent and make sure it clearly states an anticipated figure with the VAT included so the final amount you owe the estate agent doesn't come as a shock.
Avoid agreeing to sole selling rights as this means the estate agent gets a commission even if you were to find the buyer yourself. Open-ended sole agency contracts can mean that an agent can still claim cash from you even if an offer is made months after an agent stopped marketing your property.
Do not sign a contract with a ready, willing and able purchaser clause. This means that if the agent finds you a buyer but, for whatever reason, you are suddenly unable to go through with the sale you’ll still have to pay them.
Check for any additional charges or withdrawal fees and make sure the agreement is payable upon completion only. Sales fall through all the time - be clear that the commission won’t be paid until the sale is done.
Question any additional marketing charges or incentive fees - they should be covered by the commission.
Make sure you haven’t been signed up to any in-house service, (such as conveyancing), that you haven’t agreed to - particularly if there are any handwritten amends made to the contract (handwritten notes should be a red flag). Get a quote for additional services by all means, but you'll want to shop around for the best deal.
And be aware of future liability clauses. Some agents will include a clause in their contract that stipulates if you move on from them to another agent and a buyer who they ‘introduced’ to you buys the property via the second agent, both agents will be owed commission. You don’t want to pay twice! If you have already signed a contract and think this may happen to you, get in touch with us at Homeowners Alliance.
Paula Higgins is chief executive of property help portal, the HomeOwners Alliance and is one of the organisation’s co-founders.
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