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Choosing an Agent

Most people prefer to use an estate agent rather than sell a home themselves, particularly when selling a second home. If you purchased a property through an agent, it’s often advisable to use the same agent when selling, as he will already be familiar with it and may still have the details on file. You should take particular care when selecting an agent as they vary considerably in their professionalism, friendliness (some have a decidedly superior manner unless you look and sound like a millionaire), expertise, experience and honesty. The best way to investigate agents is by posing as a buyer (you can also get a friend to do this). It’s preferable to choose an agent who’s a member of a professional organisation, such as the National Association of Estate Agents (NAEA, (01926-496800, www.naea.co.uk).

You should use a local agent unless you’re planning to market a property internationally – small and friendly agents generally try harder than huge impersonal chains. Most agents cover a relatively small area, so you should take care to choose one who regularly sells properties in your area and price range. You should obtain valuations from at least three agents (they may vary by as much as 20 per cent). Ask to see a contract and details of other properties and compare them with other agents. When comparing agents’ commission and other costs, make sure that you know exactly what a standard agreement includes and what any extras will cost, and obtain the agreement in writing.

Property Details

Make sure that the property description is correct in every detail, particularly the room dimensions, and ensure that all special features and positive points are listed. Include a list of local amenities and distances to shops and supermarkets, schools, local towns (if situated in the country), public transport (e.g. a railway station), local attractions, sports facilities, etc. Have your utility bills to hand so that prospective buyers can see what they will have to pay for electricity, gas and water. You should also make it clear what’s included in the price (e.g. carpets, curtains, appliances, etc.) and what’s negotiable – either for an extra cost or which could be included if the price is right.

Fees

Agents fees vary considerably from around 2 to 3 per cent (curiously the average is around 1.5 per cent), depending on the agent, the area, the price of the property, the state of the local property market and the type of agreement. Fees are negotiable and you should always try to negotiate a lower fee, particularly when selling a desirable property. Fees in London and the south-east are generally higher than other regions, although sole agency usually includes a ‘for sale’ board, photographs, information brochures/leaflets (with a floor plan) and may also include some advertising (other than in the agent’s window or on his website). Elsewhere all of these could cost extra, particularly advertising (e.g. in local newspapers). Fees are usually due when contracts are exchanged (or on conclusion of missives in Scotland), but you don’t pay until the sale is completed.

Contracts

Before offering a property for sale an agent must have a signed authorisation from the owner or his representative. There are the following kinds of agreement:

• Sole Agency – All agents offer this option, although it isn’t always the best deal from the seller’s point of view. The advantage is that fees are lower and an agent usually makes more effort to sell your property and may include ‘extras’ such as advertising and printing a colour brochure. Agents will try to get you to sign a contract for three to six months which you should avoid, as you may wish to change agents if he turns out to be useless. Some agents offer cash inducements to obtain the ‘sole agency’ rights to sell a property. The fee for sole agency is usually 2 to 2.5 per cent.

Take care not to sign two sole agency agreements; if you do you must pay both agents’ fees if one of them finds a buyer.

• Joint Sole Agency – With this type of agreement you sign up with two agents only, both of whom agree to the arrangement and decide between them how they will split the commission. It is, however, rare and usually just as expensive as having multiple agency and therefore generally a waste of time. The fee for joint sole agency is usually between 2.25 and 2.75 per cent.

• Multiple Agency – You instruct as many agents as you like and the one who sells your property receives the commission, i.e. no sale, no fee. This is generally the best deal, as it gives you a wider audience, which may mean you receive a better price (and can therefore afford to pay a higher commission). However, marketing material is usually inferior to other options and you may need to pay for extra marketing. It pays to use more than one agent when selling to avoid dirty tricks – usually three is considered the maximum. The fee for multiple agency is usually 2.5 to 3 per cent.

• Flat Fee – Some ‘property shops’ charge a flat fee to sell a home, although this is non-refundable if they fail to sell it. Make sure that you know exactly what they will do for their money before paying anything. Some agents also charge a flat fee, e.g. £1,500 plus VAT (VAT at 17.5 per cent is always added to bills) for properties costing over £150,000 for a standard package, although this arrangement is rare.

• Ready, Willing & Able – Under this agreement you must pay an estate agent if he finds a buyer who’s prepared and able to buy your property and exchange unconditional contracts (conclude unconditional missives in Scotland). Note that if you have this sort of agreement, you must pay the agent’s fees if a suitable offer is made, even if you decide not to accept it.

Generally you should avoid a contract that states that fees will be payable for introducing a buyer who’s ‘ready, willing and able’ to buy; otherwise you could be liable to pay commission if you pull out of a sale before contracts are exchanged (which can happen for a variety of reasons).

• Sole Selling Rights – You must avoid giving an agent sole selling rights, which means that you must pay him a fee even if you sell your home to a friend or relative. You should only pay an agent a fee if the buyer was introduced by him.

You’re under no obligation to sign an agreement with an agent and you should take care before signing one. Note that you must still pay an agent’s fee if you sell to someone introduced by him within a certain period (e.g. one year) of the expiry of an agreement. Check the contract and make sure that you understand what you’re signing.

Total Costs

The costs when selling a property include the selling agent’s commission, an agent’s additional fees (advertising, marketing, etc.), solicitor’s fees and a seller’s pack (necessary from 2007). You also need to budget for any work that needs to be done to prepare a property for sale and the cost of moving to your new home (if applicable).

© Survival Books Limited 2005

“Buying, Selling & Letting Property” 2nd Edition, David Hampshire.
Reproduced with the permission of Survival Books Limited.

Further information on this topic can be found in “Buying, Selling & Letting Property” 2nd edition, by David Hampshire.

For extensive, annually updated information about buying, selling and letting property, you can purchase this book at www.survivalbooks.net

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