One of your first challenges when selling a property is interpreting, agreeing to, and signing your estate agent’s contract. This can be quite a daunting process, but with understanding, you can make an informed choice and, if necessary, negotiate any options before you sign.
Your estate agent’s contract is legal and binding for its full duration, normally somewhere between four weeks and four months. For example, if you agree to sell your property through Agent A, you can’t market it with Agent B during the term of the agreement. If your property is not getting any interest through Agent A, you will have to wait for the contract term to end, before changing to a new agreement.
According to Rightmove, currently nationwide the average time for a seller to find a buyer is 65 days, over nine weeks, and it takes a further 126 days, or eighteen weeks, conduct all the legal processes and arrive at completion.
Bearing all this in mind, the best results will be achieved when you set a realistic price, and give your agent a fair and reasonable period of time to achieve an accepted offer, perhaps longer than you might have done a few years ago. I would suggest ten weeks for a standard property, or perhaps twelve or more weeks if the property has significant challenges, such as flood risk, which make it less likely to sell quickly.
You should also keep in mind that if your property is high value, your agent may make a significant financial up-front investment, in order to offer you a premium service. Professional photography, stylists, drone photography and bespoke brochures don’t come cheap, and take longer to implement, but if you give your agent the opportunity to continue marketing for a longer term, rather than interrupting the process and changing agent, it will be more likely to bear fruit.
Here’s another reason to avoid being too hasty: if you change agent, Rightmove will mark your old property listing with the old agent as ‘No longer on the market’. There will be no link to your new agent’s listing. This means that if a potential buyer saved your house as a favourite, and came back to Rightmove to arrange a viewing after you had changed agents, they would see ‘No longer on the market’ against your property, and would naturally assume that your house was no longer available.
Types of agreement
There are four main types of estate agency agreement in England and Wales. The first two involve only one estate agent, the second two involve two or more agencies. The choices are the same whether your estate agent is a solo operator like myself, a larger independent, or a big corporate agency.
1) Sole agency
If you choose a sole agency agreement, the estate agency named in the contract is the only one which is allowed to sell your home. You will benefit from having a single point of contact, and you will probably build up a warm and supportive relationship with the agency. Out of the four options, you will find this one the simplest and most straightforward to administer.
If, during the term of a sole agency agreement, a buyer finds your property as a result of seeing the estate agent’s advertising, social media posts, or for sale boards, their fee will be due. For example, Mrs Buyer may spot your for sale board, walk up the towpath, and talk to you over the garden gate. Because the estate agent’s board caused them to investigate your property in the first place, the agent’s commission is due.
However, if you sell your property yourself, no estate agent’s fees will be due. For example, if Mrs Buyer is out for a walk, and there is no for sale board by your property, but by complete coincidence she gets talking to you over the garden gate and decides to buy your property, you will not need to pay the agent, provided that you are willing to handle all the negotiation and sale procedures by yourself, without the agent’s help.
2) Sole Selling Rights
If you sign a sole selling rights agreement, the estate agent will be the only entity with the right to sell your property during the term of the contract. This means that you will still have to pay the estate agent’s fees if you find your own buyer, whether it’s a friend, a relative, or a complete stranger.
Sole selling rights were once considered a Very Bad Thing, but this is no longer the case, because the internet has vastly changed the landscape of property marketing. In the past it was relatively easy for an estate agent to work out how a buyer found a property, because the advertising channels were so straightforward. A sale was almost inevitably the result of a customer contacting a high street estate agent, or seeing a print advertisement in the local paper.
Now, however, it is much easier for a buyer to contact an owner direct via social media, and it is much more difficult for the agent to prove how this buyer found out that your property was for sale. Was it when they spotted it on a property portal? Or saw a post showing the agent’s professional photography on social media? Or was it when they noticed a for sale board when they were watching a narrowboating YouTube video? Wherever it was, it would be near impossible for the estate agent to prove that their advertsing was responsible, as your buyer’s behaviour on the internet is private and anonymised.
Even a genuine private buyer may be influenced by the agent’s work, for example they may refer to the floorplans on the agent’s Rightmove advert, or they may make an offer that they wouldn’t have made otherwise, thanks to the advice the agent gave you on preparing your property for sale, or the work carried out by the home stylist they employed.
Given the complexity of these relationships, and the fact that many agents put a lot of time, energy and hard cash into promoting your home, it is not surprising that they want to protect their investment by securing a sole selling rights agreement. I predict that you’ll be seeing a lot more of these contracts in the future. They offer clarity and transparency to all parties.
Instructing more than one agent
Instructing two agents is often the best way to maximise the pool of potential buyers who see your property.
Whilst there are some definite advantages to using two agents, there is not a lot of point selecting two who cover exactly the same market area and target audience. The ideal option is to combine the services of a local agent who knows your area and has a great presence locally, with a national agent who can add a worthwhile advantage in terms of specialist advice and a mature niche audience which they have carefully nurtured over the years. (Yes, that’s a little nudge in the direction of choosing Canalside Homes as your second agent!)
Managing your sale through two agents can be more stressful, and there may be complications, especially if the estate agents do not have a good rapport with each other. For example, you will need to be more careful to avoid double booking of viewings, and there may be conflicting information.
I don’t recommend instructing more than two agents under any circumstances. It can only harm the presentation of your property, your relationship with the agents, and their willingness to put in any effort on your behalf.
There are two options when instructing multiple agents to sell your home:
3) Joint sole agency
A joint sole agency is when two agents agree to market your property together and split the commission. Of course, if you commit to a joint agency agreement and you sell the house through a third agent, you would be in breach of contract, and you would still have to pay the agreed fees to both agents.
As the commission is split between two agents, it is possible that one or both agents will expect a higher fee. You are within your rights to haggle over any increase in fees, especially where you feel that the sole agent has had a fair crack at the whip, and has failed to sell your property.
Don’t worry about negotiating the percentage split between the two agents. If you appoint two agents at the same time and each one attends their own valuations and viewings, a 50/50 split would be usual. In more complex situations, they will normally arrange matters between themselves.
If your first agent is at all reluctant to accept the amicable appointment of a second agent, this may not be the best way to go. The success of a joint agency depends upon a positive relationship between all parties, transparency, and great organisational skills.
4) Multi-Agency Agreement
In a multi-agency agreement two or more agencies are instructed, but only the agency who makes the sale gets the commission. In this type of agreement the agencies are directly competing against each other. Although a bit of healthy competition would seem to be an advantage, in reality the agents can be so eager to grab the sale, that they can put you under pressure and neglect to negotiate the best possible outcome for you.
Let’s take an example where several buyers are interested in your property. Which buyer should you choose? Naturally, each agent will be keen to promote their own client. We have to assume that they do not know the circumstances of the other agent’s clients, so with the best will in the world they cannot be objective in their advice.
This situation can also confuse and upset potential buyers. For example, you might agree a sale via Agent 1, but if Agent 2 delays withdrawing your property from sale, your buyer may get jittery and pull out of the deal.
The big decision
At the end of the day, the estate agent agreement you choose is entirely up to you, and will depend upon your personal preferences, your property, and the market conditions in your area. Take your time, and don’t allow any agent to pressure you into making your decision.