Estate agent contracts can be complex and confusing; most buyers and sellers might not even understand exactly what they are signing. However, once you have signed a contract with an estate agent, be it with estate agents in Leeds or anywhere in the UK, that contract is now binding by law. Signing a contract without thoroughly reading the contract could mean hidden costs, extra fees, associated expenses and many other such clauses that might not work in your favour. There are a few clauses and terms that you should look out for before signing a contract with your estate agent, and you should have the contract looked over by a professional before you decide to sign the dotted line. Here are some important things that you should look out for before you sign a contract with your estate agent.
What are the estate agent’s fees?
Some estate agents charge a flat fee, such as £3000 plus VAT, whereas others charge a commission-based fee which could range from 1 per cent to 3 per cent. Once you and the estate agent have narrowed down the exact fee, make sure that it is mentioned in the contract. Notice small details; there is a big difference between 2 per cent of the selling price and 2 per cent of the selling price plus VAT. If you are trying to negotiate the fee with your estate agent, you could offer 1 per cent if they get you an offer that matches the asking price and 1.20 per cent if they get you an offer that is higher than the asking price. Again, these terms and conditions must be mentioned in the contract.
Are photography and other such services included?
One area where estate agents can make a whole lot of money is in photography, staging and marketing. Will the estate agent charge you for photographing the property or is that included in their fees? What about staging the property and marketing the property online? Do you have to pay separately for these services or are these part of the estate agent’s fee? These details will certainly be mentioned in the contract. If these details are not mentioned, be sure to ask the estate agent and get them added to the contract. Also, notice if there is a notice period that is required over and above the tie-in period.
Are there any tie-in periods or notice periods?
Your contract will clearly state a tie-in period or notice period, which could range from 2 weeks to 2 months, depending on the estate agent. Be sure to have the flexibility to terminate your contract if you require, without having to pay any penalty. Some estate agents could charge you a withdrawal fee even if you withdraw during the notice period whereas others could charge you a penalty if you decide to withdraw during the tie-in period. If there is something in your contract regarding tie-in periods and notice periods that you do not understand, do not hesitate to ask your estate agent to elaborate on these conditions.
Does the estate agent have sole selling rights?
In simple terms, if the contract states that the estate agent has sole selling rights, then the estate agent is entitled to a commission or a fee even if he or she did not manage to sell the property. So, if you come across a potential buyer who is interested in your property without the help of your estate agent, you will still be obligated to pay the estate agent his or her commission. You should try not to agree to sole selling rights and attempt to get such a clause deleted if it is mentioned in your contract.
What happens if there is no sale?
Most estate agents have a ‘no sale, no fee’ policy under which they will not charge a commission or a fee if the property has not been sold. However, you need to read the fine print to figure out whether or not your estate agent has added the’ no sale, no fee’ clause to the contract. Also, avoid a contractual agreement that mentions ‘Ready, willing and able purchaser’. This means that if the estate agent is able to find a ready, willing and able buyer, but you do not decide to sell your property to this individual, you will still have to pay a fee.