The selling of a house can be a daunting task, from start to finish and a load of jargon that you probably don’t understand in between. Choosing the right estate agent is one thing, but signing the right type of contract for your situation and home is even more important. The last thing you want to do is pay double commissions or get into technical and legal difficulties over terms and conditions.
Below are the four most common type of contracts used by estate agents all over the country. I have tried to keep them the explanation as simple as possible. In a world of information overload, the four contract explained below should be simple to understand.
The sole agency is probably the most common type of contract used. Signing this contract allows one agent, the exclusive rights to sell your property in a given timeframe (generally 12 weeks) and the commission is solely due to that agent. It is only due when the agent finds a buyer.
There’s also something called a joint sole agency contract – which in short terms is a contract where only one fee is payable but two agents are involved in the selling process. The agents, amongst themselves, decide and agree on a how the commission is going to be spilt.
It’s pretty easy to get confused with Sole Agency and Sole Selling, they both include ‘sole’ and pretty much sound the same, but the terms and conditions behind this contract differ greatly to that of a Sole Agency.
Sole Selling is where an estate agent would be owned a fee even if they were not involved in introducing the buyer (during the term of the contract). In extreme terms, this could mean they would still be liable for a fee if the sale of the property was agreed to a friend or family of the owner, or if another agent introduced the buyer.
An estate agent would use the clauses for a variety of reasons including; protecting themselves in scenarios where vendors negotiate with buyers directly to try to avoid paying a fee. (think carefully before signing)
Multi-Agency is probably the 2nd most common type of contract (after sole agency) that you’ll come across, as the name suggests – you can employ the services of more than one agent to market your property and only pay the agent that sells the property. It is common practice to start out with a sole agency contract and after the initial contractual period is over, to move onto a multi-agency contract.
Ready, Willing and Able Purchaser
If you come across an agent that is using this type of contract, don’t accept it. It means you have to pay the agent for finding a buyer, even if you decide not to sell.
If your planning on selling your property and want expert advice call us on 0121 448 5190 for a no obligations consultation.