Contracts – What Did You Just Sign?

There aren’t many things that got on my nerves as an Estate Agent, you could call me all the names under the sun and I would sit there and let you have your therapeutic moment – you could disagree with everything I have told you about your property price and marketing because different opinions are what make the world interesting.

But, if I spent one hour on my first visit to you discussing your needs and also your properties, and then on the second visit a further hour ensuring you are happy with the photographs and details. Why, when I hand you the contract to sign, a contract for this huge transaction, your biggest asset – do you look at the commission, look at the marketing price, sign it and slide it back across the table? I always asked “Have you read it all? and is there anything you would like to go over?” and then wait for that stock answer – “No, all contracts are the same”.

I subsequently had to change my pitch to include a read through of the contract, just to ensure clients knew what they were signing!

So here is a handy guide of things to look out for.

THE BIG 4

The Fee: This comes in two forms Percentage and Fixed Fee

Percentage: The amount will go up or down depending on the final price achieved on the day of completion. Check to see if VAT is to be added or included. Calculate the fee roughly so you are aware of what the total amount will be.

Fixed Fee: No matter what you sell your home for, this is what you will pay. Check to see if VAT is to be added or included.

(TIP: Check to see when this fee is payable – In my opinion you should only pay a fee when your property is sold, why pay for a job not done?)

Agency Period:

Every Agent will require a period of exclusivity when being instructed to sell your home (unless you are going with multiple agents) – 8 to 12 weeks is normal, anything above that and you have to wonder about their confidence in selling your home – remember it is a contract so 10 months means 10 months!

(Tip: There will also be a notice period, which is generally 2 weeks, if you sign a 10 week contract you can hand in your notice on the 8th week)

Type Of Contract: This will either be Sole Agent, Multi Agent or Sole Selling Rights.

Sole Agent: You are instructing one agent to sell your home for a fixed period of time, if you managed to find a buyer yourself you do not have to pay the agent their fee.

Multi Agent: You are instructing more than one agent to sell your home and will only pay a fee to the agent who sells your home – this type of agreement will come with a higher fee payable.

Sole Selling Rights: Almost the same as Sole Agent, but if you managed to find your own buyer you will still have to pay a fee to the agent.

(Tip: Avoid Sole Selling Rights, there is no need for them, Sole Agent or if you think there is a need Multi Agents)

In-House Services:

Check to ensure you have not been signed up to paid for services such as conveyancing, financial services and Energy Performance Certificates (E.P.C). Make sure that viewings, traditional marketing and sales progressing are all part of the fee.

(Tip: Although you will need the paid for services, it can be very costly being placed with the wrong companies – worst of all it could cost you the sale of your home.)

 

THE ‘JUST CHECKING’ LIST

Marketing Price:

Just check that the value is correct as it will soon be on property particulars and websites across the globe. This really isn’t high on the contract priority list – after all if you get an offer £5,000 over the asking price, you wont say NO because your contract says a different value.

The Board:

A board is a great marketing tool, both for you and the agent – if you don’t want one then tell the agent straight away as they tend to pop up just like magic – if you do then indicate where you would like it placed. Some properties have covenants in their title forbidding the erection of a board (normally leaseholds) so it may be wise to check.

Keep The Original:

Once the contract is signed, keep the original copy for your records, that way you know that nothing can be changed without your knowledge.

Withdrawal Fee:

You enter into the contract with the sole purpose of selling your home, but something out of your control means that you have to take the property off the market – make sure that there will be no fee for this.

 

I can’t make you read the whole contract from start to end, but if something happened and the dispute ended in front of a judge, I don’t see “I thought all contracts were the same” as the best defence in the world!

 

 

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Selling property for over 25 years, helping vendors achieve higher values, purchasers to get the home they want and helping Estate Agents achieve their goals.

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