Types of Selling Agreements

Before an agent can offer your property for sale, they must have a signed authorisation from you. There are the following kinds of agreement:

Sole Agency Agreement

This is the cheapest option - you agree to let just one agent tried to sell your property for a set number of weeks. Some agents will try to get you to sign a contract for three to six months, but try to avoid this as you may very well want to change agents if they turn out to be hopeless. Some agents may offer cash incentives to obtain the 'sole agency' rights to sell a property. The fee for sole agency is usually 2 to 2.5%. Take into consideration that VAT at 17.5% is always added to bills, for all agreements.

An estate agent may well agree to a shorter sole agency time than their terms and conditions state. Try to get this amended when you sign up, rather than challenge it later if they haven't found a buyer.

Sole Selling Rights

Avoid this agreement if at all possible, as it means that you must pay the agency a fee even if you sell your home to a friend or relative. Normally you should only pay an agent a fee if the buyer was introduced by them.

Multiple Agency

You instruct as many agents as you like and the one who sells your property receives the commission. The theory is that more agencies will give you a wider audience, which may mean you receive a better price, and so can afford to pay a higher commission. However, marketing material is often inferior to other options and so you may need to pay for extra marketing.

If you start with a sole agency agreement and the agent doesn't manage to sell your property within the agreed sole agency time, you can try multiple agency as the next step. Multiple agency may be worth considering from the start, however, if you want to sell very quickly, or if your property falls between two areas of potential buyers (whether districts of the city, or nearby towns) and your first choice of agency doesn't have a branch in both areas. The fee for multiple agency is usually 2.5 to 3%.

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. However, this agreement is pretty rare, and generally a waste of time, as a multiple agency listing would offer a better service. The fee for joint sole agency is usually between 2.25 and 2.75%.

Flat Fee

Some agencies 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.