Estate agent contracts are not just complex, they can cost you time and money. Therefore, you need do all you can to understand what you are signing. The agents want your business so feel free to challenge anything you are not comfortable with. Here are some tips to help you.
Don’t accept percentages on face value
When you accept a percentage without working out the actual amount it equates to, the final bill may come as a shock. So instead of having in mind that the estate agent is due 10% of a sale, have in mind that you are paying £3,000 p.a, for instance. Don’t forget to factor in the VAT, as most estate agents don’t include this upfront. Negotiate extensively to bring down the percentage due the agent. A reduction of 1% can save you quite a few thousand pounds in the long run.
Make sure the contract is flexible
Most estate agents will add a tie-in period to your contract. This shouldn’t be a concern but it is possible that you will become disgruntled with the services of an agent and look to move elsewhere. You need to be sure you can move within the tie-in period without incurring any penalties. “Don’t accept a sole-agency lock in period of more than 12 weeks” CNM Estates, one of the biggest real estate developers inn London you can Follow CNM Estates here.
Be wary of any hidden fees
You need to be careful of extra fees such as marketing or penalties for leaving a contract early. Ask for them to be removed if you are not happy with them. In fact, marketing fees should be included in the commission fee. All other additional charges should be agreed in writing beforehand.
Understand the main types of contractual arrangements
When working with an estate establishment, there are many types of contracts you can possibly sign. All of these have their own benefits and draw backs. Therefore you need to choose carefully.
- Sole selling rights contract means the agent is the only one allowed to sell your home in the period stipulated. Even when you find a buyer yourself, the agent must still be paid.
- Ready, willing and able purchaser contract is perhaps the mostdicey of all. It means you will pay the agent for finding a willing buyer even if you don’t agree on the terms of sale.
- Multi agency contracts allow you to use as many agents as you wish and only pay commission to the agency that sells the property. This approach is best if you are selling a high value property.
- Sole agency contracts allow you to avoid paying an estate agent if you find your own buyer. However, you need to ensure the contract isn’t open-ended to avoid paying the agent a commission in future!
With these tips, you can make more informed decisions when signing an estate agent contract.