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All you need to know about Estate Agents, from buying to selling . Whether you're buying or selling a property, you will probably use the services of an estate agent. Although they don't need to be registered to set up in business, many do belong to the National Association of Estate Agents (NAEA) and the Ombudsman for Estate Agents (OEA) Choosing an estate agent to sell your property Making decisions about which Estate agent to use is never easy, fortunately the horror stories that you hear about in other parts of the Country don't seem to be as common place in Choose an estate agent that sells or specialises in your type of property and your area. Contact at least three estate agents before making your decision. Ask how long it has taken them to sell similar property in your area. Ask for the rate of commission the estate agent will charge. Ask what type of contracts they offer - sole, joint or multiple - and if there are any penalties in changing estate agents. Ask how and where they will advertise your property.
Selling a property Estate agents arrange the sale of property. They advise on price, negotiate between sellers and buyers and handle advertising. They usually offer other optional services such as arranging mortgages, surveys and conveyancing. You are under no obligation to use these services, either as a buyer or a seller. The seller is often called the vendor and the buyer is the purchaser. It is possible to sell property yourself, you can even list your property on the move2leeds website, however most people use estate agents. As their terms of business differ you should shop around for one who sells your type of property and offers terms that suit you. One of the best ways to chose is recommendation is to ask friends and relatives who have recently bought or sold property for recommendations also consider using an estate agent who is a member of the NAEA or Ombudsman for Estate Agents (OEA) Scheme. These agents operate under a code of practice which ensures that you will have access to help, and redress if appropriate, should problems occur with the service you receive.
The contract When you instruct an estate agent to act for you, you enter into a legally binding contract. Before agreeing to it, read the contract carefully and make sure you understand it. Find out whether you have the right to cancel the contract. Check how long it will run. It should allow a reasonable length of time to market your property and find potential buyers. Beware of ending up tied to an estate agent for an unreasonable length of time. If you are unsure about a contract, seek independent advice from a solicitor or your local Citizens Advice Bureau before agreeing to the terms.
You may come across the following terms in a contract. Make sure you understand what you are agreeing to.
Sole agency The estate agent you appoint is the only agent with the right to sell your property. As you are not an agent, if you find a buyer yourself you don’t have to pay the estate agent’s commission. You may still have to pay for advertising or a ‘For Sale’ board. Sole selling rights The estate agent is the only person with the right to sell your property. It differs from sole agency in that if you find a buyer yourself, you still have to pay the estate agent. If you appoint more than one estate agent to sell your property under a sole agency or a sole selling rights contract, each agent has the right to claim their fee when the property is sold.
Ready, willing and able purchaser With this type of contract, you have to pay if the estate agent finds a buyer who is prepared and able to buy your property and exchange unconditional contracts. You still have to pay even if you withdraw from the sale and unconditional contracts are not exchanged. The terms ‘sole agency’, ‘sole selling rights’ and ‘ready, willing and able purchaser’ must be explained in writing if they are used in a contract.
Charges Before you enter into a contract you must be given written details of how much you will be charged and when payments will be due. The estate agent must state either the exact amount you will be charged or, if this is not possible, the way in which the cost will be worked out and an estimate of the amount. You pay a percentage of the selling price of your property as a commission. Some estate agents charge a low percentage plus an additional charge to cover costs such as advertising and ‘For Sale’ boards. You should be told exactly how much the additional charge will be. If this isn’t possible, you should be given an estimate of the charge and a breakdown of how it will be calculated. Other agents charge a higher percentage of the selling price but this includes all costs. Occasionally, an estate agent may charge a fixed fee rather than a percentage. It should be clear from the estate agent’s terms and conditions when you will have to pay. Fees are usually due on exchange of contracts but paid on the completion of a sale. Under a ready, willing and able purchaser contract, you have to pay once a buyer who is prepared and able to exchange unconditional contracts is found. This still applies if you withdraw your property before the sale is completed. There may also be a charge to cover the cost of ‘For Sale’ boards and advertising.
Property particulars Once instructed, the estate agent visits your home to take details such as the number and size of rooms. A description of your property (known as property particulars) is prepared and advertising starts. There are strict rules covering the way in which property can be described. It is a criminal offence for an estate agent to make certain statements which are false or misleading. For more advice and tips on staging and selling your property click here Using an estate agent to buy a property
Register your Details Remember that estate agents need to know what you are looking for to be able to let you know! So as soon as you have decided which areas of Property particulars and viewing The estate agent can provide a written description of the property (known as property particulars). This will give you an idea of what a property is like. It is against the law for an estate agent to make false or misleading statements about a property. For example, if the particulars say the property has double-glazing and loft insulation, it should have these features. You may see these terms in property particulars:
If there are terms you do not understand, ask for an explanation. If you think you might be interested in buying a property, the next stage is to go and see it. The estate agent cannot charge you for arranging a viewing or showing you round the property. However, if you view a new property, or one that is still under construction, you may be asked to pay a non-refundable deposit or sign papers if you are interested in buying. Get advice from a solicitor first. Making an offer If you want to buy a property, you must first make an offer through the estate agent. This can be above, below or the same as the asking price. Before making an offer, seek the advice of a solicitor or your Financial Advisor. Move2leeds recommend that if possible obtain a DIP which is short for Decision in Principle from the mortgage lender you are looking to take your mortgage out with, this can be advantageous to you if more than 2 people are interested in the same property, as proves that you are in a position to be able to proceed with the sale promptly. Move2Leeds also recommends that if you are in a chain, which means you need to sell your current home before you can move that you don’t start looking! It stops disappointment if you are unable to sell your home in order to proceed with this sale. The majority of Estate Agents would inform their client, the person selling the house, that you’re not in a position to proceed and to wait for someone who is. When you make an offer, the estate agent must pass it to the seller promptly and in writing. The only exception is if the seller has told the estate agent some offers are not acceptable, such as those below a certain amount. Estate agents must treat all buyers fairly. They must not hold back offers from buyers who do not want to use their other services. For example, you should not be treated differently because you do not arrange a mortgage through the estate agent. The estate agent doesn't have to tell you about other offers which have been made. It is not always the highest offer that wins. The seller may decide to sell to the person who can proceed with the sale quickest. If your offer is accepted, the estate agent will send you a letter confirming the details. But at this stage there is no legally binding contract. The buyer can still receive and accept other offers, and both you and the seller can renegotiate the price and any conditions of the sale right up to the point when contracts are exchanged or accepted. Gazumping Although the seller may have accepted your offer, the estate agent must pass on any further offers received unless specifically told not to by the seller. This can lead to 'gazumping', where a higher offer is put in and accepted at the last minute before contracts are exchanged. To avoid this, you can make your offer on the condition that, for a set period, other offers will not be accepted. Get advice from your solicitor if you want to do this. Repossessed properties You'll sometimes find that a property has been put up for sale by a mortgage lender, such as a bank or building society, which has repossessed it. Repossessed property belongs to the lender (known as the mortgagee). When choosing a buyer for the property, the mortgagee has a legal obligation to get the best possible price, but may also take into account how quickly you can raise funds and exchange contracts. If the mortgagee accepts your offer for a repossessed property, a procedure known as 'the notice of offer' sometimes follows. This may delay things. Details of the property and your offer are advertised in the local press such as the Yorkshire Evening Post. The mortgagee asks for offers from other prospective buyers to be made by a set date, usually by sealed bids. If one of these offers is accepted instead of yours, the whole process may start again until the highest possible price has been reached Information kindly supplied by the Office of Fair Trading. |
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