Whether you are buying or selling property for the first time or have done it before, estate agent contracts can be complex, time consuming and costly. As such, it is important that you know what the contract entails before signing.
Moreover, keep in mind that estate agents are out to win business thus, do not be afraid of challenging what you do not like and do not pay more attention to what you do not need.
- No mention of VAT and Just a % rate
Most of the estate agents will only have a percentage of the commission that they will charge. Although this may seem quite appealing, refrain from accepting it on the face value. Thus, you will do well to work out the amount so that you have an actual figure.
This way the final bill will not take you by surprise. You should also remember to include VAT as most agents do not include it upfront.
Negotiating on the percentage is also advisable as the agent is interested in your business hence they may be a little flexible. Keep in mind that while lowering the percentage may see trivial it can make a big difference that will save you a few thousand pounds.
In addition, you may also want to review the amount of commission that you will give to the estate agents depending on how good they are at the job you give them. Giving them an incentive will push them to do the best they can and may even lead to them finding a buyer to sell your house quickly cash price.
You can do this by offering 1% if they attain the asking price or 1.25% when they attain a price that is above the asking price. This technique is particularly great when you want to push for a quicker sale.
- Tie-in Periods
It is common for estate agents to include tie-in periods in their contracts. Consequently, if you are unhappy with their service or end up not getting on with them and want to terminate the contract, you may be forced to deal with the consequences.
Thus, ensure that your contract offers flexibility in terms of termination such that you do not incur a penalty thereby allowing you to cut links with the agent. In particular, you must pay attention to the sole agency lock-in period that tends to vary dramatically from one agent to the next. Generally, this should be between 4 and 12 weeks. Hence any period longer than that us unnecessary.
- Hidden Fees
It is important to check the contract to ensure that there are no extra fees such as marketing, which is usually included in the commission fees, or even penalties that are related to ending the contract early. Should you notice them in the contract, negotiate with the agent to have them removed. Any other additional charges must then be agree upon in writing in advance before you are charged.
While estate agents are supposed to make the process of selling or purchasing property easy, they sometimes apply tricks that are unacceptable when getting you to give them business. Therefore, you will do well to take time to review the contract before signing it.