The new breed of commission agreements could not only bleed you dry but tie you to your Estate Agent for years and years.
More and more sellers are signing increasingly restrictive selling contracts without questioning their content. Its an unfortunate consequence of the lack of attention paid to the wording that many home owners only really get to read it properly when its too late. Its too late to find you cannot sack the poorly performing agent after 4 weeks have gone by with no viewing activity, your agent isn’t returning your calls and you are about to lose the house you were hoping to buy. You certainly wont be able to instruct another agent easily without a potential liability remaining to the original one. Its all avoidable if we deal with the initial contract negotiation professionally, however personal it may feel.
Its fair to say that some sellers do knowingly set out to avoid paying agents what they deserve to be paid. Agents are constantly revising and updating their contracts to try to close off all the loop holes that their customer base might appear to resort to avoid paying what they feel they are owed. A symptom of this agent paranoia might be the relatively new and nasty ‘Sole selling rights’ contract which some national chains are deploying as a ‘nuclear option’ to replace the old less restrictive ‘Sole agency’. The latter only really entitled the agent to a fee if they introduced a buyer. A Sole Selling rights contract let them claim a fee in many more circumstances. Here are some of the extra fee claiming opportunities and scenarios that can sneak in to these contracts: –
- if you introduce a buyer yourself – You pay full fee.
- if someone else introduces a buyer including another agent – You pay full fee.
- If in the agency contract period, the agent sends out particulars to someone who happens to buy the property after the contract period ends. You pay full fee.
- if you agree a sale and change your mind about selling before exchange of contracts and withdraw from an agreed sale. You pay half of full fee.
- If you rent the property to anyone who rents during or after the end of the agency contract period. You pay 10% of annual rent.
- If your tenant, becomes a buyer. You pay full sale fee less rental commission already paid to the agent in 5 above.
Let’s be fair most agents are unlikely to invoke these clauses even where it would be legally possible but morally wrong e.g. client withdrawing from an agreed sale because of family bereavement. However if you are contemplating signing a contract you are not sure about why not ask the agent to explain it step by step first. Alternatively give me a call. Incidentally – if you are aware of existing interest in your property or if you feel you may not go through with a sale – don’t be frightened to ask the agent to exclude these scenarios. If you are still unhappy – find another agent!