What am I checking for in a sales agreement?

If you’re at the point of choosing which estate agents should sell your home, this is a good time to understand what to look out for when you read the sales agreement. It’s a ‘reading the small print’ blog. 

In no particular order, here are 6 things to look out for…

Tie-in period

The tie-in or lock-in period varies dramatically across agents. We've even seen 26 week contracts on some local sole agency sales agreements. That means however unhappy you are with their service or results, you can't change to a different agent for 6 months! Anything more than 12 weeks is excessive. The shorter the period, the better. You should also check for a notice period. 

Price reductions

Be mindful that if you end up reducing your selling price, particularly on longer tie-in periods, that the contract term doesn't reset back to the start or that you’re not paying the commission based on the marketing price. E.g. it was marketed for £470,000 and sold for £467,000 – you should pay commission on the price achieved of £467,000.

Sole or multi-agency

This should be really clear in the agreement whether you’re going with one agent or are going on the market with several. You may have to pay two commissions if you have already appointed another estate agent to sell your property or if you appoint one during the period of a sole agency agreement.

Energy Performance Certificate

You will need to supply an up to date EPC when selling. Some agencies will organise this for you. There is a cost for this.

Cancellation of Contract Regulations

You should be able to cancel an agreement by giving notice within 14 days of signing it. This usually has to be done in writing. Most agents won’t start work until the end of that 14 days UNLESS you confirm you want them to. You will still have a right to cancel the agreement within the 14 day period, but they’re likely to charge you an administration fee.

Fees

Some agents quote a commission percentage instead a set fee. There may be a minimum charge for percentages written in the small print so do check for that. It’s worth pointing out that the cheapest agent rarely means best agent. The ones charging higher fees tend to do more than the bare minimum – particularly noticeable with their marketing, such as employing staff to look after the important sales progression side. They’ll traditionally have more buyers to choose from, sell a home quicker and achieve a higher selling price.

Let’s compare…

Agent 1
Markets your home at £470,000. Agrees a sale at £467,000. You’ll only pay them 1%. £4,670. 

Agent 2
Markets your home at £470,000. Agrees a sale at £474,000. You’ll pay them 2%. £9,480. 

Excluding VAT in this comparison, with agent 1, you’re left with £462,330. With agent 2, you’re left with £464,520. Despite paying a higher fee, you’d be over £2,000 better off in your pocket going with the second agent. Imagine a bigger difference between the sale agreed prices!

If you want our opinion on what your home in Watford, Bushey, Hemel Hempstead or surrounding areas is worth, book your market appraisal.