Sole or multiple agency?
Which agency deal to go for? Sole, multiple .. or some of the other types?
Sole agency
The most straightforward selling arrangement you can make is to find an estate agent you like and instruct him to sell the property. He will quote you a fee between 1% and 3% of the sale price (plus VAT). The estate agent will be concerned that you might let a competitor also start selling the property. So he may offer you a "Sole agency" deal. This means that you cannot instruct any other estate agent for a period of time. You may think there is not much value to you in giving that commitment -- it just allows the agent to sit back without having to look over his shoulder. But there are serious benefits. The first benefit is that the agent should offer you a much better price. He may reduce his normal fee considerably -- in fact, you shouldn't do it unless he does. If the agent has a sole agency, then he will put his efforts into finding a buyer for you, because he is now guaranteed a fee if he does.
Usually the best arrangement is to interview a number of estate agents, choose the one who seems best, and instruct him on a sole agency basis. But impose a realistic time limit. The sole agency should not continue for more than, say, eight weeks, which is usually long enough to find a buyer. Remember that if you sign a contract giving an agent a sole agency then, if you appoint another agent as well, you still have to pay the full agency fee to the first agent -- even though he didn't sell the property -- and you have to pay whatever you agreed as a fee to the new agent who did sell the property. So if you agree to a sole agency deal, you must always put a time limit on it. Sometimes, the contract requires that you give notice to the agent in writing to end the sole agency. If so, make sure this is a realistically short period, like 7 days, and make sure you do give the written notice and get it receipted as proof.
Joint sole agency
A variant on the sole agency theme is to appoint two firms as joint sole agents. That means that it doesn't matter which of the two firms actually sells the property, they split the fee between them. The only reason to do this is if you want to instruct one specialist agent and one local agent, For example, if you are selling a mews house, you might want to instruct a firm of agents who specialise in mews houses all over the country, and also a house agent in the local area. That way, you are not duplicating their efforts, but taking advantage of two potential pools of buyers. Not all estate agents are prepared to work on this basis.
Multiple agency
It's a multiple agency if you appoint several agents to work independently, or if you appoint just one agent but without giving a sole agency commitment (in other words you keep the right to appoint a second agent tomorrow). Each agent will charge you a higher fee, because it's a bit of a lottery for them. The ultimate buyer of your property is probably going to be someone who is contacting all the agents in the area for properties on their books, and it's just luck which of the firms you have instructed gets phoned first. Multiple agency isn't really a very good idea. You are not doubling the pool of buyers every time you double the number of agents appointed, because the same buyers will be approaching all the local agents. In fact, you are just demotivating the agents, because they are going to put much more effort into selling properties where they are guaranteed to get a fee, than one where they've only got a one in three or less chance of winning. And you pay the eventual winner a higher percentage fee. If you are dissatisfied with the single agent you appoint, the better option is to find a new sole agent, not to just adopt the scattergun approach of appointing lots of agents.
Sole selling rights
You should always scrutinise the estate agents’ terms of business closely. Don't assume that just because they come in a printed format that they are either fair or unchangeable. Some estate agents put in their terms that you are giving them "sole selling rights". That is very different from sole agency. Sole selling rights means that even if you find a buyer yourself, because someone knocks on your door or sees your advert on the Internet, the estate agents still gets a fee when you exchange contracts. An estate agent may argue -- with some reason -- that he is putting a lot of effort into trying to sell the property and you should not be trying to advertise it behind his back, and also that it is not really likely that someone will just knock on your door on the off chance you are thinking of selling. It's much more likely that someone who has actually got the details from his website or from the 'for sale' sign outside. Unscrupulous sellers do sometimes try to evade paying agents fees by pretending to find a private buyer. And potential buyers often bypass the estate agent having got details off his site, and offer to split the saved commission with the seller. So I am not actually against sole selling rights as long as they are limited, like a sole agency, to a fixed period.
A “ready wiling and able” buyer
Another term you sometimes see is that you must pay the estate agents a fee if they produce a "ready willing and able buyer". This means that the estate agent will get his fee by producing a buyer who can purchase the property and makes an offer at the price you have set for the property. Then if you pull out, you still have to pay the fee. (Normally, a fee is only payable if exchange contracts takes place.) Most people frown on this type of contract but I have to say that it seems fair to me. If the agent does his job and gets you a buyer, why should he lose his fee because you change your mind and don't sell the property? Of course, it could work out unfairly for you if the reason why you do not proceed is because your chain of transactions fall through, or because the seller withdraws on your purchase, for example. So it is in your interests to negotiate to have such a provision removed from the agency terms, or make sure it does not apply if you cannot go through with the sale because of problems on your own purchase. Make sure your solicitor approves the contract terms before you agree to them.
Selling issues
Checking on progress
You should make sure your estate agent will be keeping a note of people who ask about your property and people who view it, so you have some idea of how successful their marketing campaign is being in producing potential buyers. If people don’t view the property or you don’t get offers the property may be overpriced. Hearing viewers' comments is also helpful in identifying problems which you might be able to do something about for future viewings.
Have a “for sale” board
Some people don't like to have a "for sale" board outside their home for some reason, but it really is one of the best ways of marketing your property. People looking for a property generally choose a particular area before looking for a property, and they often drive around the area at the weekend looking to see what is available, and they work out which agents to approach by seeing who has for sale boards in the area. So a board outside your house is the most targeted kind of marketing possible. Local councils usually have a say as to whether boards can be put up in their area, and in some areas they are not permitted.
