Estate Agency Agreements Explained
December, 2017

The property market is daunting and before you even begin to understand legal fees and the viewing process, you have to get your head around the different types of estate agency agreements. What is the best option for you and who can you really trust with such a big job?

We’ve done the hard bit for you and explored all of the options, looking at the pros and cons of the 3 types of agreements available in the UK.

Sole agency

This type of agreement means that the estate agent in the contract is the only one allowed to sell your home and they will get all of the commission. Under a sole agency agreement if you find your own buyer, you do not have to pay anything to the estate agent. However, the agent may be able to claim commission if the contract is open-ended. In today's world, many estate agents are now opting for sole selling rights contracts due to the increased marketing via social media.

Benefits of a sole agent

• If you use multiple agents, you will have to pay multiple fees so using a sole agent will save you money
• Some agents advertise in similar online locations so you can get similar advertising exposure with a sole agent
• With modern marketing methods taking over, social media means that many people opt for a sole selling rights contract and are very happy with the outcome

Cons of a sole agent

• If you agree to sell your property through one agent you cannot market it with any other agent during the term of that agreement, which can be annoying if your property is not selling

Joint sole agency

A joint sole agent is when two agents agree to market your property together and split the commission. This agreement is often the best option if for example, you want a national agent who focuses on expensive, luxury properties and an agent who is local in your area. Generally, it isn’t advised to enter a joint sole agreement with two local agents, as they will cover the same market.

Benefits of joint sole agreements

• With two specialist agents, you will cover a larger market area

Cons of joint sole agreements

• Joint sole agreements usually involve higher fees
• If you sell the house through a third agent, you are then in breach of the contract and will still have to pay the joint sole agency fees

Multi-agency

A multi-agency means that you can use as many agents as you like, only paying commission to the specific estate agent who sells your property. It is widely believed that using multiple agents is the quick-sell option. Going with a multi-agency agreement can also look quite desperate to the outside world as the property will be listed multiple times by each of the different agencies on websites such as Rightmove.

Benefits of a multi-agency agreement

• The more agents you have working for you, the more potential buyers it will reach but this also has its downfalls

Cons of a multi-agency agreement

• Only the agency who makes the sale gets the commission so they are competing which can make the sales process quite frantic
• It can look like a desperate approach
• With several pushy, rival agents, the viewing process can be more intrusive
• With this type of agreement, fees will often be higher

Overall, the type of agreement is down to you, your property and the state of the market. It is a big decision so take your time and choose wisely. If you would like to speak to one of our experts, get in touch today.