How to sell a houseUnfair contracts

You need to be extremely careful of the contractual terms offered by estate agents when selling your home. We've found many instances of unfair terms which can end up costing you extra money.

You should be very clear about the arrangement you're entering into, so if you don't understand the contract, don't sign it.

Contract terms

‘Sole selling’

If you don't understand the contract, don't sign!

This means the estate agent is the only agent with the right to sell your home during the terms of the contract. They're entitled to payment even if you find a buyer yourself perhaps on the internet, at auction or part exchange with a new build developer. We recommend you don't sign a contract with a sole selling rights.

‘Sole agency’

Sole agency is the most common estate agent contract. This is the same as ‘sole selling’ with the exception that if you find a buyer yourself, you don’t have to pay the agent. However, because sole agency contracts are open-ended, an agent can still claim commission if they introduced a buyer even if their offer is made months (or potentially years) after the estate agent stopped marketing your property.

This is called an overhanging liability to commission and can mean you end up paying commission to two estate agents for just one home sale.

‘Multi agency’

This means several estate agents act for you but only the agent that sells your home is entitled to receive a commission. The commission rate is usually higher for a multi-agency contract. Given that most estate agents will advertise your house on the internet, this contract term is now less common.

‘Ready, willing and able purchaser’

If this clause is in your contract, don’t sign it. It means you’ll still have to pay the agent for finding a buyer even if your situation changes and you have to withdraw from the sale.

Terms of payment

Choose an agency which allows a few days for monies to transfer before charging interest. Make sure payment is required to the agency when the sale is completed rather than when contracts are exchanged. Never hand the authority to pay the agent over to anyone else because if you have a complaint about the service provided, you won’t have the power to withhold payment.

Tie-in period

Avoid anything over eight weeks and remember to factor in the notice period, which is often two weeks. You can’t usually give notice until a minimum contract period is over. Be aware of how long this will lock you into the contract.