Estate agents arrange the sale of property. They advise on price, negotiate between sellers and buyers and handle advertising.
Many offer additional services such as arranging mortgages, surveys and conveyancing.
Usually, estate agents work for sellers. Sellers are the clients. They pay the fees and the agent puts their interests first. But agents must treat buyers fairly. If a buyer pays an estate agent to find a house, the buyer is the client. An agent may not accept commission from both the seller and the buyer in the same transaction.
Using an estate agent can be a complicated business, so it makes sense to know your rights, the pitfalls and how to get problems sorted out.
In Scotland, both estate agents and solicitors help potential buyers find property and negotiate the sale.
Remember that estate agents may be in a position to benefit personally from the sale of a property. You must be told promptly, and in writing, if your estate agent, or a relative or business partner of the estate agent, owns the property you want to buy.
You can sell property yourself, but most people use an estate agent.
You should shop around for an agent. Choose an agent who sells your type of property and offers a contract that suits you.
When you use an estate agent to help you sell a property, you have to sign a legally binding contract.
Before signing, read the contract carefully and make sure you understand it. Find out whether you have the right to cancel the contract. Check how long it will run. It should allow a reasonable length of time to market your property and find potential buyers. Beware of contracts that tie you to an estate agent for a very long time.
If you are unsure, get advice from a solicitor.
You may come across some unfamiliar terms in a contract. Make sure you understand what you are agreeing to. The terms 'sole agency', 'sole selling rights' and 'ready, willing and able purchaser' must be explained in writing if they are used in a contract.
The estate agent is the only agent with the right to sell your property. If you find a buyer yourself, you don't have to pay the estate agent's commission although you may still have to pay for advertising or a 'For Sale' board.
The estate agent is the only person with the right to sell your property. It is different from sole agency: if you find a buyer yourself, you still have to pay the estate agent.
A few estate agents offer a 'joint sole agency' contract where two agents agree to share one commission, although the total fee may be higher.
If you appoint more than one estate agent to sell your property under a sole agency or a sole selling rights contract, each agent has the right to claim their fee when the property is sold.
Before you sign a contract, the estate agent must give you written details of how much you will be charged and when payments will be due.
The agent must state the exact amount you will be charged or, if this is not possible, the way the cost will be worked out and an estimate of the final amount.
You pay a percentage of the selling price of your property as a commission.
Some estate agents charge a low percentage plus an additional charge for advertising and 'For Sale' boards. In that case, the estate agent should tell you exactly how much the additional charge will be. If this isn't possible, you should be given an estimate of the charge and a breakdown of how it will be worked out.
Other agents charge a higher percentage of the selling price but this includes all costs.
Occasionally, an estate agent may charge a fixed fee rather than a percentage.
It should be clear from the estate agent's terms and conditions when you will have to pay. Fees are usually due on conclusion of missives.
Under a ready, willing and able purchaser contract , you have to pay as soon as a buyer who is prepared and able to exchange unconditional missives is found. This applies even if you withdraw your property before the sale is completed. The estate agent may also charge you for 'For Sale' boards and advertising.
If you change from one agent to another, there may be a period when both agents' commissions are due if your property is sold.
Since 2007 in Scotland all properties marketed For Sale are required to have a Home Report carried out on the property. Your estate agent will be able to advise and normally arrange this on your behalf, however, you may decide to organise this yourself, prior to contacting an agent.
Prices for Home Reports can vary from surveyor to surveyor and are dependant usually on the value of the property. However, it is also important to choose a well known local surveyor who is recognised by lenders and is on their panel of surveyors. Otherwise, your potential purchaser may not be able to use the report for mortgage purposes which can cause unnecessary delays and problems when you have received an offer.
The estate agent (or agents) you have chosen will visit your home to take details such as the number and size of rooms. This helps the agent prepare a description of the property (known as property particulars) before advertising it.
There are strict rules covering the way property can be described. It is against the law for an estate agent to make false or misleading statements in the property particulars.
Estate agents also provide services to buyers. They may organise surveys and valuations or arrange mortgages or life insurance. This is common when an estate agency is part of, or linked to, a financial institution such as a bank or a building society.
If an estate agent intends to offer services to the buyer and will receive a commission or an introduction fee, the agent must give you written details. If the buyer decides to take up the offer, you must also be told in writing. This applies even if the agent offers services through someone else.
You would normally ask the estate agent to pass on, in writing, offers over a set price. This is an indication of the lowest offer you would be prepared to accept. If several potential buyers are interested in your property, the agent will fix a 'closing date', specifying the latest day and time offers can be received. This should be set far enough ahead for potential buyers to arrange a valuation or survey and a mortgage if necessary.
Sellers usually accept the highest offer. But you don't have to do this. For example, you may think some of the potential buyer's terms are unacceptable.
If the property is offered at a fixed price, the first offer to be received is normally accepted.
If you have a ready, willing and able purchaser contract and an offer for the price you set has been received from someone prepared and able to buy your property, the estate agent can claim commission even if you don't accept the offer.
Once you accept an offer, you then instruct your legal adviser to send a formal qualified acceptance to the buyer's legal adviser. (A legal adviser can be a solicitor or an independent qualified conveyancer). Your qualified acceptance will say which terms in the offer you accept and which you do not.
There will be an exchange of missives, negotiating the terms of the offer and acceptance. During this time, both you and the buyer can pull out of the deal. But once an agreement has been made and the missives have been concluded, the contract is binding.
If you have a ready, willing and able purchaser contract, you may have to pay the agent if you withdraw before an agreement is reached. It depends on what happens during negotiations.