Buying or selling a home normally takes 2 to 3 months. The process can take longer.
If you sell your own house, you will save a substantial sum (the typical estate agent’s fee is between 1.5 and 2 per cent, which pays 2,250-3000 pounds on a 150,000 pounds property) The drawback is the time and work that you will have to put in yourself.
If you try but fail to sell your house, you won’t save anything, but you still lose the time and the opportunity to move.
What does an estate agent do ?
A good estate agent will visit your property and suggest three possible prices (which includes other advice on what to ask them at this stage.) Once you have chosen an agent and the price you want to put it on the market for, agent should:
Send you a contract setting out their terms and conditions. Read this before you sign.
Measure and photograph the property to produce the sales particulars, checking them through with you.
Help you to secure and Energy Performance Certificate. You don’t have to use the agent to provide this service and they should charge around 50 pounds for the certificate.
Put a ‘For sale’ board outside your property (assuming you want one; your estate agent should give you the option).
Advertise your property locally, on the internet and via newspapers. It’s important to negotiate this as it doesn’t always happen automatically.
Advertise it at their premises and via their website as well as directly to a list of potential buyers.
Arrange viewings for legitimate buyers (show people around your house if you aren’t there).
Receive offers, communicating them to you in writing and negotiating on your behalf.
Liaise between your buyer, you and your solicitor.
Arrange the handover of key on completion day. You could do most of this yourself. However, there are various benefits a good agent brings.
In any field, experience is valued. Someone who has spent years helping people buy and sell property should be able to forestall problems, keep the process moving efficiently and effectively, and offer informed advice when decisions are required.
Sales and marketing
Selling is a skill. No one is going to persuade an unwilling buyer to purchase your property, but a professional sales person will be able to communicate effectively, pointing out advantages and answering queries that might otherwise have put someone off. In addition, a good agent will have the resources to market your property nationally via their website.
Inviting strangers into your home carries a risk. You don’t know who they are and you can’t vet them, but you could find yourself alone with them in your home. An agent who accompanies viewers means that you won’t be put in a vulnerable position.
You can never be sure if a viewer is genuinely interested in your property, and some people seem to make a hobby of looking around houses when they have no intention of buying. A good agent will check if the buyer is serious and ask if they have a Mortgage Agreement in Principle. If they haven’t arranged a loan (which means there’s no guarantee they can afford to buy), the agent can set this in motion.
Any decent agent will have someone available to talk to potential buyers. You might not be able to do this.
Get the best agent
When choosing an agent, read the advice your local property market and only choose agents that you have checked are current members of one of two redress schemes. These are the Property Ombudsman and the Ombudsman Services:
This should give you an idea of which agents are not just marketing properties like yours, but selling them. In a high street with six agents, only two or three may be right for you, so always research by asking locals for recommendations. Also look at who is advertising properties like yours in the local paper and possibly on the internet. Estate agents tend to specialise. There is not point asking one who usually sells large houses with land to market a small flat.
A common mistake when choosing an agent is the ‘board count’ method where potential sellers count how many boards (for sale and sold) and choose the agent with the most. However, there are some agents that offer high valuations to increase their market share, so they have the most boards. The only boards you should count should be the ‘sold’ boards as this gives a truer indication of success.
Just as the location of your house is important, so is the site of your estate agent. Your agent should be based in a town as near as possible to your property, and already be dealing properties in your area. If your property is located between two towns, see which one has more agents who work in your area. If the split is equal, you may be better off using two agents because between them they will market your property more widely.
Check out where the agent’s offices are. An upmarket location near a stylish clothes shop in the high street will attract different buyers to the one at the end of the street next to a scruffy pub of discount shop.
Get a valuation
Any decent estate agent will be willing to visit your house to make a free valuation. Invite three who have passed your initial checks described above to do this, asking them to bring details of any similar properties on the market or which they have sold in the last six months.
Go around the property with them, inviting comments on any factors that will be attractive or not to potential buyers. This may help you see your property with fresh eyes, seeing the good points and spotting flaws, such as damaged doors, cracked plaster or peeing paper.
Agents are not surveyors and will not be looking for, or be trained to identify, any structural faults in the property. Discuss with the agent whether you should do the following.
Have major repairs made before putting the house on the market. Get estimates in from builders so that you are equipped to negotiate from an informed standpoint. A good estimate agent will suggest that you consider the three possible prices listed opposite.
An asking price
A fair price if you cannot achieve the asking price. A lower price likely to sell the property within two to six weeks. Ask them their reasons for choosing each price. They may mention minor repairs like cracked window panes that you can easily fix and which have a big impact on the feel of a place. They will also know how many people are looking for properties of this type, and that will certainly affect the asking price. Ask them how many properties they have had on the market in the last 12 weeks and how many of those have actually sold.
Going through this process with three agents will give you a good idea of the likely asking and final selling price. If the price range differs by more than 5 per cent, talk to a couple more agents.
Making your decision
Ask three estate agents to value your property and ask them their reasons for the price they attach to it.
Since October 2008, two redress schemes have been formed and estate agents must belong to one of these schemes. The two schemes are the Property Ombudsman and the Ombudsman Services: Property. Members of these schemes must keep an accurate written record of their client interaction for six years. If you have a complaint to make, this makes it easier for you to resolve as there is an independent third party that will handle your complaint – for free!
Both schemes require agents to follow a code of conduct. If an agent fails to do this and then doesn’t handle your complaint to your satisfaction, you can refer them to one of the ombudsman schemes.
The code of conduct covers areas that can cause problems between agents, buyers and sellers. These include the need to fairly represent the value of your property, to provide clear contracts and to give a full explanation of agent fees prior to you instructing an agent to act on your behalf. For example, agents should make it clear to you that if you dis-instruct them and then go on to sell to a buyer they introduced within six months, you may nevertheless be liable for their fee.
According to the Property Ombudsman, most of the issues that now arise between agents and buyers or sellers are communication problems, so it is essential to ensure that you take time to read an agent’s terms and conditions before you sign and ask for key costs in writing. If you are not happy with anything during your sale or purchase, put your complaint or query in writing so there is a record that can be forwarded to one of the ombudsman schemes should you need to involve a third party.
You can avoid many potential problems by reading the estate agent’s contract, making sure you understand it and re-negotiating anything you don’t like before you sign it.
Many disputes between sellers and agents stem from misunderstanding the contract. If you don’t understand the contract, don’t sign: you may be better off with a different agent. Always read the contract carefully and look for the following terms.
Sole, joint or multiple agency
A ‘sole selling agent’ will have the exclusive right to sell your property and will be paid, even if you find a buyer yourself. However, it is important to negotiate this beforehand in writing and check the terms as not every agent will do this.
A ‘sole agency’ is still the only agent, but they don’t get paid if you find a buyer.
Both of these will cost less than joint (two) or multiple agents, who will charge a higher commission rate to compensate for the fact that only one of them will get paid. Make sure the contract clearly states that you won’t be charged commission if the sole agency contract has ended.
Estate agents charge a percentage, plus VAT, of the final selling price. Rates vary, but are typically 1.75 per cent for sole property, and 2-3.5 per cent for multiple or joint arrangements.
These rates are negotiable, but remember the agent has been through this process more times than you have. It is worth asking the estate agent how much in real terms the fee could be, this will help you to draw up a budget.
Ready, willing and able purchaser
If the contract contains a term stating ‘ready, willing and able purchaser’, walk away – don’t sign any contract with it. It will mean that you’ll still have to pay the estate agent for finding you a buyer even if your situation changes and you have to withdraw from the sale.
Choose an agent that gives you a few days for the money to transfer before charging interest. And make sure it requires payment when the sale is completed rather than when contracts are exchanged. Do not hand over the authority to pay the estate agent to anyone else (known as irrevocable authority – you should avoid this). If you have a complaint about the service provided, you won’t have the power to withhold payment.
Avoid lengthy tie-in periods of anything over eight weeks. And remember to factor in the notice period, which is often two weeks – you can’t usually give notice until the minimum contract period is over.
Check what happens when the contract ends. Some agents operate a ‘six-month rule’ whereby you have to pay them if a buyer they introduced buys your home within six months of a contract ending. But some agents go further and state that you have to pay this, no matter how long it is after the termination of a contract.
Your rights when dealing with an estate agent
It’s your legal right that estate agents must do the following:
Pass on all offers on a property. There have been cases where offers have not been passed on to the vendor simply because a person making a lower offer has not agreed to use the estate agent’s mortgage services.
Pass on offers promptly in writing. They shouldn’t just telephone you to inform you of a offer.
Use clear contract terms. Reveal to you any financial interest that they have in offers made on your property. For example, they are not allowed to collude with property developers so that they only offers they pass on to you are those that suit their interests.
If you suspect that a property agent has acted in breach of these regulations, you should contact the local authority trading standards department together with the redress scheme they are a member of and professional association, if they are a member.
By I. Donaldson,
Christ & Co.