Estate Agents

INTRODUCTION

Estate Agents are instructed by and act on behalf of the Seller of a property. The work of estate agents is regulated and makes sure that estate agents act in the best interests of their clients (the sellers) but that the buyers as well are treated honestly and fairly.

PROPERTY PARTICULARS

As part of the process of dealing with the sale of a property estate agents usually prepare particulars of the property. An estate agent owes a duty of care to the seller in carrying out his duties. However an estate agent does not owe the same responsibilities to the purchaser. Indeed there is usually a disclaimer in most property particulars that states that the estate agent takes no responsibility for the description of the property, which is for guidance only. It is therefore the purchaser who must satisfy himself of the accuracy of any particulars provided.

However, an estate agent is liable to be prosecuted if he or she misdescribes a property or makes a misleading statement in the course of an estate agency business.

NEGOTIATIONS

Estate agents are obliged to pass on to the seller all offers made in respect of the property unless they are below any minimum price that the seller has previously stipulated.

ESTATE AGENTS FEES

Almost all estate agents work on a "No Sale No Fee" basis. The Estate Agents Act requires estate agents to provide written details of their fees, any other money the customer has to pay and the circumstances in which the money becomes payable. Failure to do so will give a customer a limited defence to a claim for unpaid fees unless the court considers it reasonable to allow the agent to recover his unpaid commission.

Many agents stipulate in their terms and conditions of business that they will be entitled to collect commission on a sale to a buyer whom they introduced even if the transaction takes place after the agency has been terminated. The fees are, of course, paid by the seller, not the purchaser. Fees are based on a commission of anything between 1% and 3% plus VAT of the sale price. There are three main methods of instructing estate agents.

SOLE AGENCY

This means the estate agent is the sole agent for the property. Usually the agreement is for a fixed period of up to 12 weeks. With this arrangement estate agents will charge lower fees perhaps 1% of the sale price. However from the sellers point of view the property is only being advertised by one firm of agents.

MULTIPLE AGENCY

This is where the seller can instruct any number of estate agents to try to sell the property. The agents will charge higher fees if they sell the property perhaps 3% of the sale price. However the seller at least knows that a number of estate agents are competing in trying to sell the property.

SOLE SELLING RIGHTS

Sellers should never agree to this arrangement. This means that the estate agent alone can sell the property and can claim commission even if the seller sells privately to a friend.

FINANCIAL SERVICES

Almost every estate agent provides financial services usually in the form of arranging mortgages for buyers. Such arrangements should be totally separate and unrelated to whatever agreement may have been reached between the buyer and seller. We recommend that if anybody requires financial services that they seek the advice of an Independent Financial Advisor.