It’s a must know, the Types of Estate Agency. Why? Because you need to know what agreement you are entering into when you instruct an estate agent. Luckily, I’ve got it summarised here for you:
The Agent instructed is the only Agent whom has the right to sell the property. If the Seller finds a buyer the Agent is not entitled to any commission (although the Seller will have to pay any expenses incurred by the Agent). Where the Seller breaks the agreement i.e. instructs another Agent, he may be liable for two sets of fees.
Joint Sole Agents
Where more than one Agent is appointed by the Seller with the instruction to work together. The commission fee would be shared between Agents.
The Seller can instruct a number of Agents, however the Agent that introduces the Buyer will be entitled to the commission. Often for this agency type the commission will be higher. The big problem is that each agent works independently, as they are in competition, which could cause problems with the sale if not controlled.
Sole Selling Rights
Here the Agent is the only person with a right to sell the property. If the Seller finds his own buyer he will still be liable to pay the commission. So the Agent must make the Seller aware that this is the type of deal they are entering into.
Ready, Willing and Able Purchaser Agreement
Here the Seller pays the Agent commission if the Agent finds a buyer whom is ready to buy the property and exchange unconditional contracts.
No Signed Agreement
Here the Seller uses his preferred Agent with no agreement in place. The reason for this is that the Agent presumes that if the Seller is happy with the service he will not look to use another Agent. Usually the Agent will provide the Seller with a ‘one liner’ explaining terms of service, but that’s it!
Hopefully this has given you a bit more information and let’s you know that there isn’t just one type of estate agency. Obviously all come with pros and cons and it’s up to you to weigh it up. Definitely speak to all agents you may want involved. Get their terms of engagement and really carefully analyse your options.
So, what’s your preferred method of agency? Let me know in the comments section below. And as always share this around to make sure that anyone that needs it, gets it.
P.S Did you check out the Process of Buying and Selling Property yet? Its a brilliant infographic which you definitely need in your property life!