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Selling your Home: Estate Agent Contract

Selling your Home: Estate Agent Contract
19 September 2017

In this article we look at some of the legal terms you can expect to see in an estate agent contract. If you are a home owner getting ready to sell your house using an estate agent, this article is for you.

Estate agent agreement - a legal contract

Whether you use a traditional high street estate agent or an online property agency, you will be entering into a legal contract with the agent. In fact, you are required by law to have a written agreement when using an estate agent to sell your home.

The contract between you and the estate agent will be regulated by law and also by the terms and conditions set out in the estate agent contract you sign.

Estate agents are required, by law, to:

  • treat buyers fairly
  • show all offers to the seller promptly
  • pass on any and all offers right up until exchange of contracts
  • belong to one of the official schemes to deal with complaints.

Estate agent fees

The fees an estate agent charges must be clearly set out in the estate agent terms and conditions. The fees charge will depending, partly, on what type or sales arrangement you agree with the agency. Commission rates for sole selling or sole agency are usually the lowest, typically 1 - 2% of the selling price. Multi-agency fees can be in the range 2 - 3.5%. You may be able to negotiate the commission rate with the estate agent.

In some cases, the estate agent may offer a fixed-fee deal. The fee is a likely to be expressed as a fixed percentage of the asking price. If the house sells for over the asking price you might get a good deal. Of course, if it sells for under the asking price you may end up paying more in fees than if you had been paying a percentage of the selling price.

These are the types of selling arrangements generally available:

Sole selling

The estate agent is the only agent allowed to sell your property. If you find a buyer yourself, during the term of the contract, you still have to pay the estate agent fees.

Sole agency

The estate agent is the only agency allowed to sell your property but if you find the buyer you don't have to pay the estate agent fees.


You choose to market your property through more than one estate agency. The estate agent that sells your property is the one who earns the sales commission.

Clauses in an estate agent contract

The layout and wording may differ from contract to contract, but these are the types of things you should see included in the terms and conditions of an estate agent contract:

  • Parties to the contract - the names and addresses of the seller, the estate agent and the property being sold
  • Full details of the services the estate agency will provide e.g. managing keys, managing viewings, marketing effort
  • For Sale boards - in most cases the estate agent will want to post 'for sale' signs and the contract will include a clauses saying that the seller agrees
  • Price and payment - as well as details of the amount of fees you can expect to see details of how and when to pay, details of any late fees, what expenses you may have to pay, situations under which the estate agent can vary their fees. The estate agent contract should set out commission fees clearly advertising costs, along with an indication of whether or not the charges include VAT.
  • Client obligations - the things you are required to do such as supply a set of keys, give the agent access to the property to prepare marketing material, produce or pay for production of an Energy Performance Certificate (and Home Report in Scotland)
  • Agent obligations - many of the agent's obligations will set out how they comply with the law such as being a member of an official redress scheme, keeping appropriate records and forwarding offers. There will probably also be a promise to perform their duties with reasonable care and duty.
  • Property misdescription - estate agents are required, by law to describe properties accurately and not in a misleading fashion. Estate agent contract may well include a clause obliging the client to check any descriptions and notify them of any errors.
  • Duration of the agreement - the contract must specify a start date and how/when the agreement will end (terminate). Some agency appointments will be set up to run until terminated, meaning that either the agent or client have to give a certain amount of notice. Other contracts maybe for a specific period of time e.g. you may enter into a sole agency agreement for 6 weeks when the property first goes on the market.

Signing a legal agreement

Once you have signed a contract with your chose estate agent, you have entered into a legally binding agreement. Be sure you understand what the estate agent contract says before you sign it. Ask your estate agent things you are unclear about or for an explanation of any clauses in the contract you don't understand.

Your estate agent should give you a copy of the agreement. Keep it in a safe place. Should a dispute ever arise the written estate agent contract is a record of what was agreed between you and the agency. If a problem arises that you can't resolve by discussing with the estate agent, then you have the legal right to take your complaint to The Property Ombudsman or Ombudsman Services: Property (depending which body the estate agent has signed up to).

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