Selling your property can be a complex process. This can be made even more stressful when you sign a contract with an estate agent. You may have been asked to enter into a sole agency agreement with your chosen agent. But what does this mean, and what are the advantages and disadvantages of this type of contract? We explain all in our below guide.
What is a Sole Agency Agreement?
A sole agency agreement is a type of contract that a property seller will enter into with an estate agent. It’s the most common type of estate agent contract.
When you enter a sole agency agreement with an estate agent, you are agreeing that only that estate agent has the right to sell your property for the duration of the contract and they will receive the commission when they find a buyer.
If you end up finding a buyer yourself when you’re in a sole agency agreement, you won’t have to pay estate agent fees (although depending on the terms of the contract, they may still be able to claim commission).
Pros of a Sole Agency Agreement
The benefits of a sole agency agreement are that it can work out cheaper for you, as you’ll only need to pay one set of agency fees and one set of commission.
A sole agency agreement can also mean a more streamlined property selling process, as you’ll only have one agency to keep in contact with. It also means that you can build a relationship with that one agency, which can help to make the process easier.
Cons of a Sole Agency Agreement
The disadvantage of a sole agency agreement is that you will not be able to market your property with another agency for the duration of the contract. This can be frustrating if your property isn’t selling and/or you feel as though the agent isn’t doing a good enough job throughout the process.
What are the Alternatives to a Sole Agency Agreement?
If you don’t want to enter into a sole agency agreement, there are a few alternative estate agent contracts with their own benefits and disadvantages.
Joint Sole Agency
A joint sole agency agreement allows you to appoint two agents to sell your property. They will usually agree in advance on who will get the commission or how it will be shared between the agencies. It can be useful if you want to appoint a local estate agent who has local knowledge and also a national estate agent who may have a broader reach.
However, you may have to pay two sets of agency fees. Plus, you’ll have to deal with two separate agencies, which can make the selling process more complicated and stressful.
A multi-agency agreement means that you can appoint as many estate agents as you want to sell your property and only the agents that sell the property will get the commission. This can help to expand the reach of your listing but can also make the property selling process much more stressful, with different agencies competing against each other. It also usually means you will have to pay multiple sets of estate agent fees.
It can also be off-putting to potential buyers if your property is listed multiple times on property websites by different agencies – it can suggest that something might be wrong with your property as you’re desperate to sell it.
Sole Selling Rights
Sole selling rights is- similar to a sole agency agreement in that you can only appoint one estate agent to sell your home. But unlike a sole agency agreement, if you find your own buyer when in a sole selling rights agreement, you will still have to pay the estate agent.
Ready, Willing, and Able Purchaser
Some estate agents may attempt to offer a contract with a clause stipulating that the seller will have to pay the estate agent fees when the agent has found a “ready, willing and able purchaser”. Sellers should avoid these types of contracts, as they will still be liable to pay the fees even if they decide they no longer want to sell their home.
How to Cancel a Sole Agency Agreement
Sellers will have a right to cancel their sole agency agreement within 14 days of signing the calendar.
If you wish to terminate your sole agency agreement after this 14-day grace period, you will have to check the terms of your contract. It may be that you will have to pay an early cancellation fee.
It may be that you will be unable to cancel before the end of the contract period. In that case, you should again check the terms of your agreement to ensure you give the right cancellation notice and the contract does not automatically renew.