it should be understood, that the Estate Agent does not ever handle
your money for the sale of your house as the money passes from Bank
account to Bank account. All Legal matters are handled by your solicitors.
Agents can perform the whole selling process from the beginning
to the end for you. If, however, you do not just want to sit back
and let the Agent handle everything, you should make this clear
from the outset. In order to maintain a good working relationship
with your Estate Agent, it is important that you decide on how much
you want to participate, and let the Agent know about it.
Suggest an Asking Price
first thing an Estate Agent will do is to suggest an asking price.
As mentioned above, you should not take their suggestion at face
value but get your own idea of how much your property is worth.
Factors that play a role when setting the asking price are the time
frame in which you want to sell your house and the strength of the
Take your Agent's suggestion into account, but do not rely solely
Presentation and Advertising
is one of the key functions of an Estate Agent. Your Agent will
take pictures of your house and compile a list of property details
to put into a standard format for presentation. Make sure to tell
your Agent about all the plus points of the property which he might
not notice in one visit. Furthermore, confirm that you can check
the presentation materials and property description before they
are posted on listings and websites.
The form the advertisements take vary from Agent to Agent, but most
will list your property across the Internet. And most have a website
with property listings. A good Estate Agent will make sure that
the advert reaches the target audience. And remember, Location,
Location, Location. As most buyers now start their search for a
home online it is more important than ever to ensure that your chosen
estate agent advertises widely on the web. Quality photos sell your
want your Agent to arrange and perform the viewings, make this clear
from the outset, otherwise you might incur additional charges. On
the other hand, you might prefer to show potential buyers around
your house yourself in order to point out all its advantages. Most
Estate Agents are fairly flexible when it comes to this.
Agents are professionals in negotiation. Yet the same problem arises
as with property valuations: an Agent's motivations might compromise
his performance. He might be more concerned about securing a quick
sale and advise you to accept the first offer that comes along.
Or he might be so keen on pushing up the price as high as possible
that he scares away potential buyers with his negotiation techniques.
We generally recommend you to have a fairly good idea of how much
you want to (and can reasonably) get for your house, and to stick
to it. If your house really does not sell, you can still make adjustments
at a later date.
If you are a hard-nosed haggler who has already beaten down Tunisian
cloth vendors and used-car dealers, you might prefer to take care
of the negotiations yourself. There is nothing keeping you from
it - just let your Estate Agent know!
an Estate Agent will charge you between 2 and 1.5 per cent of the
sales price as a commission, ( we charge 0.75% ) but their fees
are usually negotiable. One thing to keep in mind is that your Agent
might make a lot of profit if you are selling a mansion, but a one-bedroom
flat in a shabby building in outer Sheffield won't pay for his children's
education. Consider this before you try to push him below 1.5 per
It is not recommended simply to go for the Estate Agent with the
lowest fee. Read the small print of the contract and make sure the
amount and quality of advertising is sufficient! An Agent's commission
is usually based on whether there is one or more Estate Agency instructed
with the sale. If the Estate Agent is the sole agency, which means
they have the exclusive right to sell your home for about six to
eight weeks, the commission will probably be lower than if you have
a joint sole agency (you instruct two Agents to work together on
your behalf and share the commission) or a multiple agency agreement,
in which case several different Estate Agents compete to sell your
house and do not share the agreed commission.
common sense advice: before you sign the contract, read the small
print and negotiate any contentious terms. You should make sure
the time frame for the agreement is set properly; it does not usually
exceed 3 months, after which you are free to switch Agents if you
are dissatisfied. However, if you have a sole agency agreement,
we recommend you push the term down a bit to approximately 6 weeks.
Agreements and Charges
do agents get paid and by whom?
Estate agents act solely for you the vendor of the property who
pays them but they may also work hard liaising with your purchaser
so that the sale is drawn to a satisfactory conclusion. Their fees
become due at exchange of contracts, but their invoices are generally
paid upon your authorization, by your solicitor at completion. All
fees are subject to Vat at the current rate of 20% .
agreements are separated into three main categories:
1) Sole Agency:
This agreement is the most common - it is to be recommended in most
cases because it is the cheapest option for the vendor and the agent
has the incentive to market the property without competition for
a given time. Most estate agents will offer you commission rates
for this agreement at around 1.5% of the final sale price, i.e.
£1500.00 (plus Vat) for a sale price of £100,000. (
we charge 0.75% ) In a sole agency agreement, agents will often
request that they have a set minimum period in which to sell your
property without fear of competition. In fact this minimum time
limit is not legally binding, but in fairness it would be reasonable
to adhere to this and selling through another agent within this
period would be bad practice and possibly extremely costly for you
as a multiple agency fee would then be applicable.
Joint sole agency: This next step up from a sole agency agreement
will cost you more. It means that normally two agents work together
to sell your property (not in competition with each other). You
can expect them to split the commission you pay either 50/50 or
60/40 in favor of the actual agency who introduced the buyer. Marketing
your property like this may be recommended if you want different
agencies to complement each other by exposing your home to slightly
different audiences. Typical rates for this type of agreement would
be in the region of 2.0% or a little more (plus Vat).
3) Multiple Agency: The most expensive way to employ agents to act
for you. You can instruct as many agents as you like to sell your
home, but this is an unusual tactic. Most would be purchasers will
research the market introducing themselves to several agencies at
a time. Generally they will find your property whether one or all
of the agencies send details of it to them. This 'shot-gun' approach
of exposing your home to the market could even back-fire on you
as purchasers can interpret such marketing as a sign of desperation!
Commission is payable to the successful agent only and could be
expected to be in the region of 3.0% (plus Vat) of the sale price.
NB If more than one agent markets your property they must all agree
to the same guide price.
get a mortgage?
a mortgage in today's harsh economic climate remains a struggle
for many, says Melanie Bien, director of independent mortgage broker
of the biggest consequences of the financial crisis is that it is
now much tougher to get a mortgage.
who has applied for a home loan in the past couple of years will
have found that lenders have much tighter affordability criteria,
with many applicants rejected even though they have never had a
problem getting credit before.
is not just first-time buyers who are struggling but those who already
have a relationship with a lender are finding that things have changed.
to the Financial Ombudsman Service’s latest annual report, there
has been an increase in the number of borrowers who have been refused
permission by their lender to ‘port’ their mortgage, or take it
with them when they move home.
complained to the Ombudsman that, in response to tougher lending
conditions, their lender’s change in affordability criteria meant
they no longer met the requirements through no fault of their own.
affordability is key as lenders move away from strict income multiples
in favour of a broader assessment of what a borrower can afford
when calculating how much they are willing to lend.
outgoings into account as well as income, lenders rightly argue
that this is a more responsible way of calculating how much a borrower
are lenders taking affordability too far? When it comes to homeowners
wanting to port their mortgage, it seems incredibly unfair that
they may not be able to because their lender has tightened its affordability
lender may be within its rights to do so but is this treating customers
who are refused permission to port have two choices: stay put, trapped
in their home, or pay thousands of pounds in early redemption charges
to get out of the mortgage.
sections of the population have been heavily penalised by tighter
affordability criteria. The self-employed, in particular, are finding
it tougher to get mortgages as so-called 'self-certification' loans
– which do not require the borrower to prove their income – have
is not impossible to get a mortgage if you are self-employed but
you must prove your income, with lenders wanting two to three years
of accounts. Those who have less than this may be able to find a
sympathetic lender but the majority will have to defer their purchase
is worrying is that affordability could become even tighter once
the Financial Services Authority introduces new proposals on how
homebuyers should be assessed for a mortgage.
Council of Mortgage Lenders has warned that 2.2 million existing
homeowners would be unable to get mortgages if the rules were introduced
in their current form, the latest version of which will be unveiled
later this month.
main areas of concern are that the FSA proposes that lenders calculate
affordability over a 25-year mortgage term, even if the actual term
is longer, while ability to repay should be on a full repayment
basis even if some or all of the loan is interest-only.
problem with the FSA’s proposals is that they are too much too late.
The FSA wants to clampdown on the explosion in credit seen in the
run-up to the financial crisis.
the clampdown has already happened, with lenders tightening criteria
and demonstrating far less of an appetite to lend. The result has
been a dramatic decline in the level of lending, and these proposals,
if implemented, would make that situation far worse.
the FSA should aim to stamp out unacceptable lending practices,
this should not be at the expense of making it impossible for the
creditworthy to get a mortgage.
it comes to mortgages, one size really doesn’t fit all.
what next for borrowers trying to get a mortgage? Seek advice from
an independent mortgage broker; check your credit file before making
a mortgage application to ensure it's correct; pay down any debt
on credit cards or overdrafts if you can afford to do so; and pull
together as big a deposit as possible.