Estate Agent contract - any red flags?

[MAT525]

Im looking at selling my relatives property in SE London, 2 bedroom flat. It's a probate sale.

Estate agent sent through the contract....estate agent is a well known chain.

I have limited experience with regards to such contracts. It was going to be a fixed fee contract of £3600 (inc VAT). I need to check with the agent whether photography charges are included in this fee. But rather overwhelmed looking at all the other details.......like withdrawal charge etc.

Have attached a few images of main sections of the contract.

Would like any advice as to whether there are any Red flags on the contract before I sign......How to approach the estate agent in this regard.

Thanks.

Pretty much endless red flags. I would never sign such an agreement, and most certainly never pay up front for marketing.

I wouldn't sign up for 16 weeks (plus whatever the notice period is) as that's far too long if you decide they are useless. You need to give them a bit of a crack at it but that's more like 4 weeks (in my opinion) with pretty much immediate termination on notice.

I wouldn’t agree to pay for marketing either but it seems like they can only recoup marketing costs if you cancel within 14 days is that right? If so then I think it’s ok as long as you have no intention of cancelling within 14 days.

A 16 week tie in period is long, though not unusual. I would try to negotiate this down to 8 weeks.

If you paid an EA a 1% fee on the estimated value, what would that come to?

I will try to have a look on my desktop tomorrow, but I agree, 16 weeks is unacceptable in a falling market, especially in the SE where prices are being hit hard.

Four weeks is the longest I would accept.

Large chain agency is the biggest red flag to me.

Awaiting your response re: percentage cost.

We just sold in SE London (not a flat). Going rate (for a house, at least) is around 1% plus VAT and no marketing/photo costs. Definitely not 16 weeks (think we had 8 earlier this year?)

What area is it in? If FH/Sydenham, happy to give a lowdown on the ones we found good and the ones with bad reputations.

As someone who was an estate agent for 10years but no longer is... it looks perfectly reasonable to me

They have to spend time and money taking appraising your property, photographing it, compiling details, putting those details into a format for market, taking ID, paperwork for the house, liaising with yourself to sign off the details before market.

Then they spend money on printing the details, talking to buyers about your property, meeting buyers at your property, negotiating a sale

Then there's the job I did for 3 years, progressing the sale, liaising with solicitors, other estate agents, the purchaser, the broker, the surveyor etc etc

The minimum I'd expect is 16 weeks as the only agent to try to sell

If, after spending time and money on trying to sell your property they find you a suitable buyer who offers an acceptable price that you've accepted and THEN you play silly buggers and decide you're not selling, then IMO fair enough they should get something after all they have fulfilled their end of the agreement!!!

If you want someone to plaster up some of your crappy photos and do no viewings for you, or negotiating or progressing of your sale, then just use an online "agent"

Honestly some of these comments are the reason why I don't want to do that job anymore. People are so entitled.

I understand the frustration of good EAs when people don't want to give them a fair chance to sell the property before ending a contract and 4 weeks is not enough time, in my opinion. Especially in this market. And I wouldn't use an online agent personally as I value the expertise & experience a good agent brings in getting the deal to completion.

However, it can equally be frustrating as a seller when you find out that despite the good sales job the EA did on you, in fact their office isn't very proactive or good at returning calls & other basic things. Or when you are getting literally zero viewings as some people experience, which proves the valuation the EA gave was too high.

When you feel that the service is poor, 16 weeks is a very long time to have to wait before bringing an end to the contract.

Agreed. If EA's were effective at their job then they would be able to set a price to sell within 8 weeks. If they have over-estimated the value of their clients home or accepted a daft seller instruction then more fool them.

Many EA's are very good. Some just need removing from the market.

8 weeks is a fair amount of time in which to be able to judge whether your EA is any good or not. It took our EA longer to sell my Dads flat but that property was a hard sell tbh and they were doing their job in getting people through the door.

They did over value it somewhat but so did the other EA we got to quote, in fact the other EAs valuation was 50k higher! I don't like the practice of routinely overvaluing in order to win business but I can see it is hard for EAs to keep losing business by being realistic when sellers are at the fantasy stage.

With a good EA you grow to trust them so when they advise a meaningful price reduction you take their advice promptly.

Good lord. You have retired from the industry and you really need to chuck out the cool aid.

Entitled?

Now you have pissed me off. House prices rose about 30% in the last three years through absolutely nothing to do with estate agents. A lot of people can't afford to sell their homes due to costs and mortgage costs tripping meaning they can't even afford stamp duty.

But you think people wanting to get a bargain are now entitled? Fuck off. House prices should never have risen 30% in 3 years, and people generally like to be able to afford to feed their families.

You may well have been the best EA with the highest level of integrity, but in terms of level of trust, EAs are are in the bottom 10% of trusted professions in the UK. Why is that? Because most of them lie through their teeth, repeatedly. They cause heartbreak for so many homeowners through their lack of transparency and lies, and in the last two years it's become increasingly worse with them them trying to upsell really shitty conveyancers, EPC assessors, mortgage brokers and surveyors. Some won't even put an offer forward if the buyer doesn't use their instant backhander services.

These are just a few of the reasons that absolutely nobody in falling market should sign up for more than a four week contract. As the housing market becomes more desperate, so does the sales shit they spout to sellers.

I am happy you gave value when you worked in the industry. But giving value means an entirely different thing now.

@Flubadubba , I would like to know local recommendations/who to avoid although I am in CP. I'm thinking of moving out of London in the next year, although am groaning inwardly at the thought of dealing with agents.

@Webbedlife none of the agents we looked at covered CP from the offices we looked at (if that makes sense!). The local CP Facebook groups are very honest on experiences with agents in the area, though, so worth a look!

We also moved out of London- to W Sussex, to be closer to family.

Firstly, thanks for all for taking the time to come back with your replies.

From my side, we just want to pay the agent specified fee and sell the house. We don’t want to be burdened with additional hidden costs cropping up on account of the Buyer (ie say through no fault of ours).

From what research I have been doing online the first thing that sticks out is that it’s a ‘Sole selling rights Agency’ (something that a lot of websites say to avoid).

Looking further into the fine print (T&Cs) of this: it mentions
2.2 The Seller will be liable to pay the Sole Selling Rights Agency Commission Fee to the Agent, in addition to any other costs or charges agreed, in each of the following circumstances: -
• if unconditional contracts for the sale of the Property are exchanged in the period during which we have sole selling rights, even if the Purchaser was not found by us but by another agent or by any other person, including
the Seller;
• if unconditional contracts for the sale of the Property are exchanged after the expiry of the period during which the Sole Selling Rights Agency is in force but to a Purchaser who was introduced to the Seller during that period or with whom we had negotiations about the Property during that period.

However, the Seller will not be liable to pay the Sole Selling Rights Agency Commission Fee in any of these circumstances:
i. if unconditional contracts for the sale of the Property are exchanged (with a purchaser introduced by us or with whom we had negotiations in relation to your property) more than six months after the
expiry of the period during which the Sole Selling Rights Agency was in force and the Seller has appointed another estate agent, or
ii. if unconditional contracts for the sale of the Property are exchanged (with a purchaser introduced by us or with whom we had negotiations in relation to your property) more than twenty four months
after the expiry of the period in which the Sole Selling Rights Agency was in force in all other circumstances.

Would like to clarify:

1. Does this mean- that say after 16 weeks minimum period (as it currently stands) if we terminate the contract with EA1 (and give the required notice). We then sign up with EA2 and within 6 months EA2 happens to find a buyer who had viewed the property with EA1 we would still have to pay EA1 their commission?

2. Regarding the Withdrawal charge and ‘ready, able, willing’ purchaser clause –
   a) say the estate agent introduces a buyer who in turn makes an offer which is subsequently accepted by us. Say then the buyer then pulls out (for any reason), would we still be required to pay the EA the withdrawal charge (for no fault of ours)?

b) what if we accept the offer, then at last minute buyer tries to offer less than was agreed (Gazundering) and we decide not to go accept the new lower offer – would we still have to pay withdrawal charge?

Sole selling rights is the most normal mode (90%+ of sales)

Yes I think you may be overanalysing this now @MAT525

Sole selling rights is normal so you must be looking at some odd websites if they say Avoid.

What about the 'ready , able , willing purchaser' clause - Is this something usually done by EA too?

EAs don't normally charge a seller if they decide they no longer wish to sell their property.

No. Id never pay charges for marketing or listing on online portals. And what is your selling price? What percentage is the fee they are charging (plus the advertising fee)?
It is quite normal for them to get a commission if a buyer they introduced goes on to purchase the property within X months even if at the time it is listed with another agent. It is NOT normal to charge you 50% commission if you decide not to proceed gif whatever reason. And if the buyer pulls out they are no longer 'ready willing able', same goes for gazundering- they have to be ready willing able to buy at the AGREED price.
I've dealt with a dozen agents over the years and have never had these conditions in the contract - either negotiate them out or go with someone else.

Is this with one of the cheaper ‘fixed fee’ type agents? It may be that in trying to pay the minimum overall you’ll be signing up to onerous clauses you wouldn’t have to elsewhere. Per other posters, I’ve never had to sign a contract with these sorts of clauses and have also bought and sold numerous times.