Most homeowners today use an estate agent to sell their house.
Even with so many other selling methods available, regular estate agents remain the most popular route.
However, some buyers find that one pitfall of this channel is contracts.
But what are the contents of this contract? And how do you get out of an estate agent contract in the UK?
Keep reading to find out.
What is an estate agent contract?
An estate agent contract is a written agreement between a property seller and an estate agent.
It establishes the terms under which estate agents are selling homeowners’ properties.
There are several different types of estate agent contracts (we have summarised these further below).
Each one outlines:
- The terms under which the estate agent is entitled to a fee (commission) from the house sale
- The period for which the contract is valid.
Does every estate agency make you sign a contract?
The UK government website states that if you (a property seller) decide to use an estate agent, you must sign a legally binding contract with them.
Each estate agency’s contract will be different.
For example, some specify that they don’t have exclusivity and that there is a no sale, no fee policy.
This is common with many – but not all – online estate agencies.
Many people get a legal expert to sit down with them to review the estate agency contract before signing it.
Different types of estate agent contracts
There are five main types of estate agent contracts. These have been explained below.
1. Sole agency agreements
A sole agency agreement is the most common type of contract. It means you only agree to sell your house using one estate agent.
If you sell to someone to whom this estate agent introduces you, they are entitled to the fee. If you find your own buyer, they do not receive a payment.
2. Sole selling rights contracts
A sole selling rights contract is similar to a sole agency agreement but with one major difference.
You agree to sell your house using the estate agent for a set period. But if you find a buyer independently, without your estate agent’s involvement, they are still entitled to the fee.
3. Joint agency agreements
A joint agency agreement means that you hire two agents. Usually, one of these is a nationwide company while the other is local.
These two agents agree on how commission is shared in the event of a sale.
4. Multi-agency agreements
A multi-agency agreement involves simultaneously hiring several estate agents to sell your house.
Whoever introduces you to the buyer that you sell to receives the fee.
5. Ready, willing and able purchaser agreements
A ready, willing and able purchaser agreement is the final type.
Your estate agent receives a fee if they introduce you to someone prepared to buy your house.
Even if the sale falls apart, they still receive payment.
How long does an estate agent contract last?
It can vary significantly, depending on the company you use. Some estate agents ask you to sign a contract that lasts for four weeks.
But in the more extreme cases, it can be for up to 6 months.
Contract timeframe factors
The timeframe outlined in the contract may relate to different factors.
So, many agreements include, for example:
- Tie-in periods: how long do you permit the estate agent to sell your house for
- Notice periods: how much notice you (or your estate agent) must give to terminate the contract
- Cooling-off periods: an initial period (often two weeks) in which you can cancel the contract without paying any fees.
Can you break estate agent contracts?
If you break the terms of your estate agent contract, you usually have to pay a fee. This will be outlined in the contract itself.
A common scenario is that you must pay the commission the estate agent would’ve earned on your house if they’d sold it.
Speak to a legal expert if you need more guidance on this.
Can you refuse to sign an estate agent contract?
All estate agents ask you to sign the contract. If you don’t like the contract terms, you should look for another estate agent.
But no matter what, all legitimate estate agencies will ask you to sign some agreement.
How to get out of an estate agent contract in the UK
As mentioned above, most estate agencies have
- A cooling-off period. This means that you can cancel the contract within the first 14 days without incurring any fees
- A notice period. This is the amount of notice you must give to cancel the contract.
You must adhere to these terms once you have signed the contract. In most cases, it is 28 days’ notice.
If you cannot find either of these terms in your contract, speak to a legal expert who can guide you.
Comprehensiveness matters
Your contract should cover all possibilities surrounding your desire to leave and what you can or cannot do. Once you sign it, you agree to the terms, and they become legally binding.
If the contract needs to be more accurate or the estate agent has broken the terms, you should contact a legal expert.
They may advise you to withhold the fee for selling the property. The case will then be taken to court.
