Selling Privately & Sole Agency Contracts


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SOLE AGENCY

“You can’t sell privately if you are using an agent”

…OR CAN YOU?

 
Sole agency means that your estate agents are entitled to commission ONLY if they introduce your buyer and bring about the sale of your property, OR if another estate agent sells the house during the period of sole agency.

‘Sole Agency’ contracts, the most common form, do NOT prevent homeowners from selling the property yourself, either using newspaper advertising or online advertising.

The Office of Fair Trading rather muddied the water on this by issuing guidelines in 2005 suggesting that if you use an online ‘property retailer’, you may incur additional fees from your agent if the property is sold privately. However, this was misconstrued by much of the press as meaning you cannot sell privately alongside an agent, but the truth of the matter is that the OFT guidelines merely try to set out what the law has always said (the Estate Agents Act 1979 which pre-dates the internet) without introducing any new ruling.

The OFT guidelines say that if you use an online service which says it is not an estate agent, but actually provides an estate agency service, this will conflict with a sole agency agreement. Well, yes – this is fairly obvious really.

The key here is that to use an online service alongside an estate agent without incurring commission in the event of a private sale, you must check that the online service provides NO agency services.

Because there are hundreds of property websites that despite their claims to the contrary *are* providing estate agency services, consumers do need to be careful who they choose – this is the real essence of the OFT’s guidance. What is classed as an ‘agency service’ has no clear legal definition (although the OFT attempt to provide a guide), but these would be typical examples of what a court may view as ‘agency work’:

– Operating a register of buyers
– Fielding property enquiries on behalf of vendor
– Arranging viewings
– Handling negotiations and passing on offers
– For sale signs showing a company telephone number

Misleading information

Some estate agents may argue that all property advertising websites are estate agents, (mis-) quoting the OFT guidance on “property retailers”, in order that they can claim their commission even where a home is sold privately. We do not agree with this argument (nor do the Consumers Association), although customers contemplating using our service should be aware of the possibility of this tactic being used by agents.

Simple steps to avoid problems with your estate agent

READ your agents contract before you sign it.

CHANGE anything in the printed terms you don’t want. You do not have to accept the ‘standard’ terms provided by the agent.

ADD a clause to your agency contract confirming that no agency commission is due on a private sale and get your agent to agree this before signing up to them.

Other References

The Consumers Association WHICH? are campaigning for reform of misleading terms in estate agents selling contracts and fairer practices and treatment of customers.

If you are experiencing difficulty with an agent over your contract and the rights your agent is claiming against you, refer to the WHICH? home advice website, for information which may assist you.

Which Consumer Magazine
 
WHICH? – Dealing with Problem Estate Agents:


WHICH? – How to Sell a House
CLICK HERE for How to Sell a House page


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