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Estate agents

Estate agents

The estate agent is employed by the seller to act for him and arrange a sale of the property on the most advantageous terms. This usually means getting the highest price. The agent will advertise the property in his showroom and in newspapers, etc. and will arrange viewings.

It is important for buyers to realise exactly who the agent is working for. Many people are unaware that the agent owes the buyer no duty at all.

Naturally, the agent has to be something of a salesman. After all, he wants to sell the house - normally he only gets paid if a sale takes place. This means that buyers must be very wary of relying on any advice from an agent.

Once these limitations on the agent's position are taken into account, a good agent can be very useful to a buyer. He should be able to show the buyer a selection of suitable properties, so that the buyer can get an idea of what is on the market.

Instructing an Agent

A seller instructing an agent should always be clear about how the agent's fees will be calculated. Most agents charge a percentage, but some charge a fixed fee. Sometimes the agent will act on a "no sale - no fee" basis. You should always be clear as to whether this includes advertising.

Some agents charge the seller a fee if the property is withdrawn before sale. This is often described as "out of pocket expenses".

An agent should always set out his fees in writing to the seller.

"Holding" deposits

Agents will often ask the successful buyer to pay a deposit once the sale has been agreed in principal. This is sometimes, but misleadingly, called a "holding" deposit. The truth is that such a deposit does not hold anything, or bind the seller in any way. There really is no reason why anyone should pay a deposit to an agent, although it is sometimes seen as a sign of goodwill on the buyer's part. If a deposit is paid to the agent, the buyer should check (and see that it is recorded in writing) that the deposit will be repaid if for any reason the transaction does not proceed.

A minority of agents try and get buyers to pay them a substantial deposit, say five or ten per cent of the price. Under no circumstances should a buyer agree to do this. It is not usual commercial practice, and carries serious risks for the buyer that he could lose his money.