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What to Watch Out for in an Estate Agent Contract

Estimated reading time 7 minutes

Estate agent’s contracts can be quite complex and like with any agreement, this is a good reason to be sure to know what you’re signing. That means figuring out what’s in the contract and what they will mean for you.

When it comes to the contract, you can expect it to be somewhat complicated and filled with lots of legal terminologies, jargon, and more. Not many people have the specialized knowledge to decipher what these mean. When you read through one, especially for the first time, it can be a very overwhelming experience.

The thing to always remember is that you are a customer of the estate agent. They want your business. As the buyer, you need to ask the agent to be completely honest and transparent with you. If there’s something you don’t understand, they should be willing to help. And if you find something in the contract that you don’t agree with, you have the right to contest these issues.

To help you avoid falling victim to an unfair estate agent’s contract, we’ve put together some information that will help you see some issues that can cost you more time and money. Don’t ever sign on the dotted line until you understand everything in the contract and feel confident there are no hidden costs.

What Type of Estate Agent Contract Will You Be Dealing With?

There are basically four main types of contracts; however, not all agents offer each of these. If you’re looking for a specific type of contract, then it may be necessary to shop around to find an estate agent who can provide the one you’d prefer.

Ready, Willing Able Purchaser Contract

This type of agent contract involves the agent finding a buyer for your home. With this contract, you are obligated to sell, even if you don’t want to sell it.

So, you must be completely sure, 100%, that you’re ready to sell and if so, then this type of contract might be right for you.

Sole Selling Rights Contract

The sole selling rights contract means that you’ll only be able to use a specific estate agent to sell your home for a specified period. This will be stated in the contract.

If you do find a buyer on your own and have this type of contract, you will still have to pay the estate agent’s fee.

Sole Agency

This is similar to the sole selling rights contract; however, if you find a buyer on your own, you don’t have to pay anything to the estate agent.

One potential issue with this contract type is that the contract may be open-ended. The agent may come back and claim a commission, even years later, after the property was sold by another agent. They may claim that the buyer was originally shown the property by themselves rather than the second agent.


This is a common estate agent contract. Here, you list your home for sale with several estate agents (as many as you’d like). However, only one will receive a commission for selling your property. This is the agent who actually makes the sale.

You may find the fees are a bit higher with this type of contract; however, using this method to sell your home means there may be more potentials buyers, too. This could be a huge benefit, especially if the buyer makes an offer above the asking price.

No Sale, No Fee

Then there are estate agents who go for a no sale, no fees basis. In other words, if they don’t sell your home, then you don’t have to pay them. For this type of contract, it’s essential to pay attention to the wording in the contract. Look to see if there are any hidden fees. For example, some agents may try to include costs for spending time trying to sell your home, even if they don’t make a sale.

What About VAT?

An estate agent’s contract should be explicitly clear about the percentage of the commission the agent will charge when they sell your property. If the agent charges a fixed-rate commission, then it’s essential to ask when this fee includes VAT. There are some agents that don’t include VAT, which means you may face another charge on top of the commission.

For a commission based on the final sale price of your home, you don’t have to settle on the percentage the agent gives you. This is a point that you can negotiate on.

The negotiation could go something like this: you may offer X% for the commission if the agent manages to sell your property for the asking price. Then offer Y% if the agent manages to sell your home for more than the asking price. This is a great way to get an agent to make a fast sale!

Contractual Tie-in Periods

There are times when the first agency you use may not work out for some reason. If that’s the case, you can move on to another agency. However, if you have a contract that stipulates you’re contractually tied in for a specific period of time, then you will have to stay in the contract until it’s completed.

Tie-in periods can vary from two to 20 weeks. Some contracts even say you must give notice if you’d like to extend the contract. Be sure to check to see if the estate agent has included a tie-in in the contract.

Tie-ins aren’t essentially bad; however, it can be a poor experience if you’re stuck with an estate agent or agency that’s not working for you. You lose time finding a buyer.

You’ll also need to see if there are fees for ending the contract early. It’s important for this reason to determine if the contract requires you to give notice if you’d like to terminate. Also, check if the contract allows you to terminate after a specific amount of time.

If you’re not happy with the tie-in clause in the contract, then simply don’t sign it. Try to negotiate the tie-in clause with the agent. If they’re not willing to work with you on this, then look for another agent who is.

Hidden Fees

Selling a home can be an expensive process, especially when looking to buy another. So, be sure to look out for estate agents who are not transparent about the fees. This information should be included in the contract, but agents try to get by without it.

Look for a very clear breakdown of the costs involved with using the agent’s services. Watch out for these fees in the contract:

  • Photography
  • Marketing
  • Contract termination
  • Legal fees
  • Admin fees

If you do find additional fees that were not discussed, then bring them up. The agent should have everything clearly outlined in the contract. If the agent’s not willing to negotiate/discuss the fees, then it’s time to find another agent.

Summing It Up

When reviewing an estate agent’s contract, watch for these issues before signing the contract:

  • VAT
  • Fees
  • Contract type
  • Commission
  • Tie-in period
  • Dates

If you’d like to avoid the hassle of using an estate agent, then why not consider using an agency that provides a transparent, simple process? They can help you sell your house fast, cover all fees, and more. And you won’t have to worry about hidden fees in the estate agent contract!