By: Ben Scott from Yopa
Everyone is entitled to change their mind and that includes with regards to the choice of estate agents. If they are giving you good service, with plenty of viewings, from potential buyers who are actually interested, then you are probably very happy. But what if, after weeks or even months, you’ve hardly seen a soul, let alone had any serious interest - then it’s time for a change.
When a property first goes on to the market it’s quite normal to get a flurry of viewings, usually followed by positive feedback. But if the property is still on the market after six months or so and your viewings have slowed to a trickle, then it might be worth considering a change of agency.
For example, perhaps the agent overpriced your property in order to get it onto their books, and, when you contacted them to see what’s going on, they tell you to drop the price. Maybe there are easily resolved problems with your house which the agent has not bothered to
mention - either way, it’s time for a rethink. After all, you don’t want your property to become an ‘old chestnut’!
In this article, we’ll cover the possible legal ramifications of leaving an estate agent contract, what your obligations might be, as well as what to do next.
So without further ado, let’s get to it.
What are the obligations?
When you signed the contract with your agent, regardless of whether you agreed to a sole, joint or multiple agencies, they will have given you a copy of said contract. The first thing to remember is that they are obliged, by law, to give you a fourteen day cooling off period. If you are within that time - perhaps you’ve simply changed your mind about selling - then a simple email may be enough, although be sure to attach a read receipt. If that’s not possible, then write a formal, dated withdrawal letter and send it by registered post. There are many reasons why you might want to get out of your contract, including the following:
- You no longer have faith in the agent to sell quickly
- You have been unhappy with the service
- Insufficient viewings without a good reason
- Lack of promotion and advertising
- You have found a buyer yourself, (beware if you signed an exclusivity clause, see below)
Before signing any contract, it’s important to read it carefully and to know exactly what it contains. The agency, after the fourteen days, may well spend money on advertising and phone calls, so there might be a fee to pay. Be sure to know your obligations, length, and type of contract and rights. If they didn't sell your house and it is still available, or you have withdrawn it from the market, then you will not owe them any commission.
Finally, if you are over your fourteen days cooling off period our advice is to go through the contract’s small print with a fine tooth comb. This will detail what your liabilities for ending the contract will be.
What to do next?
As mentioned in the previous section, there will almost certainly be a clause in your contract regarding the procedure and implications, if any, of canceling. However, before taking any firm action, our advice is to talk to the agent first because they have their reputation to take protect - they really don’t want to fall out with you, and if they can retain you as a customer then it’s a benefit to all parties!
Often with a sole agency, (lower commission rate, so very tempting), there will be an exclusivity clause that could apply for months. Bear in mind that this is often negotiable and shouldn’t last for more than eight to twelve weeks. With regards to selling your house privately, this is no problem if you signed multiple agency contracts, however, if you gave them exclusivity, they may well be legally entitled to their fee. Also, even with multiple agents, you will have to prove that your buyer did not come through one of them; each viewing will have been signed for by the party and agency prior to visiting your home, so beware - there will be a record.
Changing from an online agent to a high street agent, and vice versa
The past few years have seen an explosion in the amount of online and hybrid agents coming to the market. These type of agencies – just like their high street equivalents – operate fourteen days cooling off periods, so if you’re still in this window then canceling should cost-free and relatively straightforward.
Because online agencies often focus on ‘pay upfront’ pricing, switching to another agency is usually a case of biting the bullet and taking the hit on the £800 - £1,000 costs. Luckily, online estate agents tend to be considerably cheaper than their high street equivalents, which means that your liability for canceling early will be much less than normal.
You may have also noticed that some online estate agents offer a ‘pay later’ option. Since the majority of these options are financed by a third party company, in most instances you’ll still be liable for the full costs if you decide to cancel early. As with everything, be sure to read your contracts closely before signing on the dotted line!
The Property Voice Insight from Richard Brown
This is a good, specific piece around changing your estate agent. However, before changing your agent, you will also need to select one in the first place, of course. So, do your homework up-front and it might just save you the disappointment and hassle of having to change later on.
Online / DIY agents often can be cost-effective; I tend to think a low-cost online / DIY agent would work will in a warmer market, where simply showing your property is for sale might simply be enough to draw in the potential buyers to view.
Sole agency with a good reputable estate agency might well be a cost-effective solution compared to multiple agency, although is likely to be more expensive that the aforementioned online / DIY agents. Try and pick an agent that is nearby, has properties similar to yours and has good ratings and reviews.
Multiple agency costs the most, but also means agents are vying to be the 'first past the post' and secure a sale for you. Some regular property traders suggest that whilst multi-agency could have the larger fee attached, the resulting potentially sale price agreed and rapid time to sell metrics can mean it is worth taking on.
So, it is a balance between cost, involvement in the process and getting your property marketed as widely as possible,
Ben from YOPA mentioned reading the small print a couple of times and I cannot stress the importance of doing this enough. Yes, it's boring, but many have been caught out with hidden fees, long lock-in periods and all sorts of strange contractual terms that you may not be comfortable with.
Finally, don't forget that most agents will keep a record of all inquiries and viewings made through them, so don't try to be smart and disengage them if a buyer tries to bypass the agent...they will find out and then claim their fee from you in the end in any event.
If you don't mind being more hands-on with your sale, such as undertaking your own viewings or performing the negotiation yourself, then an online / DIY agent could suit you. In the past, I have tended to go with a traditional agent that is local and specialises in my property type and value, with decent KPI metrics and a hungry sales team, but that's because I am often not close to the property I am selling and I don't want to spend my time showing people around houses. I would probably give an online / DIY agent a go if the property was closer to me potentially.
I do ALWAYS read the agent contract, querying and negotiating where possible...8-12 weeks should be enough to sell a house if done properly, so don't accept longer than this.
Finally, beware of the 'vanity valuation' ruse that so many agents seem to practice. This is where they give you a high potential sales figure to convince you to instruct them instead of a competitor, only for them to start asking you to drop the price after just a couple of weeks or so, until it matches a more realistic level. I always benchmark recent sales comparable values myself and won't allow an agent to massively overprice the listing. If it is priced fairly, it should sell quickly and it may also lead to a choice of offers that you can then use against each other and potentially drive the final price up. Or if not, you may get to choose the buyer in the best purchasing position to suit you instead.