Property
Selling property in England and Wales
If you're using an estate agent to sell a property in England, there are a few things to keep in mind. Make sure you check your contract thoroughly before signing, and get legal advice if there is anything you don't fully understand. It's also important to work out exactly what fees and charges you will be liable for.
- Choosing an estate agent
- Personal interest
- The contract
- Charges
- Property particulars
- Other services
- Receiving offers
- Home Information Packs
You can sell property yourself, but most people use an estate agent.
You should shop around for an agent. Ask for recommendations from friends and relatives who have recently bought or sold property. Choose an agent who sells your type of property and offers a contract that suits you.
You could use an estate agent who is a member of the Ombudsman for Estate Agents (OEA) Scheme.
You can usually find a least one OEA member in the high street. Scheme members follow a code of practice which has been approved by the OFT and means that, if things go wrong, the OEA will help sort out the problem.
Remember that estate agents may be in a position to benefit personally from the sale of a property. You must be told promptly, and in writing, if your estate agent, or a relative or business partner of the estate agent, wants to buy your property.
When you use an estate agent to help you sell a property, you have to sign a legally binding contract.
Before signing, read the contract carefully and make sure you understand it. Find out whether you have the right to cancel the contract. Check how long it will be tied into the contract. It should allow a reasonable length of time to market your property and find potential buyers. Beware of contracts that tie you to an estate agent for a very long time.
If you are unsure, get advice from a solicitor.
You may come across some unfamiliar terms in a contract. Make sure you understand what you are agreeing to. The terms 'sole agency', 'sole selling rights' and 'ready, willing and able purchaser' must be explained in writing if they are used in a contract.
Sole agency
The estate agent is the only agent with the right to sell your property. If you find a buyer yourself, you don't have to pay the estate agent's commission although you may still have to pay for advertising or a 'For Sale' board.
If you change from one agent to another, there may be a period when both agents' commissions are due if your property is sold.
Sole selling rights
The estate agent is the only person with the right to sell your property. It is different from sole agency: if you find a buyer yourself, you still have to pay the estate agent.
Ready, willing and able purchaser
You have to pay if the estate agent finds a buyer who is prepared and able to buy your property and exchange unconditional contracts. You still have to pay even if you withdraw from the sale and unconditional contracts are not exchanged.
Multiple agency
You can ask several estate agents to act for you on a multiple-agency basis. Only the estate agent who sells the property will be entitled to a commission. The rate of commission is likely to be higher than for a sole agency or sole selling rights contract.
A few estate agents offer a 'joint sole agency' contract where two agents agree to share one commission, although the total fee may be higher.
If you appoint more than one estate agent to sell your property under a sole agency or a sole selling rights contract, each agent has the right to claim their fee when the property is sold.
Before you sign a contract, the estate agent must give you written details of how much you will be charged and when payments will be due.
The agent must state the exact amount you will be charged or, if this is not possible, the way the cost will be worked out and an estimate of the final amount.
You pay a percentage of the selling price of your property as a commission.
Some estate agents charge a low percentage plus an additional charge for advertising and 'For Sale' boards. In that case, the estate agent should tell you exactly how much the additional charge will be. If this isn't possible, you should be given an estimate of the charge and a breakdown of how it will be worked out.
Other agents charge a higher percentage of the selling price but this includes all costs.
Occasionally, an estate agent may charge a fixed fee rather than a percentage.
It should be clear from the estate agent's terms and conditions when you will have to pay. Fees are usually due when contracts are exchanged, but you don't pay until the sale is completed.
Under a ready, willing and able purchaser contract [see above], you have to pay as soon as a buyer who is prepared and able to exchange unconditional contracts is found. This applies even if you withdraw your property before the sale is completed. The estate agent may also charge you for 'For Sale' boards and advertising.
The estate agent (or agents) you have chosen will visit your home to take details such as the number and size of rooms. This helps the agent prepare a description of the property (known as property particulars) before advertising it.
There are strict rules covering the way property can be described. It is against the law for an estate agent to make false or misleading statements in the property particulars.
Estate agents also provide services to buyers. They may organise surveys and valuations or arrange mortgages or life insurance. This is common when an estate agency is part of, or linked to, a financial institution such as a bank or a building society.
If an estate agent intends to offer services to the buyer and will receive a commission or an introduction fee, the agent must give you written details. If the buyer decides to take up the offer, you must also be told in writing. This applies even if the agent offers services through someone else.
Potential buyers come and look at your property. If they want to buy it, they make an offer through the estate agent.
Estate agents must tell you promptly and in writing about all offers they receive. If there are some you do not want to be told about, such as those below a certain amount, you must tell the estate agent in writing.
You don't have to accept the highest or the first offer. Unless you say otherwise, the agent should keep you informed of new offers as they come in even if you are considering selling to a particular buyer or have already accepted an offer.
If you have a ready, willing and able purchaser contract and an offer for the full asking price has been received from someone who is prepared and able to buy your property, the estate agent can claim commission from you even if you don't accept that offer.
Even after you accept an offer, both you and the buyer can renegotiate the price and/or conditions of sale, or pull out without penalty, up until contracts are exchanged or accepted.
However, if you have a ready, willing and able purchaser contract you may have to pay the agent if you withdraw before contracts are exchanged. It depends on what happens during negotiations.
Since 14 December 2007 every home put on the market, no matter what size, must have a Home Information Pack. It brings together valuable information at the start of the process - such as a sale statement, local searches and evidence of title - which could save you money, time and stress. The Pack also includes an Energy Performance Certificate that contains advice on how to cut CO2 emissions and fuel bills.
Most homeowners in England and Wales will have to prepare a Home Information Pack before putting their home up for sale.
The Pack will bring together key information needed by buyers and sellers at the very start of the home-buying process.
When marketing begins, the Pack must contain at least the following:
- An index of contents
- An Energy Performance Certificate
- Evidence of title (for registered properties)
- A sale statement
- Searches and leasehold/commonhold documents (or proof that these have been commissioned).
The following documents are also compulsory, but can be added to the Pack later if there are delays in obtaining them:
- Evidence of title (for unregistered properties)
- Searches
- Leasehold/commonhold documents.
Where any items are missing, the index should explain why. Where searches, leasehold or commonhold documents are missing, the seller needs to provide evidence that an agreement has been made to provide the documents as soon as practicable and within 28 days, except in exceptional circumstances. If this takes longer than 28 days, marketers will be expected to demonstrate that they have made all reasonable efforts and enquiries to obtain them.
What do I need to do?
The person responsible for marketing a property must have a Home Information Pack in their possession while the property is on the market and provide a potential buyer with a copy of the Pack, or any document from it, on request and within the ‘permitted period’. These duties do not apply to sellers in cases where an estate agent is responsible for marketing the property.
The ‘permitted period’ is either 14 days following the request for copies, or, if later, the day on which a payment for copies is received.
Where do I get a Pack?
You will usually need a Home Information Pack if you’re selling a private residential property on the open market. As a seller, there are a number of options:
- Use an estate agent
- Get a solicitor to do it
- Use a specialist Pack provider
- Do it yourself
- Enlist the help of other businesses, such as financial advisers
- Some supermarkets have also indicated that they might provide Packs.
More detailed information is available at from the Home Information Packs website.
