Mortgage guide

What an agent does

In surveys estate agents come out about as reputable as politicians - right at the bottom. So make sure you employ the right person to sell your home. An estate agent's job is to put the right price on your property, and then find the right buyer for it. Both are very important. If an agent puts too low a value on your property it will sell quickly, but you could lose out on quite a lot of money. Too high a valuation means that your property may not sell at all, or may not sell in time for you to buy the home you want. It is also important that the agent can find enough potential buyers to come and see your property. Even at the right price, if no-one sees it you will not have a sale.

Finding an agent

When you choose an agent, check that they are a member of a professional organisation such as the National Association of Estate Agents (NSEA) or Incorporated Society of Valuers and Auctioneers (ISVA), and that they follow the estate agent's 'Code of Practice'. This will ensure you are protected against any rogue operators.

Check locally for agents who have been operating in your area for a while. The longer they have been around, the more likely they are to know how to value property, and they will probably have good contacts with potential buyers. The number of 'Sold' boards with the agent's name on them will also be a clue as to how successful they are. Also check local papers to see which agents advertise the most. But remember the biggest agents aren't necessarily the best, but the smallest don't always offer the best personalised service either.

Try to make sure that the kinds of property they sell is similar to yours. If your home is the cheapest or the most expensive on their books they are less likely to have lots of prospective buyers - and the chances of selling will be smaller.

How much will they charge?

Fees can vary quite a bit, so make sure you know what you will have to pay before you make your choice. Normally the fee is a percentage of the sale price, so you may be better off by paying a higher fee to an agent who can get a better price for your property. Agents also quite often charge different rates according to whether they are the sole agent or whether the property is being sold by other agencies. Note also, if you negotiate too low a fee, the agent you use might not put as much effort into selling it.

Generally an agent will also charge VAT on top of their commission - at 17.5% If the agent is charging 3% commission the VAT will add more than half of one per cent of the price of your house to their rate.

Before you agree to a commission rate sit down and what it will mean in real terms eg 3% of £150,000 is £4,500. A huge sum of money. See whether you can negotiate your estate agent down - even 0.5% reduction can make a difference 2.5% of £150,000 is £3,750 saving you £750 at a time when you will be pressed for cash. Obviously the more expensive the house the more valuable a reduction becomes.

Agency Agreements

As explained above agents may charge different terms according to whether or not they are the only agency selling the property. The different kinds of agreements are as follows:

Sole agency This is where you use one agent only and in exchange for excluding the competition they will generally charge you a smaller commission - usually between 1-2%. The advantage is that if the agent does sell it for you it will save you money, the disadvantage being that you are then stuck with the clients of that agency.

Joint sole agency This is an odd concept. Some agents will agree that two different agents will try to sell your home and will then split the commission - whichever of them sells it. Commission here is around 2-3% but it gives you a slightly wider range of possible buyers.

Multiple agency Here you use as many agents as you want to. The one that makes the sale will take the commission. This means that there are a large number of agents trying to sell your house, and also to sell it before any of their rivals do, the disadvantage is that you will be charged more - usually around 2.5-3%.

Some estate agents will agree to a period of sole agency and then if they haven't sold the property in that period you can then have a multiple agency agreement on lower terms.

Other factors that you should consider are:

Lastly, when you meet an agent your personal impressions are important - don't employ an agent that you wouldn't be happy to buy a property from yourself.

Make sure you get a written contract from the agent and that you read and check it before signing. It should cover:

And remember it is now a criminal offence for an estate agent to make false claims about a property.

Valuing your property

Get a valuation from more than one agent, and compare the valuations they give with other similar properties in your area that are for sale. If you aren't in a hurry to sell, you can start out with a higher price to see how things go - you can always lower it if you don't receive an offer. To see what properties in your area are worth, check details from other estate agents and look in local papers.

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