It’s In The Small Print: Understanding an Estate Agent Contract

Advice from Horton and Garton (Ad)
161 Chiswick High Rd,
Chiswick, London W4 2DT
020 8996 5120

Estate Agents need contracts with their clients, just as an individual will sign terms when working with a solicitor or when taking a mortgage, these contracts protect both sides but there are some key points to understand to ensure you have a suitable arrangement in place with your appointed selling agent.

Types of Contracts

Firstly, it’s useful to understand the types of Estate Agency Contracts that you’ll be considering. The most common type of agency contract is where you instruct one selling agent and have in place a sole agency agreement. However, it might be that after meeting with a few local experts you decide you’d like two or more agents to act on your behalf, and in these scenarios a contract will outline whether a fee will be paid only to the agent who is successful in finding a purchaser or whether it is split.

Fee arrangements

Just as there are several different types of estate agency contracts, there are also many ways in which the fees can be arranged.

The most common arrangement for estate agent fees is the “no sale, no fee” basis, where the estate agent only charges a commission if they successfully sell the property. There may be costs that a seller is liable for in the instance that they withdraw their property from the market, be sure to look for these in the contract and understand how this works as plans can change.

Some agents might offer a fixed fee arrangement where there is a pre-agreed flat fee for their services, again, be sure to understand at which stage it is payable. Other agents might offer a sliding scale fee structure, where the commission increases as the property sells for a higher price. This can incentivise agents to achieve a higher sale price.

Contract Length

Estate agent contracts in the UK can vary considerably, some agent agreements have standard contracts that cover 12 or even 16-week periods. It’s incredibly important for sellers to understand the duration of the contract they’re signing together with any clauses for extending or terminating the agreement early. Contract length is often overlooked by sellers but is an incredibly important aspect. Should your chosen agent fail to deliver, a very long contract can result in serious delays to selling.

Cooling Off Period

In the UK, estate agent contracts typically include a 14-day cooling-off period under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. During this period, clients can cancel the contract without penalties, though some sellers opt to waive this. It is incredibly important to understand the full terms of the contract as after the cooling-off period expires, the terms apply.

Key Takeaways

It is always best practice to have a proper contract in place with an estate agent to avoid discrepancies.

Agents who are confident in their ability to sell a property are usually willing to be flexible on their standard terms and should be confident in their ability to sell your property within a reasonable period, if priced correctly.

Estate agent contracts in the UK are legally binding documents; to avoid complications or potentially penalties, it is crucial to understand the contract’s terms, rights, and implications of cancellation before signing.

As always, Horton and Garton are available to discuss your plans to move, without obligation.


September 8, 2023

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