Selling with an agent, and what the fee actually buys

Most explanations of estate agents stop at the point where it starts to matter. This one carries on.

What you are buying

Marketing reach, photography and listing quality, viewing management, offer handling and progression of the sale through to completion. Progression is the part that varies most between agents and matters most in a chain. A cheaper agent who does not chase the chain can cost more than the fee difference.

Progression is a concrete activity rather than a quality, consisting of chasing each solicitor weekly, establishing the state of every link, and extracting a specific answer about the outstanding item, so it is fair to ask a prospective agent who does it, how often, and whether it is the same person you have been dealing with.

Agreement types are not interchangeable

Sole agency gives one agent the exclusive right to sell for a period, usually at the lowest fee. Multiple agency allows several and costs more, with only the selling agent paid. Sole selling rights is a stronger term than sole agency and can entitle the agent to a fee even if you find the buyer yourself.

On an ordinary week, the most expensive version of getting this wrong is paying two agents for one sale, which happens when a property is instructed to a second agent while the first retains a claim on a buyer they introduced, and it is the introduction records rather than the dates on the contracts that settle who is owed.

Read the tie-in and notice

A long tie-in with a long notice period can leave you unable to change agent for months. Both are negotiable at the point of instruction and almost never afterwards.

Asking for a shorter tie-in is normal and frequently agreed. The two commonly run consecutively rather than together, so a twelve-week tie-in followed by a four-week notice is sixteen weeks of commitment, and reading them as a single figure is how sellers discover they cannot change agent until well past the point they wanted to.

The clause worth checking

Some contracts entitle the agent to a fee if they introduce a purchaser who is ready, willing and able, whether or not you sell. That can create a liability if you change your mind after accepting an offer. It is worth identifying and, if possible, removing before signing.

On an ordinary week, it is not the only clause of its kind, since contracts also commonly provide for marketing or withdrawal costs, and for a fee if you sell within a stated period after termination to anybody the agent introduced, which is the term that catches sellers who change agent and then accept an offer from an earlier viewer.

Fees are negotiable

Percentage fees are quoted, not fixed, and reduce with competition and with a higher sale price. Fixed-fee and online models exist and shift the viewing and progression work to you. The right choice depends on how much of that work you can realistically do.

A percentage fee aligns an agent with a higher price only weakly, because the difference to them between two offers a few per cent apart is small while the difference between selling and not selling is the entire fee, which is the structural reason agents push towards accepting a deliverable offer rather than holding out for a better one.

Adjust the size of it until it is something you would actually do tired.

The referrals are a second revenue line

Agents commonly earn referral fees from recommended conveyancers, mortgage brokers and survey firms, and in several jurisdictions those payments must be disclosed either as a matter of course or on request. That does not make a recommendation bad, but it does explain the persistence of it, and a buyer told that an offer will be taken more seriously if they use the in-house broker should treat that as a sales technique and ask plainly whether it is a condition.

In practice, agents generally owe the seller a duty to pass on every offer promptly and in writing, which is worth knowing if you are selling and suspect offers are being steered towards buyers who also bought other services. The specific duties, disclosure rules and redress schemes attached to agency differ by country, and where an agent appears to have breached them the redress scheme rather than the agent is the place to take it.

The takeaway

Negotiate the tie-in and the notice period. The percentage is the least interesting number in the contract.

Small and repeatable beats ambitious and abandoned, almost every time.