Residential Sales - Guidance and Information
If the agent holds the keys, agency staff should accompany those who are viewing and anyone else requiring access, unless the seller gives authorisation to the contrary.
An agent will offer appropriate advice, explanations and assistance to all regardless of age, race, religious belief, gender, sexuality, ethnicity, or disability. However, bear in mind an agent's duty of care is to his client.
Types of agreement the agent may offer:
- Sole agency which means that if contracts are exchanged with someone who your agent has introduced to the purchase, the agent will be entitled to the fee.
- Sole selling rights which means that if contracts are exchanged with someone who your agent has introduced or was introduced by another agent or with someone you yourself introduced during the agency period the agent will be entitled to a fee.
- Multi agency which means that you have instructed a number of agents and agreed that the agent who introduces the buyer to the purchase will be the one who is entitled to the fee. Note that multi agency fees are generally higher than for a sole agency.
- Note: Some agency agreements may include a 'Reading, willing and able' clause which means that if someone is demonstrably ready, willing and able to purchase your property (even if an exchange of contracts does not occur) then the agent will be entitled to a fee. The agent must evidence that the buyer was ready, able and, importantly, willing to purchase in order to claim a fee.
Ensure that you understand:
- The fee that will be charged and whether it is based on a sliding scale or a fixed amount.
- How long the agreement runs for; how you can terminate it and with what period of notice is required.
- Whether you will have any continuing liability to the agent for a fee if you do terminate the agreement.
- The options open to you regarding the preparation of the Energy Performance Certificate (who will supply it and the cost).
- The arrangements for boards and whether the agent will accompany all viewings or is expecting you to conduct some or all of them.
In particular you should:
- Understand that you when you sign the agreement you are entering into a legally binding contract under which you may be liable for fees.
- Ensure that you have read and understood the terms of the agreement and the commitments you have entered into. Do not feel pressured into simply signing it and be aware that if you sign the document in your home or at your place of work you are entitled to cancel it within 14 days.
- Make sure that you receive copies of all relevant documents such as the agreement, terms of business and the final sales particulars after you have approved them in draft form.
You are not required to use any associated service which is offered by the agent. You are entitled to use your own financial adviser, legal representative and surveyor. Refusal of additional services should not prejudice any offers or viewings made through the agent.
If the buyer accepts services offered though the agent, the agent must inform the seller in writing of those services.
Buying a Flat
When buying a flat the estate agent should provide you with information such as the level of services charges. Further information can be found in the TPO Code of Practice for Residential Estate Agents and here.
Duty of Care
An agent will always work in the best interests of their client, that is to say the person who is paying for the estate agency services (usually the seller). An agent should treat all those involved in the proposed sale or purchase fairly and with courtesy. If the agent or one of his staff has any personal or business interest in the property, this must be divulged as soon as possible in writing.
Energy Performance Certificate
The agent should advise the seller about his obligations to obtain an energy performance certificate, prior to marketing begining.
Buyers can ask to see the energy performance certificate for the property.
Fees and Charges
An agent must inform you in writing, before you agree to use his service, what fees (including VAT) are payable and when they are due. Fees must be clear and transparent.
An agent will ask sellers to provide proof of identity, as required by the Money Laundering Regulations 2007. Buyers will be asked for similar information, along with details of their funding for the proposed purchase at the point an offer is made.
Illegal / Criminal Activity
Allegations of illegal and criminal activity (e.g. fraud) should be referred to the relevant authority (such as the police) or regulators (such as Trading Standards) who are empowered to undertake enforcement action. The Ombudsman does not have regulatory powers and cannot consider allegations of illegal or criminal activity.
The Legal Representation
A licensed conveyancer or solicitor and will progress the formalities of the sale and determine with you the potential dates for exchanging contracts and completion.
The Mortgage Provider
If you require a mortgage to buy the property you may be dealing with a bank or building society, either directly or through an adviser. The agent is not allowed by law to give you any financial advice but he might refer you to an adviser with which he has links or which is a separate part of the same company. The agent will not have access to the records of the mortgage provider or adviser and has no control over the progress of any mortgage application.
The agent must describe the property as accurately as possible and not misrepresent the details.
Agents are legally bound under the Consumer Protection from Unfair Trading Regulations 2008 to describe a property truthfully and provide material information to allow potential buyers to make an informed transactional decision. Sales particulars should give a general description of the property and will highlight, for instance, the type of heating, double glazing installed, or appliances or furnishings that may be included in the sale. The agent will not have tested any facilities but if they are of particular importance to you it is wise to question the agent further and he can ascertain the relevant information from the seller on your behalf.
Negligence is a term with a legal meaning and only a court can decide if an agent’s actions or inactions were negligent. The Ombudsman cannot decide claims of negligence and cannot speculate on what a court may decide. Consumers should seek legal advice if they wish to pursue a negligence claim.
The agent must record all offers received and pass a written copy of the offer promptly to the seller. The agent must not conceal, misrepresent, withhold or delay communicating offers.
The agent should confirm your formal offer in writing to you and whether the seller has accepted that offer.
It is the seller who decides whether to accept an offer; to reject an offer; when to stop marketing the property after an offer has been made, and to whom to sell the property to and at what price. The agent can only guide the seller in this regard, it is not his decision. The agent is working for his client, the person selling the property.
As a general rule, estate agents should not take pre-contract deposits. However, in the case of new home sales, agents may take into account specific instructions from sellers. If a deposit is taken, then a written receipt must be given, and the circumstances under which the deposit is held and any interest accrued are refundable, must be clearly stated in writing. Unless the agent’s client has provided written authority, agents should not deduct any costs and charges from any client’s money. In Scotland, agents are not allowed to accept pre-contract deposits.
Role of the Estate Agent
He is instructed by the seller of the property but has a responsibility to treat any prospective buyer fairly. The agent is required to act in the best interests of his client. The agent will ususally conduct a market appraisal, draft sales particulars, ensure an energy perfomance certificate is in place, agree a marketing strategy and undertake viewings, whilst receiving and passing on offers. The agent has no control over the legal process but will generally assist in checking on the progress of the purchase and, if agreed, in handing keys over on completion of the sale.
'For Sale' Boards
The agent must ask if the seller wants a ‘For Sale’ board to be displayed and ensure that only one board of the correct size is displayed for each property. Boards must not be displayed in areas where they are not permitted.
Sale by Tender / Buyer Pays Fee
Sale by tender/buyer pays fee is an alternative commercial practice that has developed across the industry with a number of agencies employing it as a way of attracting business by offering sellers their agency services for reduced or zero cost fees. Under this approach the agent enters into an agreement with a seller to market a property whereby offers are submitted through a sealed bid/tender process. Prospective buyers submit their offers to the agent having entered into an agreement to meet the agent’s fee liability which is over and above the agreed price for the property.
The process whereby the agent asks all potential buyers to make a ‘sealed’ offer to be received by a certain date and time. The agent will ‘open’ the offers at the designated time and advise the seller accordingly. The seller will then choose which offer to accept. The seller and the buyer retain the right to withdraw from the purchase thereafter.
Survey and Valuation
The surveyor or valuer will be engaged by the prospective buyer or their mortgage provider and will offer various types of surveys from a general valuation report to a structural survey. Unless the mortgage provider specifies otherwise it is the buyers choice as to the type of survey undertaken.
Terms of Business
All agents must give their clients written Terms of Business. The agent must clearly explain all fees and charges and tell you if any fee will be payable if you withdraw your instructions to sell the property.
The agent must seek and act on the seller’s instructions about how viewings should be conducted. Reasonable notice should be provided to the occupants of the property, prior to the viewing taking place.