February 27, 2025
A Guide to Estate Agent Contracts
An estate agent contract is the negotiation you’ll enter when putting your market for sale on the property market. This is a legally binding agreement between you (the homeowner) and the estate agent you choose to go with.
However, before you enter this stage of marketing your property in your area, there are probably a few nuances that you want to keep in mind so that it’s a fair deal for everyone involved—and that is what we’re going to look at in detail today.
What Are the Different Types of Estate Agent Contracts?
Although it’d be easier to just have one contract for all properties, unfortunately, that’s not how it works—so here is every estate agent contract you need to be aware of when selling your home:
#1 Sole Agency Agreement
If you’re wondering what the most common type of estate agent contract is, it is definitely the sole agency agreement. This is where you use just one estate agent to sell your home and if they find someone to buy your home, they’re entitled to their fee. Yet, if you find someone to buy your home… not the estate agent, then you’ll be entitled to the full payout.
#2 Joint Agency Agreement
In this contract, you have hired two estate agents to sell your home and they’ve also agreed to the terms of how the commission will be split between them. With this technique, there’s obviously a better chance of your property being sold with double the exposure… ultimately meaning higher fees.
#3 Multi-Agency Agreement
In this agreement, you’re basically handing over the job to multiple estate agents to sell your home at once. Whichever estate agency is the one that gets the final buyer will be paid the commission (winner takes all)… but there’s a slight caveat. As there were more agents and more competition, you can expect them to charge more due to the difficulty of the job.
#4 Sole Selling Rights
Sole selling rights is similar to the sole agency agreement in which you just use one estate agent to sell your home. However, you have to be careful with this one, because even if you find the buyer of the home (not the estate agent), they’ll still be entitled to their fees.
#5 Online Estate Agent Contract
With an online contract, there are no fees—they just charge a flat fee based on the house price. However, if they don’t sell the property, they don’t gain that flat fee; it’s purely based on performance. Online estate agents are great, but you’re definitely losing out on that human element… especially when the buyer is going to view the property.
#6 Ready, Willing, and Able Purchaser Contract
This is a contract that you do not want to accept if an estate agent offers it to you. It essentially means that if the estate agent finds a ready, willing, and able buyer, they will be entitled to their fees… even if you decide not to sell or it falls through.
Estate Agent Fees to Look at
Contracts are not the only factor you have to look at when you’re selling your home with an estate agent because fees are too. Of course, the estate agent has expertise and if they do their utmost best while finding potential buyers (that go through), they have to receive something—it’s their job.
However, there are definitely different fee structures that you may want to take a look at before deciding on your estate agent:
| Fee type | What is it? |
|---|---|
| No sale, no fee | The estate agent only gets their agreed fee if they sell the property (fees can vary depending on the estate agent). |
| Flat fee | Estate agents will agree on a flat fee for selling the home for all of their services (make sure it’s only if the home is sold). |
| Sliding scale agreement fee | If the property price increases, their fee will go up (incentivising them to sell for a higher sale price). |
Some key factors to note when looking at estate agent fees:
- Make sure your estate agent sends you their commission or fee + VAT
- You should do your own calculations to see what you’re paying when you sell your property
- The lowest fee doesn’t always mean you’re getting the best estate agent for the job (you could lose money in opportunity cost if you get a bad agent)
Estate Agent Fees Calculator to Use
To calculate exactly what you’re going to be paying in estate agent fees, use this calculator to find out what your final cost is!
The Rundown on Contract Terms
Throughout the contract, you will find that there will be a few standout terms that you’ll need to consider in detail, including: length of the contract, tie-in periods, and notice periods. Let’s take a look at these in closer detail so you can get a grasp of what it means:
Length of Contract
This length of contract determines how long you and your estate agent will be working together. It is not uncommon to see estate agent contracts up to 26 weeks, but the most common timeframe is about 12 weeks. You should carefully look at this and negotiate if you feel as though it may take longer.
Tie-in Periods
A tie-in period within an estate agent contract is similar to the length of contract, but is also a time period that you have to stay with the chosen estate agent (being tied-in). Tie-in periods can typically last anywhere from 2 to 20 weeks, so make sure you’re choosing the right estate agent before you tie yourself in.
Notice Periods
Notice periods are essentially exactly how long you have to give the estate agent before you decide to move on to another one. You must (legally) give your estate agent 28 days notice before this occurs, but make sure it aligns with all your contract terms.
Estate Agent Contract FAQs
In short, yes, estate agent contracts are legally binding, meaning if you use an estate agent or multiple estate agents, you will need to sign a ‘legally binding’ contract.
As to whether or not you can cancel an estate agent contract, it depends on your terms. However, you will typically have to give your estate agent 28 days notice before you cancel the contract, unless your contract terms are keeping you tied in for longer.
A lot of estate agent contracts in the UK have a cooling off period, yes, but this can still depend on the estate agent you decide to go with. A cooling off period is essentially where you’ve already signed the contract, but you get time to decide whether you’ve made the right decision or not.
Cooling periods are usually 14 days long, meaning you have 14 days to choose whether you want to terminate the contract if selling the property is not the right decision for you right now, or if you want to go with another estate agent.
Liam is the founder of Liam Gretton – Wirral Estate Agent and has a vast experience in both buying and selling homes on the Wirral. His expertise has led him to become one of the Wirral’s leading estate agents.
