What to look for in a contract with an estate agent to sell a house

A friend has asked me to look at the agreement she has been sent by an estate agent and I really don't know what is standard or normal.


"5. Duration of Agreement

This Agreement shall commence on 11/03/2016 and have effect until 11/03/2017 or until the contracts for the sale of the property are signed, whichever is the sooner.

6 Termination of the Agreement

6.1 The Agreement may be terminated (without penalty) at any time with the mutual consent of the parties.
6.2 This Agreement may be terminated by either party by giving 21 days written notice.
6.3 This Agreement may be terminated by the Client where the Agent: (lots of stuff about bankruptcy)"

Clause 6.2 seems make all the other clauses redundant. If the the agreement my be terminated by either side, why put in all the other stuff? If the estate agent is doing a poor job, she can simply give him 21 days' written notice and give it over to another agent. Of course, she would pay the original agent the fee if he introduces the buyer.


"The Client shall:

· not dispose of the property through any other agent for the duration of this agreement and

· be liable to pay the Agent the agreed fees set out in clause 10, in addition to any other agreed costs or charges set out in clause 11 if, within the period specified in clause 7 of the termination of this agreement, contracts for the sale of the property are exchanged with a purchaser:

o introduced by the Agent, or

o with whom the Agent had negotiations about the property, or

o introduced by any other agent,

during the period of this agreement."

I am surprised that the fees are payable when contracts are exchanged. I would have assumed that they would only be payable when the contracts are signed and completed. Or does "exchanged" mean - signed by both sides?

"

10. Agent's fee

10.1.The Agent’s fee shall be


10.2 The fee shall be subject to VAT at prevailing rate at the time of sale (currently VAT is 23%)

10.3 The fee shall become payable on (the date the contract for the sale of the property is concluded)"

OK, so this probably answers the question above. It's odd that the fee is not specified. I will check with her why this is so.

It's getting very complicated to sell a house. Your friend should see what other auctioneers use as contracts nowadays. Contracts exchanged seems to mean after both have signed and each has their own copy. Of course it doesn't actually mean the house is sold, certainly not nowadays with so many people having problems getting to actual drawdown but maybe that has changed. I don't remember auctioneers getting the payment until the actual transfer of the property. And back in those times the auctioneer might have his entire fee in his booking deposit (not Dublin !)