The acronym FSBO stands for FOR SALE BY OWNER

 

 

 

 

Can I use an agent as well?

Am I committing myself if I advertise privately?

It is your prerogative to use an agent or not as you wish and you are free to use an agent and to simultaneously advertise privately but you need to be aware of the legalities of any agreement you sign with the Agent.

Agents can have one of four different types of agreement with sellers. These are:

‘Sole selling’
This agreement means your estate agent is the only legal entity with the right to sell your house. If you find a buyer yourself, you’ll still have to pay the agent. Even if you do not decide to sell your property privately this is an unwise choice as it means you would have to pay this agent even if they do not perform and the property is sold through another agent. You would have to pay TWO commissions!
‘Sole agency’
This (more common) agreement also means the estate agent is the only agency with the right to sell your house but if you find a buyer yourself, you won’t have to pay the agent. It just means that you are agreeing to use only that one particular agency. Your estate agent can only claim a commission if they introduce the buyer and sell your property. Be aware though that if you instruct another agent for any reason such as non-performance of the first agent you need to formally end the prior agreement because the first agent can still claim a commission if another agent is instructed during the period of sole agency and the second agent then subsequently sells your property. Two commissions again! Most importantly a ‘sole agency’ agreement does not prevent you from selling your home privately as long as any other sale does not involve you (or other persons acting on your behalf) acting as an estate agent as defined by the OFT.
‘Multi agency’
A multi-agency agreements means that you are free to choose several estate agents to sell your house simultaneously if you wish but you only have to pay commission to the one who sells it.
‘Ready, willing and able purchaser’
A ‘Ready, willing and able purchaser’ or ‘Ready, willing and able to buy’ agreement allows the estate agent to charge commission if they introduce someone “ready, willing and able to buy” your home. A ‘Ready, willing and able purchaser’ is a form of contract between you and the agent whereby if the estate agent finds you a buyer “ready, willing and able” to buy your property and in a position to enter into an immediate sale agreement you must pay the commission or fee regardless of the outcome. Under this agreement if a sale does not go through for any reason the estate agent is still able to claim commission regardless once they have introduced a prospective purchaser who is prepared and able to buy your property and is able to exchange unconditional contracts. If you later withdraw from the sale you still have to pay the agent. Sometimes this clause is found in a place in the agreement you would not expect to look such as in the section describing when commission is payable. The Consumers Association strongly recommend that you do not sign any contract containing the ‘Ready, willing and able purchaser’ clause or other wording with the same meaning. Remember, you still have to pay even if you withdraw from the sale or it falls through and unconditional contracts are not exchanged.

In summary, you should always check what sort of agreement an agent is offering before signing with them if you have any thoughts of selling privately. Most people sign ‘Sole Agency’ or ‘Multiple Agency’ agreement. Both of these allow you to sell privately and if you sell privately then you do not have to pay any agency commission. If you have signed a ‘Sole Selling’ agreement then you will not have the freedom to sell privately. You may advertise the property alongside the agent but the agent gets the commission come what may. Check your agreement.

‘Sole selling’ Agency commissions will be payable:

 

‘Sole agency’ commissions will be payable if:

Most Private property Sale sites take care not to act in such a way as to conflict with a ‘sole agency’ agreement and therefore you are free to use Private Sales Websites even if you have signed this sort of agreement with an agent. In some cases the very mention of a private sales effort is enough to dramatically motivate the agent! It may help to motivate them more if you remind them that if a new buyer comes through the website then you will not pay them commission.