Estate agent fees are often a topic of discussion, but there is one area that goes largely unreported: dual fees.
To help sellers avoid having to potentially pay two different agents for what ultimately boils down to one transaction, estate agents are being encouraged by The Guild of Property Professionals to take proactive steps to help protect vendors.
The organisation’s compliance officer, Paul Offley, says there are a few actions that the agent can take to ensure that the seller is not placed in a position where they may, unknowingly be liable to pay a fee to two agents for the sale of the property.
He said: “In the dynamic landscape of the housing market, where sellers often change agents in pursuit of their property goals, concerns may arise when a new agent claims to have introduced a buyer originally brought forward by the previous agent. This potentially contentious situation can be mitigated through clear communication, adherence to specific terms, and cooperation between all parties involved.”
To prevent dual fee liability situations, he advises that both property sellers and agents take the followoing advise into consideration:
Transparent terms of business: Agents should ensure that their terms of business clearly outline any ongoing fee liability should the client terminate the agreement. The terms should specify the length of such liability, which typically extends for six months from the date of termination when another agent is engaged or up to two years when no other agent is involved. Importantly, agents should engage in open discussions with sellers to ensure they comprehend the implications.
Comprehensive record-keeping: In cases where an agent’s services are terminated, they should provide the seller with a comprehensive list of potential buyers introduced during the period of their instruction. This enables transparency and aids in avoiding disputes down the line.
Information exchange: Receiving agents should inquire whether the property has been on the market previously and ask the seller for the names of any potential buyers they may have interacted with during that time. This exchange of information ensures that all parties involved have a clear picture of the transaction history.
Offley added: “It’s in the best interest of all stakeholders involved in a property transaction to work collaboratively to prevent disputes and foster a fair and transparent environment. It is worth reflecting on the wording used in The Property Ombudsman Code of Practice for residential sales that the definition of an effective introduction is that it must evidence that the agent carried out an act that initiated the buyer’s reaction to the property. As such there is a need for a defined transactional event to occur. This can be evidenced by that agent carrying out a viewing.”
