When it comes to selling property, there are a few options that offer themselves to you as a professional executor.
What I wanted to do, is just take a moment to explain them to you.
Sole Agency:
This is a legal agreement between the seller (in this case the executor of the estate), and the estate agent in which a contract is signed to confirm the agent will be the sole representative of the property for a duration of a specified period of time.
The estate agent has a responsibility to ensure they market the property in the best possible light, whilst adhering to the Estate Agents Act 1979, which governs how offers are handled, and the transaction is managed.
On average, a sole agency period is anywhere between 12 and 16 weeks in length, with an additional notice period of 14 days.
If you as the seller introduce a buyer via another estate agent during this period of sole agency, the agent to which you have the agreement will still be entitled to their fee – meaning you may well end up paying two fees.
Pros:
Usually, a sole agent will cost you a seller fee of anywhere between 1%+VAT and 2.5%+VAT, depending on where in the UK the property is located. This is cheaper than signing a multiple agent agreement, which will cost on average between 2.5%+VAT and 3.9%+VAT.
With only one agent there is only one point of contact – meaning communication should be easier than handling multiple agents at the same time.
If you introduce a private buyer there is no fee.
Negatives:
The coverage of the one, sole agent is limited meaning a positive purchaser may not even be made aware the property for sale is available.
There may well be potential purchasers that have had a negative experience with the agent and refuse to have any dealing with them.
With less potential buyers there are less people to negotiate with, meaning there is less chance of achieving the highest price.
If you are tied into a contract this could lead to complacency from the agent, who you are then bound to by the terms of the contract you signed.
Multiple Agency:
This is a much more relaxed agreement in which you can have more than one estate agent representing you.
In most cases you simply sign an agreement that says you are agreeing to pay that estate agent should they find a buyer that exchanges contracts to purchase the property.
There are cases where you will be asked to list the other agents, but this is very rare and can usually be negotiated out from.
Pros:
As there is rarely a tie in period, you have the flexibility to add and remove agents as and when you like.
Wider coverage means a greater number of potential buyers that can be introduced to view.
Negatives:
It can get very messy. If a viewer doesn’t like the agent they were introduced to the property by and offer through another, you could end up being held to paying two fees.
It can take a great deal of time to speak to all the agents, especially if they are not so forward coming in their communication with you.
Many agents look at multiple agency as a bit of a lottery – they may win, they may not. As they may not, they limit their time and budget with the marketing.
The fee is excessive. Between 2.5%+VAT and 3.9%+VAT is a lot of money!
There is also Joint Sole Agency which is incredibly rare as there are no real benefits to this option.
It is more expensive than a sole agency, there is still a tie in period, and if the agents are not fully working in tandem then it can become incredibly difficult to manage them with the time you have as a professional executor.
Sole Selling Rights:
A lot of people do not completely understand what this means.
Unlike Sole Agency, you are not entering an agreement to have just one estate agent represent you for a set period or run the risk of paying two fees. With Sole Selling Rights the agent is entitled to the selling fee when the property is sold, regardless of who sold it, including if a family member or friend purchases it.
Pros:
The Sole Selling Rights agreement should have a time period contract, very much like the Sole Agent agreement.
Negatives:
You are tied into the agent completely during this time.
Even if you introduce a buyer, the agent will be entitled to their fee.
The agent could become complacent. With no threat of losing the fee to another party, they have less drive.
If a family member decides to purchase the property, or a neighbour even, you are still obliged to pay the agent fee.
When we established PLG, Helen and I reviewed every method of sale that was available at the time. We even tried a couple of new ideas that we thought would work – after all, you will only find a better way of doing something by trial.
What we found was the following.
Online Agent:
In short, it did not work. Even though we were using Rightmove to advertise the property, we were still not attracting the audience required statistically to fulfil our promise of achieving the best price.
For the interest that was generated, we then had to employ outside representatives to conduct the viewings – which was not straight forward to orchestrate and often resulted in zero feedback that we were able to offer to our clients after the viewings had taken place.
Fee Free:
This was a method we trialled to coincide with the online agent approach.
With the property on Rightmove, we would advertise an ‘Open House Event.’ There would be dates and times provided with an invitation for local buyers to come and have a look.
All viewers were made aware prior to the viewing that they would be responsible for paying the sellers fee which matched our usual selling fee.
The primary problem with this was that buyers either did not have the finances available to them to proceed with this process, so immediately eliminated the subject property, or if they did, they would look to reduce the property by as much as possible to cover this unusual additional cost. So, the asking price was almost never achieved – and to make matters worse this was the method that we found we received negative reviews from our clients.
Thankfully we are a transparent company, and when we first launched these ideas, we discussed them with a couple of our clients.
It was agreed that we would try these new initiatives with specific properties where the beneficiaries were spoken to and explained what we were suggesting. When we saw that neither of these options achieved the offers, we knew they should have based on our previous success with the same property type within a 5 mile radius, we switched back to our ‘Traditional Property Sales Approach’, which then saw the results everyone was hoping for.
Our clients were happy, and the beneficiaries were happy too.
5 years later, and PLG have evolved even further.
We work with The Law Society writing leadership articles where we provide advice and guidance for its members on matters related to probate property problem solving that meets the requirements set out within the SRA Guidelines.
Everything we do to support our professional clients is with these guidelines at the forefront of who we are and the service we provide.
This not only safeguards our legal clientele, but also guarantees the beneficiaries of every estate we are involved in always receives the best price for every property we work on, whilst keeping all related fees to a minimum.
To find out more about how PLG work, please visit www.theplgroup.co.uk or email the team on info@theplgroup.co.uk
Darren has been working within the property sector for over three decades and is considered by many to be a pioneer within the industry.
In 2014 Darren created and introduced a number of services designed specifically to assist legal professionals with the property part of probate.
These services act as a way to ensure the solicitor is kept compliant as per the guidelines set out by the SRA, whilst guarantees the estate itself receives the highest level of care throughout the process.
Contact Darren by:
Email: darren.leggett@theplgroup.co.uk
Phone: 07510 529710
https://www.linkedin.com/in/darren-p-leggett
