One sale, two commissions: Estate agents have ways of ensuring their cut

FOR 37 years William and Thelma White lived in the same house in Gravesend, Kent, a pleasant three-bedroom end-of-terrace. Mr White worked as a decorator in the town, but when he retired in 1992, they decided to move to Crewe to be near their grandchildren.

They had never sold a house before - and after their experience they never want to sell another. They ended up paying not one estate agent but two, and it cost them more than pounds 1,600.

It all started simply enough. In November 1992 they put their house on the market with a local branch of Mann and Co, an estate agent with branches all over the South-east. After three months with no buyer in sight, Mr White took the house away from Mann and placed it with a Gravesend estate agent, Deo Gloria.

But a few days later Mann rang Mr White up - it had a buyer. 'We told them it was now on the market with Deo Gloria, but they said that didn't matter. So we said okay, send them around,' Mr White said.

The prospective buyer arrived with a Mann representative. The rep insisted Mr White sign a 'one-day agreement' before the buyer looked round and Mr White, who had never heard of such agreements, signed. That was to be his downfall.

The buyer liked the house and eventually bought it. But Mr White ended up paying Deo Gloria and Mann commission for the sale.

The reason lies in the small print of the contract Mr White signed with Deo Gloria and Mann. Both were 'sole agency' contracts, one with Deo Gloria for 12 weeks, the other with Mann for one day. This type of contract is common: it gives an estate agent the exclusive right to sell a house, usually for a specific time. It also gives it the right to claim commission if the house is sold through any other estate agent. Both Deo Gloria and Mann were entitled to their cut from Mr White - and he was forced to pay out.

So too was Martin Davies. In April 1992 Mr Davies put his house in Cambridgeshire on the market with the Woolwich. After a few months he took the house away from them and signed a sole agency agreement with Carter Jonas, which sells property all over the South.

Carter Jonas did a little better than the Woolwich. It sent a number of people round to see the house and one almost bought it. After that possible sale collapsed last summer, more than a year after they had first put the house on the market, Mr Davies resigned himself to staying put.

But in September Mr Davies received a phone call from his former estate agent, the Woolwich, asking if he was interested in a possible buyer. This led to a sale, and Mr Davies paid the Woolwich commission of pounds 3,525. When he wrote to tell Carter Jonas he was shocked by the reply.

Carter Jonas pointed out that since Mr Davies had never cancelled his agreement, it was entitled to its sole agency commission on the sale. Under threat of litigation, Mr Davies paid Carter Jonas pounds 3,237 - making his total estate agency fees pounds 6,762. Hardly surprisingly, he is very upset.

'There is no doubt we were in the wrong and Carter Jonas acted within its rights. We were naive and paid dearly,' he said.

But it is an easy thing to do. What house sellers forget is that sole agency contracts usually need to be cancelled in writing - and that it is up to the seller to do this. The agent has no interest in cancelling a contract when it has received no commission.

Mr Davies and Mr White assumed, wrongly, that estate agents are more like friendly advisers than commercial businesses. This is often the image - but it is the small print that matters most.

The sole agency contract is a perfectly acceptable contract for sellers - it is cheaper than the multiple agency contract and, unlike a sole selling rights contract, allows an owner the right to sell a house privately without paying commission.

But the best advice is to enter into it in the spirit of serial monogamy. Sign a sole agency contract for a definite, short period. Put in or strike out clauses to suit yourself (try negotiating for a smaller commission as well). And always cancel the agreement in writing at the end. Otherwise you, too, could end up paying twice.

David Berry works for BBC TV's 'Watchdog'

(Photograph omitted)

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Day In a Page

Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project