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
Barn owls are among species that could be affected
charity appeal
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
Life and Style
food + drink
Arts and Entertainment
a clockwork orange, stanley kubrick
filmSony could have made a cult classic
Life and Style
fashionThe essential guide to all the designer Christmas sale dates
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
news... you won't believe how bad their skills were

Arts and Entertainment
Mark Wright and Mark Wright
tvStrictly goes head-to-head with Apprentice
footballPremier League preview: All the talking points ahead of this weekend's clashes
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas