What You Need to Know About Estate Agency Agreements
Managing property transactions for your clients, whether it’s a sale, purchase, or lease, often involves various terms and pre-requisites. To protect the interests of you and your clients, it is recommended that agents adopt the Estate Agency Agreement as part of the transaction experience.
An Estate Agency Agreement is a binding contract between you and your clients for the performance of estate agency work on their behalf. CEA has 8 Prescribed Estate Agency Agreements for the sale, purchase, and lease of residential property transactions.
In today’s feature, here are the things you must know about Estate Agency Agreement before you commence any real estate work for your clients.
1. Objectives of an Estate Agency Agreement
The agreement protects the interests of you and your clients by providing clarity to details in the property transaction including:
Start the process by first having a meeting with your clients to detail out the requirements, before drafting the agreement and sharing with them. Your clients may also review it and include any clauses that are mutually agreeable between both parties.
2. Exclusive vs. Non-exclusive Agreements
You’re advised to share with your clients the 2 types of Estate Agency Agreements – Exclusive and Non-exclusive agreements. Your clients can choose to sign either type of agreement, depending on their preferences and needs.
3. Terms of the Agreement
Under CEA’s Code of Ethics and Professional Client Care (CEPCC), you must explain to your clients the meaning and consequence of signing the Estate Agency Agreement. You must also give them sufficient time to read and understand the content, so that they can make an informed decision whether to enter into the agreement. Agents who fail to do so may be issued a warning letter, imposed with financial penalties and/or have their RES registration suspended or revoked.
You should highlight the following key terms to your clients:
As signing an Estate Agency Agreement is often one of the first touchpoints an agent will have with a client, keeping the above pointers in mind will help create a positive first impression of you as an agent who is professional and ethical. Do remember to spend some time explaining the terms of the 2 different types of agreements to your clients and encourage them to sign the one that best suits their needs.
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