Another Estate Agents claim for fees knocked back!

jimc_2

I've searched through here but haven't seen this reported on MSE yet.

According to Estate Agent Today, another case has been judged with reference to the Foxton's case as a precedent and the result was the same (but different).

According to the EAT, the Ombudsman ruled that it was not enough for Estate Agents to have introduced a buyer to a property, but they should also have introduced the buyer to the vendor to earn their fee.

In this case a househunter registered with an Agent on September 1st and a viewing was arranged 2 days later to take place on the 15th. In the meantime the vendors cancelled the instruction on the 10th.

The frustrated purchaser promptly went around and knocked on the door to enquire if the house was still for sale. It was, and the buyer went on to purchase it privately. The property did not have a For Sale board outside it but was advertised online.

In time-honoured tradition, the Agents put in a bill for £14K, but this time the seller reported them to the OEA who have just ruled in the seller's favour.

The difference in this case is that the first case (Foxtons) merely had the fee re-allocated to another Estate Agent; this time the vendor did not have to pay any Agent at all!

chickmug

But what are you saying that the EA should be paid or should not be paid?

jimc_2

Chickmug - I'm not making any judgements here. I'm only reporting what could be a landmark ruling for Private Sales because many time in the past, an EA has seen a private sale of one of their listings and retrospectively tried to submit a bill for a fee (and often succeeded.) Some national chains are reported to have a department looking out for sales of properties that were once on their books to try this.

This is the first time the Ombudsman has defined a minimum amount of effort the EA needs to put into the sale (and raises huge question about the Agents who continue to just hand out details and never do anything else, such as accompanying viewings. (A common practice in my experience "Sorry there's no-one available to go with you. Just call the seller and arrange a time." - "You want to view on a Sunday? Are you mad?" - "We don't work evenings." etc.)

jimc_2

One very interesting part of the article is this quote from the Ombudsman:

"If agents do all that (detailed recordkeeping of INTRODUCTIONS and subsequent actions, not just who registered with them), I am likely to find in their favour. But if someone walks into an agency and expresses interest in 14 Acacia Avenue, picks up the particulars and is taken on a viewing, and the agent does no more than that, and the applicant subsequently goes on to purchase after a reintroduction from another agent, I am not likely to be sympathetic to the first agent’s claim for a fee.

“After the Foxtons case, it is vital that agents show they have introduced the buyer to the sale.”

SquatNow

In other words, estate agents are now expected to actually DO something if they want to get paid.

lynzpower

the difficulty will be when the vendor ( and there are plenty like this) who wont want to be in and will want the EA to handle viewings while they are out.

chickmug

jimc wrote: »

Chickmug - I'm not making any judgements here. I'm only reporting what could be a landmark ruling for Private Sales because many time in the past, an EA has seen a private sale of one of their listings and retrospectively tried to submit a bill for a fee (and often succeeded.) Some national chains are reported to have a department looking out for sales of properties that were once on their books to try this.

This is the first time the Ombudsman has defined a minimum amount of effort the EA needs to put into the sale (and raises huge question about the Agents who continue to just hand out details and never do anything else, such as accompanying viewings. (A common practice in my experience "Sorry there's no-one available to go with you. Just call the seller and arrange a time." - "You want to view on a Sunday? Are you mad?" - "We don't work evenings." etc.)

Hi Jimc

I guess I feel too prickly because of all those who have ripped me off (sellers and buyers) over the years. These experiences forced me into SSR only so those lacking in integrity spoilt it for those with integrity. This applies to buyers, sellers and us EA's. I guess, in the case you outlined, it was SA contract with the EA so the seller can sell privately.

I know, from your past posts, you are very sensible seeing all sides point of view. I guess I post to try and give the other sides (EA's) point of view. When we agree to act we do start incurring real costs and time commitments and want a fair chance to recoup some of this by dealing with honest people.

jimc_2

Hi Chickmug,

I also know from your posts that you represent the "acceptable face of Estate Agency" and will not be troubled by this ruling. The only Agents who need to worry are those who regard themselves as deserving a fee at the slightest pretence. I know from dealings with the OFT that there have been official representations that Agents should get a fee if they even suspected that the buyer MIGHT have seen one of their 'for sale' signs. The legal onus has been on the seller of the property (or agent of the sale) to prove they DIDN'T.

(If this sounds far-fetched to other readers, this has actually happened and previously the Agent had won the case.)

This ruling swings the balance back more to common-sense and should not trouble those Agents who act in their customers best interests.

loofer

To an extent I agree with the Ombudsmans ruling but I think there should have been some fee paid.

Have not read the details of the case from your link but I would assume the the EA

• took some time to register the details of vendor and property
• produced property information sheet
• put up a sale board
• paid for advertising in local property pulll-out/paper
• paid for advertising online such as rightmove

All the above could have incurred minimal time/cost. The problem arises from trying to quantify how much this can attribute to a fee.

We may never know this but it's possible that the buyer may have never known about the property had an EA not advertised it.

I'm not pro EA... but I just think it could be slightly unfair:o

This could lead to EAs now forming water tight contracts with menu based pricing/sliding scale fee or further conditions if you no longer stick with them.

vet8

Reading this thread, the bit I find amazing is the idea of EAs accompanying buyers on a house viewing.

Eh?? What's that??

Every time I have sold a house and I have sold 4 now and every single time I have viewed houses for sale which must mount up to dozens, I have never been accompanied by an EA. In fact as the vendor the EAs I have used (several different firms) have never even offered to accompany buyers.

It amazes me they have the cheek to charge what they do.

jimc_2

chickmug wrote: »

When we agree to act we do start incurring real costs and time commitments and want a fair chance to recoup some of this by dealing with honest people.

I totally agree with this and think the ruling has gone a step too far if the Agent didn't have the normal 'severance payment' clause in their agreements to cover these costs and the work done so far. I would have thought this to be perfectly reasonable but I have no idea whether this was the case or not here.

If the Agent did get a payment for services carried out up to the date of the ending of the instruction then I have no problems with it.