(house selling) Can you withdraw from an EA without any penalties?

lightspeed

Hi, Just a quickie.

When using an EA to sell your property, is there anything to prevent you from personally striking an agreement with a potential buyer and then withdrawing from the EA resulting in reducing costs (i.e. EA's cut).

Technically you would be using the EA for free advertising then denying them their cut.

Is there anything preventing you from doing this if you do do not feel that the EA has been effective?

I know that using EA's can be an effective way of selling a property, however, some are obviously better than others.

thanks in advance

silvercar

Normally you sign a contract when instructing an EA. Failure to keep to its terms and you run the risk of being taken to court.

Ian_W

Yep, it's called a contract and if you breach it the EA can [and almost certainly will] sue you for their fees, if they win you'll also end up forking out for their legal fees as well as the commission.

There are several different types of contract used. Usually they have a minimum length of time that you're bound to the EA for and a notice period if you want to end the contract after that time. Usually anyone they introduce during the contract will be covered even if you finish the contract and they buy afterwards. With a "sole agency" agreement if you genuinely find a private buyer who has no contact with the EA and sell to them you can avoid agents fees but you'd need to be very sure you can prove it's not through the EA's sign outside, advertising or other means connected to the EA marketing your property to be 100% safe.

EA's have been around a long time, if you could simply & easily use them for free advertising then renage on their fees they wouldn't be in business. There is nothing "technical" about what you're suggesting, it's pulling a fast one. I don't like people who try that in my line of business, I'm sure EA's won't, but ask yourself - would you? They have spent money on advertising and acheived what you've asked them to do - found you a buyer, then you try to wriggle out of allowing them to make a living.

If you believe you've had bad service, fair enough dispute their charges but with reasons, and if they're a member of the Ombudsman scheme, NAEA or other professional body complain to them as well. However, your OP sounds more like a "can I rip of EA's cos no-one likes 'em" scenario, than can I withold fees if I've had really bad service, IMO.

lightspeed

Is there not anything that protects the sellerin these contracts?

for example, if you bought something from a shop and were unhappy with this particular product you would be entitled to a refund within reason of course.

Surely at some point a seller may have a dispute with an EA, be unhappy with the amount of effort being put into the sale of a property and/or find the staff that show the property ineffective.

Is this instance wouldnt the seller be entitled to cancel the service and only pay the fee's incurred up to that point?

silvercar

Is this instance wouldnt the seller be entitled to cancel the service and only pay the fee's incurred up to that point?

You only pay if they find you a buyer who actually buys your home. There are no "fee's incurred to that point". No sale, no fee. A sale and full fee payable.

If you cancel the contract (within its terms) then you pay nothing, if the EA has introduced the buyer to you, you pay the full agreed fee.

Bossyboots

lightspeed wrote:

Is there not anything that protects the sellerin these contracts?

for example, if you bought something from a shop and were unhappy with this particular product you would be entitled to a refund within reason of course.

Surely at some point a seller may have a dispute with an EA, be unhappy with the amount of effort being put into the sale of a property and/or find the staff that show the property ineffective.

Is this instance wouldnt the seller be entitled to cancel the service and only pay the fee's incurred up to that point?

You last suggestion would of course be open to negotiation to end the contract and only the estate agent involved can answer whether they would be willing to do that.

However, that is not what you asked in your opening post and the answers you have received so far reflect that. If you already have a buyer that was introduced by the estate agent (as defined by Ian W) then the contract is met and the fee payable. If you are not happy with the service you might be able to negotiate a reduction in fee but in this scenario the contract has been performed so you may not have any scope to barter.

Bossyboots

silvercar wrote:

You only pay if they find you a buyer who actually buys your home. There are no "fee's incurred to that point". No sale, no fee. A sale and full fee payable.

If you cancel the contract (within its terms) then you pay nothing, if the EA has introduced the buyer to you, you pay the full agreed fee.

There may have been advertising fees for the local newspaper and the cost of producing the particulars given to prospective buyers so I wouldn't expect an EA to agree to ending a contract early without some remuneration. If the contract doesn't provide a break clause then this may be a non-starter but the EA may be happy for some payment to preserve any goodwill and perhaps even to get the seller off their books if they have become difficult.

In this position I would probably take the house off the market until the contract ends but the EA would still be entitled to their fee if the person buying the property was original introduced by the EA during the contract.

lightspeed

I am not actually selling a property so i am not intending to "pull a fast one". I am infact a buyer who has experienced a very poor level of service from an EA and has since contacted the seller directly (a process that has proved far more effective than dealing with an EA).

Firstly, communication has been terrible. IMHO, when dealing with any potential customer you should bend over backwards to ensure that the customer is satisfied and well informed.

Secondly,the EA has used an individual who was completely inappropriate and unprofessional for the particular job they were enlisted for.

Finally, i agree fully that you should treat people with respect and how you would like to be treated and would therefore never consider not paying for a service that has been provided to an acceptable standard, however, i was just curious to know what sort of protection there was for the seller in an instance like this.

This is something that came up in a conversation with the buyer (its not just me concering myself with something that doesnt involve me)

Thank you for all of the opinions posted

Ian_W

Apologies if my original response was, err, a little robust! However, the way your OP was written didn't explain your position very well, IMO.

The contract is between the vendor and EA, it's basically to find a buyer for the house. If the EA does that - they get paid, as BB has said the contract is fullfilled by the EA.

Your analogy with paying for a service that wasn't up to scatch is a little awry, you're paying the EA to introduce you to a purchaser and you don't [in most instances] pay anything until the sale goes through. If you went to a shop and bought a rather expensive item that worked perfectly but you received poor service from the assistant you'd complain to the shop and receive an apology, maybe a little more. I don't think you'd expect to get the expensive item for nothing or even cost, would you?

There are complaints schemes and even an Ombudsman for EA's, though they're not compulsary until 2007. They're also governed by legislation and I'm sure trading standards would also be interested in any breaches of these. But actually the place to complain both for you and the vendor is to the EA's themselves in the 1st instance.

david29dpo

we are not happy with our EA and intend to change. however i red the contract carefully before signing and all we need to do is give 28 day notice and thats it. conclusion, always read the contract before signing-!! we have also been asked by a possible buyer to ditch the agent saying they are useless, but this turned out to be only so the buyer could get the house cheaper by us knocking off the agent fees-!! which i would not do. lost the buyer but so be it,

AndrewSmith

David29dpo,

You also have to be very careful. Example , lets say you have given your 28 days notice and have passed that period. You have a new buyer through the new agents. However if the existing agents can prove that they originally introduced that buyer to you (ie viewed your house whilst still under contract with them, or requested details from your original agents) it is not unheard of for the original agent to take the seller to court and actually claim the fee.

That said (before a barrage of contradictory posts appear), it does depend on the exact wording of the contract you have, and what they class as an introduction. Just something to look carefully for in the contract or even have your solicitor look over for you (you are paying him after all, get him to quickly scan it for free. If you ask he should do it).

Although you may be told that this does not happen I have actually seen it on more than one occaision, and in most cases the Agents have won.

Hope this helps

Andy