Help with EA contract!!

MoneyMoose

Hello,
As we are first time sellers, we have entered the murky world of estate agents with a little fear and trepidation after reading lots of horror stories (deserved and undeserved) about EA tactics etc.

Anyway, I have just received the contract, and mindful of the pitfalls, noticed a clause in it that states:
1.1. You will be liable to pay our fees and charges as agreed in each of the following circumstances if contracts for the sale of your property are exchanged to a buyer who was introduced to you:
1.1.2. after the expiry of the period in which we have sole selling rights but to a buyer who was introduced to you during that period (by us by another agent or by any other party including you) or with whom we had negotiations about the property during that period. In this case, we will only claim our fee if an offer has been accepted by you within 6 months after termination of our contract. Exchange of contracts may take place beyond that time limit.

Does this mean that if we terminate the contract, we have to wait six months before we can find another buyer just to make sure that we are not liable for their fees? Could they challenge any potential buyer by saying that it was possible that they saw it on the internet with them first?

Sorry for all the questions, but I just wondered if this was standard contract terms or should I be querying it (the cancellation term is 3 months with 2 weeks written notice - so it would be six month on top of this in total)?

:rolleyes:

ILW

If you are not happy with any of the contract, tell them to amend it or you will take your business elsewhere. Make sure you get any amendments in writing from a director.

Gwhiz

This was covered in the Foxtons (iirc) court case - outcome was tThose clauses are not really enforceable. I had an EA with same clause and as they could not find a buyer I terminated. About 4 months later got a buyer through another agent and agent 1 wanted commission. I told them to behave and they realised they did not have a leg to stand on.

The clause is mainly in there in case you terminate and then go with the buyer introduced to you by the agent before termination.

LandyAndy

Get them to change it.

My EA had a clause that said they were entitled to their fee 'upon the introduction of a buyer ready, willing and able to proceed' I told them to change it to 'upon completion'.

Similarly their standard contract length was 26 weeks. I had it changed to '10 weeks' and was glad I did.

googler

"Does this mean that if we terminate the contract, we have to wait six months before we can find another buyer just to make sure that we are not liable for their fees? Could they challenge any potential buyer by saying that it was possible that they saw it on the internet with them first?"

No, it just means that if you terminate with this agent, then sell the house within six months to someone this agent introduced, etc., that their fee will be payable. If you instruct another agent after this one, get the agents to provide a list of buyer prospects to the new agent and to you, so that there's no arguement about who they introduced.

They would have to produce 'something' which proves their entitlement to their fee; a record of a viewing, note of details sent to the eventual buyer, and it would have to be a proof that would stand up to independent scrutiny. Merely suggesting that eventual buyer 'saw it on their website first' doesn't count, in my view.

As other posters have suggested, you can demand/persuade/insist that the agent changes the contract, but there's always the possibility that they refuse to do so and you have to go find another agent - I don't know how keen you are on this current one, though.

Richard_Webster

DO NOT USE THESE AGENTS!

Note these words:

the period in which we have sole selling rights

.

That means you can't sell privately. A sign of an unscrupulous agent I'm afraid.

That said if you had a sole agency agreement with an agent it would entitle them to commission if you exchanged with a buyer introduced by them, within 6 months. That isn't so awful. If you do change agents you ask the agents you are going to sack for a list of the people that they consider they have "introduced" and then provide that list to the new agents with a clear instruction that they are not to have negotiations with any on the list but refer them back to the first set of agents.

If the first set of agents won't give you a list after you have asked for it in writing (keeping a copy) then it will be that much more difficult for them to argue that a person was introduced by them!

And if they are confident that they can sell the house why do they need 3 months? Or have they overvalued the property to induce you to use them secure int he knowledge that after a few weeks they can advise you to reduce the price. If they only had 4 weeks they might come up with a more realistic price in the first place!

chickmug

Richard_Webster wrote: »

DO NOT USE THESE AGENTS!

Note these words: .

That means you can't sell privately. A sign of an unscrupulous agent I'm afraid.

I am selling and having to use an EA and couldn't find one that would do it unless SSR -- even me with my background!!!!!!!!!!!!!!!!!

DVardysShadow

chickmug wrote: »

I am selling and having to use an EA and couldn't find one that would do it unless SSR -- even me with my background!!!!!!!!!!!!!!!!!

I am absolutely amazed. At a time like this, when there no agent on line property sites, that Agents with a physical office should drive business away.

chickmug

DVardysShadow wrote: »

I am absolutely amazed. At a time like this, when there no agent on line property sites, that Agents with a physical office should drive business away.

But it goes to show and me known, by my mates, as the tough coookie negotiator. I wanted to be with an EA in a very specific area and all EA's said SSR or they would not take it on and they meant it. Sods law that when I help out friends and get things swinging along and when it is me!!!!!!

However I did get a good rate, short tie in of two weeks & no nonsense agreement with possible commission claims if I was to deinstruct them. And after good rates of viewers for a few weeks and sale now agreed after four weeks.

I must add when I was running my own business I would NOT work unless SSR so can't really whinge but feel it may be area thing?

googler

Richard_Webster wrote: »

DO NOT USE THESE AGENTS!

That means you can't sell privately. A sign of an unscrupulous agent I'm afraid.

Why is it a sign of an unscrupulous agent?

Brownie1970

two points,
1. sole selling rights are not the sale as sole agency agreement. this basically means that regardless of where a buyer comes from, you have to pay this EA.
2. if you went for a sole agency agreement it is perfectly reasonable to expect to have to pay an agent if they introduced a buyer to your property who eventually buys it. (the property ombudsman agrees that six months is the limit). however, with sole selling rights this seems very unfair.
Suggest you approach and estate agent that is a member of the NAEA (national association of estate agents) they have to abide by a code of practice.
Hope this helps, good luck with your move
AB, MNAEA
(estate agent with 23 years experience)