Estate Agents fees!

collywoo

Hi, I am in a quandry! We have agreed to part exchange for a house that was to let. We agreed to pay the vendors legal fees. He has had an offer of £10k more than we are paying but he has agreed to stay with our arrangement if we pay the EA fees so he gets a nice round £100k and our old house. The EA is acting as his letting agent and the house is occupied until March. Anyway, the agent has proposed a fee based on 1.75% of the higher offer plus VAT. I think this is high as he has only had to value the house and show us around in about 7 minutes! He has not had to market it or produce particulars. Would you haggle and if so how low would you go?
Thanks

pie81

I would have thought that if you agreed the sale before the vendor instructed the EA to sell the house, then it is a private sale (i.e. not introduced through the agent) and there is no need to instruct the agent at all or pay him any fees. The EA is chancing his arm and trying to get "retrospectively" instructed on a deal which has already been agreed.

That is, unless there is a term in the letting agency contract which says the EA can charge a fee if the house is sold. is there such a term?

googler

Have you agreed to pay his EA's fee? If so, did you do so without checking what the fee would be?

You're not really in much of a position to haggle with the EA - the EA will have a contract with the seller, and you've made an agreement (I assume) with the seller to re-imburse him for what he pays his EA.

googler

pie81 wrote: »

I would have thought that if you agreed the sale before the vendor instructed the EA to sell the house, then it is a private sale (i.e. not introduced through the agent) and there is no need to instruct the agent at all or pay him any fees. The EA is chancing his arm and trying to get "retrospectively" instructed on a deal which has already been agreed.

..or the house was actually marketed for sale by the EA, but the OP hasn't told us....

Doozergirl

The fee should be based on the purchase price. The vendor must be happy with your price otherwise he wouldn't be accepting it. I wouldn't be paying for a fee on a price that the house hasn't even sold for.

I've just paid 1.1% + VAT. It does seem a bit odd to be negotiating backwards though - surely their price was already agreed with the vendor?

pie81

googler wrote: »

..or the house was actually marketed for sale by the EA, but the OP hasn't told us....

agreed - I assumed that no EA would market a place for sale without having his fee agreed first!

In short, if the EA has already been instructed to sell by the seller, then I'd expect the fee level to have been agreed, and there will be no room to haggle from that agreed level.

If the EA has not already been instructed to sell (as suggested by OP's post) and did not introduce the OP as buyer, then it's too late for the EA to get in on the act now.

OP, which is it??

Fire_Fox

Why are you paying the fees and not simply a higher price for the property? IIRC from other threads that can be viewed as tax evasion.

collywoo

The EA was acting as the Landlords (seller) letting agent as the house was on the market To Let, we asked the EA if the Landlord wanted to sell the house as it was ideal for us, we also said we'd pay the EA fees for the seller seemed fair as he did not have the house up for sale.

Fire_Fox

It should be in the contract between estate agent and vendor what the arrangements are if the house is sold to a tenant (or possibly potential tenant).

pie81

collywoo wrote: »

The EA was acting as the Landlords (seller) letting agent as the house was on the market To Let, we asked the EA if the Landlord wanted to sell the house as it was ideal for us, we also said we'd pay the EA fees for the seller seemed fair as he did not have the house up for sale.

So the EA has not been instructed to sell by the owner and has no contract with the owner to sell on his behalf? In that case I'd be arguing there is no fee payable.

Did the EA do anything else like negotiate the price etc?

collywoo

No negotiating on the price. just asked his client if he would consider selling the house. would the solicitor know whats is in the contract between the agent and his client?