Estate agents; terms and conditions

donaldfleming

An estate agent has forwarded me a contract.

It looks OK, apart from one clause:

"In the event of termination of this contract by the Seller, all outstanding marketing outlays incurred by the agents will be immediately payable along with a withdrawal fee of £150.00 plus vat."

Is this type of clause pretty standard, or is could it be construed as being excessive?

Mr_Thrifty

Sounds to me like you're bearing all the cost/risk of marketing, and they get to take all the commission!

adg1

A get out fee is normal to include in the Ts and Cs.

What you've been sent seems a bit heavyweight though. They are saying, basically, that they will market your property and charge you a commission if they succeed in arranging a sale, but if you pull out then you are liable for all their costs they have incurred.

At least you read the contract though as most people who post here seem to forget to do that.

Negotiation is the name of the game from here:

- negotiate for no withdrawal fee;
- negotiate for no marketing costs liability
- negotiate for a fixed term agreement (4/8/12 weeks etc) and ensure they end of that agreement is fixed and there is no penalty to withdraw.

Good luck

googler

The immediate outlays that occur to me might be

Sale Board - if this is installed by a sub-contractor, they'll expect to be paid, regardless of whether you sell or not.

Brochures/schedules/flyers - again, if these are sub-contracted, the contractor will expect payment regardless

Press advertising - payment will be expected regardless.

There may be others, but - if you cancel the contract, the EA won't get a sale, and won't get any commission on the sale, and the above still has to be paid.

Where would you suggest the funds to pay the sub-contractors will come from, if not by a termination or cancellation levy?

DVardysShadow

googler wrote: »

... Press advertising - payment will be expected regardless.

There may be others, but - if you cancel the contract, the EA won't get a sale, and won't get any commission on the sale, and the above still has to be paid.

Where would you suggest the funds to pay the sub-contractors will come from, if not by a termination or cancellation levy?

Fairly obviously from commission on successful sales. it always used to be this way. But it looks like the Estate Agents are going the way of bankers - ie rewarded for success and paid the same for failure.

googler

Try telling some folk around here that the commission on their sale has to be set to cover the sales that didn't complete, and these kind of expenses, and the answer tends to be "Why should I pay for this other stuff?" ....

By rewarded for failure, are you referring to the fixed-fee agencies who take their money upfront?

DVardysShadow

googler wrote: »

Try telling some folk around here that the commission on their sale has to be set to cover the sales that didn't complete, and these kind of expenses, and the answer tends to be "Why should I pay for this other stuff?" ....

By rewarded for failure, are you referring to the fixed-fee agencies who take their money upfront?

Yes, more or less. Agents used to take the risk of not selling and used to be convinced that they would sell that they would agree up front 'no sale, no fee'. And generally they did well.

But I suppose Estate Agency is changing, with some being little more than portals which effectively allow individuals to post their own properties on Rightmove and order a cheap HIP.