What does this mean?

walletpains

Hope you guys can help. Sorry if I'm being dense!

I'm just reading through a contract I've been left by an EA, and found this:

"Where a purchaser exchanges contracts but fails to complete the purchase, we shall be paid our commission out of the deposit monies held by your solicitors within 7 days of the contract's completion date. If there is no deposit or the deposit is less than our fees you will pay the fees."

... So what are the chances of this happening? And exactly who pays?

Am I going to end up paying the EA even if the sale falls through?

Many thanks

sonastin

If the sale falls through before exchange, you won't end up paying the EA. If your buyer pulls out after exchange, the buyer will have left a 10% deposit with your solicitor - this clause lets the EA get their stake out of that deposit so you don't get the full whack. If 10% less whatever your solicitor wants less whatever you've had to forfeit on your onward purchase doesn't leave enough for the EAs fees, he wants his fee anyway. I'm guessing somewhere else in the contract it says that the fee is due on exchange of contracts and paid on or shortly after completion?

If it were me, I wouldn't accept this. Get it changed so that their fee is due on completion. If the sale falls through, they'll be working to get another buyer and they can get their fee that way. You'll have enough to worry about if you were trying to buy somewhere else and your sale falls through.

walletpains

Thank you very much So I was right in thinking that this wasn't normal?

It does state that fees are payable after exchange. Do you think they might be open to changing the policy?
I'll be upset if this EA turns out to be full of rubbish too, they're the 4th one I've spoken to and seem to have the best advertising.

Richard_Webster

The chances of a transaction not completing at all are very small indeed.

You would have to be really stupid to put down a 10% deposit and not complete, wouldn't you? The few cases I have come across where completion didn't happen it was because the seller behaved completely irrationally and it was he who defaulted rather than the buyer!

walletpains

Thanks. Yes it doesn't seem that likely but I wanted to make sure I was on the right track. I wouldn't want to sign something that I didn't understand!

timmyt

walletpains wrote: »

Hope you guys can help. Sorry if I'm being dense!

I'm just reading through a contract I've been left by an EA, and found this:

"Where a purchaser exchanges contracts but fails to complete the purchase, we shall be paid our commission out of the deposit monies held by your solicitors within 7 days of the contract's completion date. If there is no deposit or the deposit is less than our fees you will pay the fees."

... So what are the chances of this happening? And exactly who pays?

Am I going to end up paying the EA even if the sale falls through?

Many thanks

it means you should not have gone to that estate agent, sorry.

DVardysShadow

sonastin wrote: »

... If it were me, I wouldn't accept this. Get it changed so that their fee is due on completion. If the sale falls through, they'll be working to get another buyer and they can get their fee that way. You'll have enough to worry about if you were trying to buy somewhere else and your sale falls through.

I would really emphasize the above. If the buyer does not complete, IMO, the Agent should get nothing, because they have failed to suss out the buyer. And as property professionals, this is one of the things the Agent is better placed to do than a seller.

Any agent who tries it on with a clause like that is effectively admitting he is not a professional. Agree to get the clause struck out or go with another agent.