By Passing estate agent fees for renting my house

TerryTheTitan

We've been trying to sell our house for a bit with no joy. We mentioned the possibility of renting to our estate agents who introduced us to an incredibly nice family who are very keen to rent our place out but the estate agents want 8% of rent for the entire life of the tenancy without doing any management. The potential tenants have contacted us directly & we have signed an agreement for commission based upon selling but not renting. I've tried negotiating the 8% fee but they aren't budging on that (presumably there'd be VAT on top of that?)

Choices are: -

1. By pass estate agents & just rent directly (though not 100% sure about legalities of doing this)

2. Pay estate agent full fee of 8% (despite them doing nothing other than finding a tenant)

Any insight would be greatly appreciated

Werdnal

Before any effort at all is put into letting, have you a mortgage on the property? If so you will need consent to let from the lender. Some agree with extra clauses and costs, some refuse - check this before you go any further.

How much do you know about letting? They may seem like a nice family now - most tenants do at the outset. Have you/your agent done any credit/reference checks? Do you understand the legal obligations of becoming a landlord? Do you know about drawing up tenancy agreements, protecting deposit, your obligations on maintenance and repairs, how to end the tenancy/evict tenancts if the need arises? What about declaring your rental income for tax purposes?

I cannot advise legally hwere you stand on bypassing the agents fees, but if you are to become first time "accidental" landlords, you might be better signing up to a fully managed let with an agent, rather than diving blinding by yourselves.

DVardysShadow

Usually, an introduction is a flat fee based on the rent. I would suggest that you make your own offer. EA's fault for not agreeing terms up front - unless it is hidden in your sale T&C's. Your take on the fee you will pay is as valid as his take on the fee he demands.

TerryTheTitan

Werdnal wrote: »

Before any effort at all is put into letting, have you a mortgage on the property? If so you will need consent to let from the lender. Some agree with extra clauses and costs, some refuse - check this before you go any further.

How much do you know about letting? They may seem like a nice family now - most tenants do at the outset. Have you/your agent done any credit/reference checks? Do you understand the legal obligations of becoming a landlord? Do you know about drawing up tenancy agreements, protecting deposit, your obligations on maintenance and repairs, how to end the tenancy/evict tenancts if the need arises? What about declaring your rental income for tax purposes?

I cannot advise legally hwere you stand on bypassing the agents fees, but if you are to become first time "accidental" landlords, you might be better signing up to a fully managed let with an agent, rather than diving blinding by yourselves.

Some good questions there, thanks. Yeah, we'd be 1st time landlords, though these tenants came highly recommended as they've been renting via the estate agents for the last couple of years & when talking through the various fees (13% fully managed, 8% let only) the EA did say that you'd only need let only as they were such good tenants. As for tenancy agreements/landlords responsibilities presumably you can get alot if not all of this stuff from the internet?

I know it sounds a bit tight on the estate agents but I do think 8% of all rent forever is being quite greedy, for basically acting as a middle man & just introducing us to someone. I've tried to negotiate them down on this but they're having none of it.

In terms of the legalities - I've never agreed to any of their rental terms & the only contract I've signed is in relation to selling, which doesn't contain anything about renting. This all came about as I tentatively asked them about renting as a plan B whilst the main priority was selling!

mlz1413

Get the EA to write to you with what you will receive in your bank per month on each level of service as many do have to charge VAT so £595 rent to tenant could mean you receive £438 on the 8% service level.

Also ask how the deposit is held and how the inventory is conducted at start and finish.

This family paying there rent on time is great but ultimately you the LL are responsible for all the legal requirements; think gas safety checks and smoke alarms to name but two things.

As said before do ask your mortgage lender if they will allow you to rent before going any further.