Estate Agent 'Introduction' and Commission

MHawk01

Hello,

I am in the rather fortunate position where I have received an offer for my house.

The house is being marketed through an Estate Agent (Agent X) who have made use of all the typical methods to promote the property - internet advertising, local news advertising, For Sale board etc.

The other day I received a knock on my door from a family who live a couple of houses behind me in a neighbouring street. The family said they would like to view the house, to which I agreed. After viewing the house they said they were very interested and would like to make me an offer.

The next day I received an offer from the family just below the asking price. After taking some time I verbally accepted the offer.

Now the interesting part, I have not informed Agent X and am unsure of how to proceed - are they due full commission in this case?

The terms of my contract with the agent say that I must inform them of any offer made by a buyer that has been introduced by them. In this case they did not physically introduce the buyer - who simply knocked on my door.

I am willing to concede that the buyer became aware of my property by way of indirect advertising - the buyer informs me that they saw the property on the agent's website - but the agent most certainly did not introduce the buyer to the purchase/ sale.

I have found a legal precedent where the decision made by appeal judges in the case of Foxtons vs Pelky-Bicknell (2008) deemed that the agent was not entitled to the commissoin fee even though they had originally “introduced” the buyer to the property.

The judges ruled that, for an agent to be entitled to claim his fee, he must be able to show that he has introduced the purchaser to the purchase and not merely to the property.

So the question is thus; is the agent entitled to any commission in my case or can I withdraw the property from the market, end my contract with the agent as soon as possible and proceed with the sale privately to walk away with maximum proceeds?? The buyer has said they are willing to wait until I have terminated my contract with the agent - the minimum contract period is 14 weeks of which there are 4 left...

All and any feedback would be most appreciated.

Thank You

Catblue

The agents are entitled to their fee. The buyers saw the ad on the agent's own website for God's sake. The agents' marketing led to the offer.

If I were your buyer and I got wind of any of this (and it sounds like you have already told them that you intend to defraud the agents), I would immediately withdraw my offer and put you down as someone who intended to try to gazump me just before exchange. After all, you are willing to screw over the estate agent, why would I think that you would treat me any differently?

And if the buyers are happy to see you defraud the agents then they are obviously dodgy types themselves and will be pulling some stunt just before they purchase the house from you.

MHawk01

I am asking this question because I did my research and found legal precedent which pointed out that 2 conditions MUST be met in order to satisfy the terms of the contract with the agent - I'm sorry, did you not read that part or did you get excited and reply before considering the entire picture/ inquisitive nature of the thread?

It said they must not only introduce the buyer to the property, they must also introduce them to the sale.

I've reiterated that just in case it wasn't clear.

Here's an idea - keep your emotions out of it, I was hoping for a mature/ professional discussion about the situation so please don't bother contributing anything more to this topic unless you can remain calm and logical. Are you an estate agent yourself per chance? If so, kudos on your profession's own contributions to the current climates we find ourselves in :money:

Anyway it would seem the problem is moot - I have found a clause stating that the client is liable to pay remuneration to the agent if a purchaser first introduced by the agent (which I concede) during the agreement goes on to buy the property within 6 months of the date the agreement ends.

So I guess that's that.

G_M

Is the contract you have with the agent a 'sole agency agreement' or 'sole selling rights' agreement.

If the latter, they can claim their fee however the buyer reaches you.

If the former, and the buyer has not registered with, or been introduced by, the agent, then no fee is due.

I would inform the agent you have found a buyer and are withdrawing from the market (but CHECK your contract carefully for any early withdrawal fee etc).

Inform your buyer you accept the offer on the basis that they came direct and have never registered with or spoken to the agent. Make clear that if subsequently it becomes clear this is not the case, you will pass on the agents fee to thebuyer.

MHawk01

Thankyou G_M - having read very carefully I believe this constitutes a Sole-Selling agreement and therefore there's not much I can do unless I withdraw from the agreement ASAP, complete the sale and hope they never follow up - but presumably they will keep abreast of property transactions in their area and become aware at some point.

I may well do as you suggested and just see how it plays out.

G_M

No. If it was a sole-selling agreement you will have to pay their commisssion. Yes they will find out. Asking the buyer, as I suggested above, to confirm they did not register with the agent is irrelevant in the case of a sole selling agreement.

MHawk01

Sadly it looks as though I'll have to pay up then. Oh well, at least (fingers crossed) I'll be selling the house!

Gwhiz

Can't work out if this is some trolling or you're a little bit scummy OP.

MissMotivation

I don't understand why you think it's acceptable to to try and avoid paying the EA their fee? You have freely admitted the Purchaser found your house by way of the EA's advertising.

The EA would have incurred costs in finding this buyer for you so it's unacceptable for you to try and get out of paying them.

I'm all for saving money but this is below the belt.

And before anyone jumps in with "well you're an EA you would say that" I suggest you read Moneybunny's thread where the agent WASN'T entitled to their fee and I advised her not to pay it.

The_Palmist

I think there's very little to gain here by trying to bypass the agents and for all you know you might just have to pay them anyway. This kind of thing is not new to EAs so I am sure they will have something in fine print to compensate for any buyers approaching you directly.

Just a thought, why not ring the EA and ask them what happens if a buyer finds you ?

Also do not forget that the deal is not over yet and the buyer might pull out.

Not worth the hassle in my opinion.

googler

MHawk01 wrote: »

I am asking this question because I did my research and found legal precedent which pointed out that 2 conditions MUST be met in order to satisfy the terms of the contract with the agent - I'm sorry, did you not read that part or did you get excited and reply before considering the entire picture/ inquisitive nature of the thread?

It said they must not only introduce the buyer to the property, they must also introduce them to the sale.

The Foxtons case was different in that one agent had listed it, then the owner switched agents, and a buyer came back who had viewed with the first agent. So the offer was made during the time in which the second agent had a sole agency contract, but by a buyer who viewed the property when the first agent had sole agency. In this situation the judge ruled that the agency claiming the commission should have introduced the buyer to the sale, not to the property.

Your situation is different. Your buyer saw the agent's own website, and made you an offer while the same agent still had sole agency or sole selling rights.