Try to dodge EA fees - consequences?

Romani_Ite_Domum

Briefly, a colleague has had an offer on his house but the buyer suggested they went without the agent to save EA fees even though buyer had viewed through agent.( Presumably to get colleague to accept the lower offer.)

Told colleague he was crazy, (don't do it etc ) and EA would find out. So he is thinking of banking money and paying only if he has to.

Question is, colleague would be committing fraud right? Worst case he could be charged and end up paying back more than the £6K he would be saving? or am I being over dramatic?

Sisyphus

much as I don't have a high opinion of EAs .. the EA has done his job - found a potential buyer and made the introduction. I can't point you to the legislation, but I think it's contractual. Would probably have to pay up + court fees.

shell2001

Tell your mate to read his contract.

At the end of the day the EA introduced a buyer, lets face it the person offering a low amount gains EVERYTHING, he does not pay the EA anything its your mate who would be the fall guy.

real1314

So what's the deal the buyer is suggesting?
Knock off the fees and split the difference?

It's a *clever* move by the buyer. They save the value of half the fees, the seller takes the risk (or inevitable outcome) that the agent will sue them for the fees in full. Net result, the seller had discounted the house by half the fees to the buyer.

The buyer has no risk at all in this situation.

courtjester

It's not *technically* fraud unless the vendor lies to the agent about who he has sold the property to, but it's somewhat pointless - the agent WILL find out and send an invoice and if this is not paid, the agent WILL take the vendor to court.

The agents have a cast-iron case in contract and their case will not fail.

If the vendor is stupid enough to go along with their buyer's crass suggestion, they will end up the loser and can only make things worse if they attempt to conspire with the buyer to defraud the agent by lying.

If there is a delay in paying the invoice, the agent can invoke late payment interest charges (which may already be built into the contract anyway).

Agents get up to some pretty under-hand tactics, but this type of conspiratorial fraud cannot be condoned either. You enter an agreement, the other side satisfies the terms of that agreement, you get the property sold under the agreement, you pay the bill.

What part of fair and reasonable does your colleague not understand

Romani_Ite_Domum

real1314 wrote: »

So what's the deal the buyer is suggesting?
Knock off the fees and split the difference?

It's a *clever* move by the buyer. They save the value of half the fees, the seller takes the risk (or inevitable outcome) that the agent will sue them for the fees in full. Net result, the seller had discounted the house by half the fees to the buyer.

The buyer has no risk at all in this situation.

I have explained all of the above to said friend. He is desparate to sell after being on the market for 2 years. They have not finished negotiating yet. Basically as it stands they are £5K apart on price. EA fees are around £6K so buyer stands to gain more than half. Seller just wants to sell.

He is willing to take gamblebut keep money in reserve in case EA comes after him. If that happens he will then pay. I want to convince him that it could be much worse than that. Is there anyone out there in the business who would know the facts in this scenario?

plane_boy2000

The rality is that if the agent has had it on his books that long then he will want his fee! His contact will cover these situations and it will be clear that he will pay. He could suggest to the agent that if he reduces his fee then he could accept al ower offer? Agent may think that a sale = somthing rather than nothing.

If the sale did proceed without the agent then I guess the agent could contact your mates solictor and explain - this would probably either result in the agent being paid from the proceeds anyway, or it stalling the sale while resoloution is sought. The reality is it cant be that easy or else everybody would be doing it and all agents would be poor!

Daniel_B

A friend did exactly this, and had no problems at all.

They had to take it off the market, and waited a coupe of weeks, and then carried out the sale privately.

How would the EA find out exactly?

By the time they have, you won't be at your address will you.

I'm not saying I agree or that it is right, but I don't see any major stumbling blocks stopping your friend doing it.

Dan

btloptingout

Your colleague is on a loser....agents face this all the time and don't stand for this sort of nonsense.

They will have kept a record of the viewing and don't suppose they won't chase this up sometime in the future.

For heavens sake the negotiating gap is a mere £5K....be creative and bridge it, have a word with the agent and see if he is open for a lower fee for a quick confirmed sale (say £4.5k) then each party raises/lowers position by £2K.

ManAtHome

Been on the market 2 years, just wants to sell - apparently not if he's after an extra couple of grand?

Depends how bad things are in EA-land - probably wouldn't bother if houses are "flying off the shelves", but if "times is hard", well at least the buyer will be ok...

prutter

Daniel_B wrote: »

How would the EA find out exactly?

By checking at the land registry once the property has been sold.
As far as I'm aware this does happen.....