Same potential buyer "introduced" by multiple agencies

lorrainp

Your opinions on the following scenario please? I know it's a legal thing, but I'd just like to see what the consensus is.

Mr Seller puts his house on the market with Agent 1 for a few months. During that time, Mr Buyer views the house but doesn't make an offer.

Mr Seller later decides to switch to Agent 2, and de-instructs Agent 1. Three months after viewing the house, Mr Buyer contacts Agent 2 and says he'd like to view the house again, and explains that he had previously viewed it with Agent 1.

Both agents' contracts have standard wording saying that they are due commission on any sale to any purchaser introduced by them during their contracted period, or with whom they had "negotiations in relation to the property" during their contracted period.

Mr Seller is aware that both agents could potentially try to claim commission if Mr Buyer buys the house, so tells Agent 2 not to arrange a viewing while he figures out his position.

Really, I think Agent 2 should have told Mr Buyer to go back to Agent 1 to book his viewing, but that's not what happened. Agent 2 thinks Agent 1 would lose any court case for commission, but obviously it's Mr Seller who would be the one taken to court, so of course he would say that!!
Agent 2 uses this document to support his stance:
http://www.growerfreeman.co.uk/wp-content/uploads/2010/04/ESTATE-AGENTS-FEES-WHO-PAYS1.pdf

What do you think Mr Seller should do? Contact Agent 1 and ask him to ring Mr Buyer for a second viewing? But does Agent 2 now also have a valid claim for commission (if Mr Buyer buys the house)? The link above states that commission is due to an agent that is "the effective cause" of the purchase. I think that in this case, BOTH agents could claim to have caused the (potential) purchase??

Thoughts?

Yorkie1

No expert here, but I think the phrase "had negotiations in relation to the property" might be relevant. Does simply introducing a prospective buyer amount to "negotiations"? On one argument, it doesn't. But I don't know the answer I'm afraid.

G_M

The general advice when switching agents is to ask agent 1 to provide a list of all prospective buyers they believe they have introduced.

Seller gives copy of the list to agent 2.

Agent 2 now knows that if any of these buyers approach him, agent 1 will claim a fee.

Everyone knows where they stand.

In this case I believe agent 1 can claim a fee. Whether agent 2 can claim depends what the seller did. Since seller, in writing,

tells Agent 2 not to arrange a viewing while he figures out his position.

it now depends what seller did/does after "figuring out his position".

Best advice is to write to agent 2 and tell them not to accept the buyer or arrange any viewings since agent 1 did the initial introduction.

eddddy

Hi lorrainp

I agree with you that Agent 2 should have sent the buyer back to Agent 1. (That's what EAs I've worked with have always done.)

However, this is the strategy I've heard others use in similar circumstances...

Put the ball back in the agents' court. Tell both agents that should this person go on to buy you will only pay one lot of commission. So it is up to them to decide between them now who gets it (or if it is split).

Once they've decided, you proceed with the second viewing.

But unfortunately, the agents could still end up in deadlock...

nonnatus

You need to find out what TYPE of agreement you signed with Agents 1 & 2.


Sole Selling Rights?


or


Sole Agency Contract?


It matters A LOT! If you signed Sole selling rights with EITHER agent then they can claim their FULL fee from vendor (to the extent of vendor having to pay twice, although this rarely happens - more likely they will agree to "share" the fee in some way)

princeofpounds

Be aware of this ruling, which is relevant:

http://www.oft.gov.uk/news-and-updates/press/2008/81-08

If the buyer told agent 1 they were no interested/able to buy at the time then they are out of it.

If agent 2 has done nothing but simply be instructed whilst the buyer returns (and has sole agency rather than sole selling), then they are out of it. Obviously if they have done viewings/negotiations of any kind then it is complicated again.

lorrainp

Thanks for all the help so far guys.

Both Agent 1 and Agent 2 had Sole Agency, not Sole Selling.

And Mr Buyer's name IS on the list of people who've already viewed, which was passed to Agent 2 at the start of their appointment.

I'll read the link that Princeofpounds posted.

princeofpounds

And Mr Buyer's name IS on the list of people who've already viewed, which was passed to Agent 2 at the start of their appointment.

Then agent 2 should be referring the buyer back to agent 1, and they have done no introduction to the sale.

Dan-Dan

sounds crazy though , where does the obligation to agent 1 end , seeing as they have been deinstructed , what about if the buyer pulls out the market for 12 months due to unforseen issues etc , agent 1 cant just sit there waiting to coin it at any given date in the future

surely ?

ConfusedofYorkshire

Logically I'd say agent 1 should get the fee. The buyer presumably is interested now because of agent 2's amazing photos. They were introduced by agent 1, and over the course of time have decided they're still interested. I'd let the 2 agents sort it out between them and not the buyer view until they have.

cabbage

i would add to the above post by saying and then get it in writing from both agents what has been agreed.