property purchase, who's paying who !?

loanranger_4

We're buying a house and I was in a heated conversation with the vendor's agent yesterday and he reminded me (for some bizarre reason) that the vendor was his client and he would talk to them and get back to me. Got me thinking...

As there is usually "no sale no fee" then it is the buyer (me) who is paying the agent ! As if the property doesn't sell then the agent get's nothing ! So shouldn't he be looking after my interests?!

IvanOpinion

The estate agent should always act on the behalf of the seller... it is the seller that will ultimately pay their bill and has commissioned them to sell their house for them. it is part of the estate agents job to get the highest possible price for the seller (not the lowest possible price for the buyer) ... although there are some dubious types out there that make you wonder!

Ivan

lush_walrus

All estate agents work on behalf of the vendor, as stated they are the people who instruct the agent to work on their behalf, they are the people in a contract with the agent and they are the ones who pay the bill. All the applicant does is buy the house, form the vendor, not the agent. The agent at no time enters into any form of contract with the applicant. And thus, the agent works soley in the interest of the vendor.

calleyw

Everyone else is right that they are working for the seller (vendor) not the buyer.

And I should know as I have just sold a house and have a very nice estate agents bill to show for it.

Why do you think that you as the buyer are paying the estate agents bill

Of couse the estate agent wants the best price it means more comission for them.

Mind you what I find strange is that they are on a no sell no fee why do they allow property to languish on there books rather then getting the vendors to drop there prices or house doctor there houses.

I had 3 estate agents come around and only one told me that I had too much stuff in my living room and to cull it. And it was not even the one we went with.

Yours


Calley

Outtathaway

My next door neighbours were selling their house and they were listed with to agents and had worked out a deal that only the one who sold the house would get any commision from it.

It was quite surprising that the agents who didn't have their for sale sign were actually the ones to sell it

loanranger_4

Thanks all for your feedback

My point is that in a "no sale, no fee" house sale it is effectively the buyer that pays the agent ( as well as the mortgage company, stamp duty etc.). I am looking at the distribution of the money from a sale. The final selling price includes the agent's fee (i.e. vendors pays the agent out of the proceeds from the sale).

The agreement for the sale is of course between vendor and agent.

Cheers

lush_walrus

Yeah but the real point is, rgardless of who buys the property, the commission is paid by the vender. So if you choose to pull out now, then the agent will go on to sell the property and receive commission through a new sale.

Its the same with all forms of agents, be it travel, estate or jobs. You might be in the position to complete the deal, but you dont pay for the service.

If the system changed and the fees were split between the vender and the buyer, then yes the agent would be working on your behalf too.

andy88_2

I can't quite see the OP point. In any sale there is commission or seller's profit. If you see a car ad in Autotrader, you can argue that's included in the price you are paying, but you can hardly object as that is the mechanism for you hearing of it. If you buy an item in a shop there are revenues for all the companies adding value, from the raw materials to the retailer; I don't see how you would object to just one of these.

loanranger_4

Thanks guys.

My point is that if you pay for an advert in Autotrader then YOU pay for it, whether the car sells or not. Similarly if the vendor had to pay the agent for ongoing services in selling their house (say for viewings or advertising) then I would agree the vendor is paying for a service (whether the house sells or not).

My point can be illustrated as follows :

Vendor is a client of Estate Agent
Buyer is a client of Vendor

It follows that the Buyer is a client of the Estate Agent!

lush_walrus

Yes but the relationship is exactly as you have said.

Vendor has a contract with the Estate Agent
Buyer has a contract with the Vendor.

Estate Agent has a contract with the Vendor regardless of the buyers existance.

The Vendor and the Agent negotiate the terms of their appointment, prior to a buyers existance eg: the buyer has no input into these terms and conditions.

There is no direct contract between the Buyer and the Agent, the buyer does not employ the agent for any service. The relationship between the Agent and the Buyer is purely circumstantual.

The buyer enters an agreement with the vendor, but even then it is only when the property exchanges. Until that point everything is based on trust. Contracts are only drawn at the point when both Buyer and Vendor have signed to say that money will be exchanged and that the transaction will complete on a certain date.

The only time that a relationship is made between an agent and a 'non owner' is in some letting agency's where the people looking for somewhere to live pay the agent a finders fee.

lush_walrus

And if you do use an Autotrader advert as an example then the situation is basically the same as an agent anyway.

The person selling the car is the same person who pays for the service.
Therefore Autotrader work on behalf of the person selling the car.
The person buying the car, only has a relationship with the seller when they buy the car.
They do not at any stage have a relationship with Autotrader.

The fact that money is only due at the point of selling the house does not make any difference at all. Money does not alter relationships or alter the obligation on a service to perform.