Will I get in trouble with the Estate Agent

ma9gm

Hi,


I was curious if I might face any issues with what we've done!! Sorry this is long.


We originally signed with an estate agent (Called Agent A). Who found us a buyer. At the beginning we highlighted to the estate agent that we really needed to sell the house in 4 months. We had tenants in, that were going to leave in 4 months, and the mortgage rate was also going to rise significantly (end of a fixed rate deal).


At the time they said it would be easy. They found us a buyer. However, this buyer then took 2.5 months to get a mortgage applied for. Which was then undervalued. The estate agent then said the original buyers would just apply to another lender. We highlighted once again regarding the time frames, and said we would like the house back on the market. We said they could apply again, but we weren't confident of them getting a mortgage. We wanted another buyer who could exchange quicker and was more reliable.


The estate agent put it back on the market, but didn't show anyone round the house for a month. (Which is against our requests). They just said no-one was interested. All this time, the original buyers were taking ages to get another mortgage applied for.


We ended up getting annoyed with the estate agent, and changing to another estate agent. With the new estate agent, the house was on the market for 5 days, and we'd had 13 viewings and an offer which was higher than the original buyers. The new buyer got their mortgage fully agreed in 2 weeks. The only issue is now (literally on the same day) the original buyer has finally got a mortgage fully agreed also. It's taken them 4.5 months (yes we now have a house that is tenantless, and paying a high rate on the mortgage).


Will I get in trouble if I now turn round to the original buyer and tell them we are no longer going with them? We haven't exchanged contracts. Also in the original estate agents contract it doesn't say we have to pay any advertising fees or anything like that. Just fees paid on completion if contracts are exchanged.


We want to go with the new buyer for a few reasons. a) they have shown they can proceed things quickly, and hence, I have more confidence the process from now will be completed quicker with the new buyers, b) they are paying more, and the additional amount they are offering is actually fairly close to the additional cost's we've incurred due to the delay, c) I'm really annoyed with the original estate agent. I really want our new estate agent to get the fee. It's really obvious to me now they were putting people off showing them around the house when we asked them to put it back on the market. I guess it's just less work for them to wait and see what happens with the original buyer!!! But it doesn't help us!


Am I going to get in trouble whichever way I do this? I ended the contract with the original estate agent properly with 2 weeks notice.


The new estate agent has been well aware of the situation regarding both buyers the whole time. I didn't bother telling estate agent A about the new buyer.


Am I allowed to go with the new buyer or will I get in trouble if I do?

Hoploz

You won't get into trouble, but you will ruffle some feathers. Until exchange of contracts there's nothing anyone can do whoever pulls out, for whatever reason.

However, I would just urge you to think clearly and without prejudice about this situation. With the first buyer, have they got everything else in place, and the mortgage was the last thing to come through, or have they not done anything else while they waited to see if the mortgage came through? This would be an indicator of how keen they are/likely to go through with it.

It seems now at the outset that everything will be tickety-boo with the second buyer, but do be careful you don't jump from the fat into the fire - after all, you thought everything would be ok with the original people in the first place, I assume. Just bear in mind that the new EA wants his buyer to be the one to proceed. He, like all the others, will tell you what you want to hear, whether it's strictly correct or not. And of course he will only pass on to you what the new buyer tells him, so if they are exaggerating their good position, for example, he won't necessarily know that.

ma9gm

Hi,


Thanks for that. Both buyers are pretty much in the exact same position. Both are buy to letters, with the same % deposit. Both now have mortgages fully agreed, but need to do the solicitor side of things, with searches and queries etc. The original buyer I think is actually based in Italy, whereas the new buyer is based just down the road from where we live. For me, I can only really go on the information I have. Which is one buyer has taken 4.5 months to get a mortgage agreed, and the other has taken 2 weeks. I just wanted to check I wasn't going to get sued or something like that!

Hoploz

You're probably right to go with the new buyer. TBH waiting that long with no other progress sounds like a non-starter. They will have incurred costs but they can't sue you to recover it and neither are you under obligation to the EA

G_M

in the original estate agents contract it doesn't say we have to pay any advertising fees or anything like that. Just fees paid on completion if contracts are exchanged.

So you will owe the original agent nothing if contracts are not exchanged with the buyer they introduced.

I assume, of course, that when you changed to the 2nd agent you ended the contract properly with the 1st agent.......

pinkshoes

Just check the contract very carefully with the first EA for any terms about finding a buyer that can proceed.

It may say no fees are not payable until completion, but they might have the above clause somewhere else.

(If they do, you might find yourself having to fight it out over fees, or pay both!!)

How did you end the contract with EA1?

ma9gm

At the end of the 12 weeks sole agency period I gave them 2 weeks written notice of the termination of the contract. Then at the end of those 2 weeks I asked them to remove all advertising.

It was only after this date that the original buyer got their mortgage agreed. Up to that date they couldn't get anything sorted.

I did actually email both agents to clarify the situation when we changed. The wording basically said, I've read the contacts and wanted to put my understanding so they can correct me if I'm wrong. Please inform me if this isn't correct. The exact wording is below (I've changed the estate agent names though).

"1. We have this one possible buyer, who has had a mortgage agreed in principle and currently awaiting a survey (due on Wednesday). If we sell the house to them, full commission will be paid to Agent A, and nothing paid to Agent B. Monies will be paid on completion.

2. Any other people we end up selling the house to, following Agent B doing viewings etc during their contract term. Commission fee paid to Agent B, nothing paid to Agent A. Monies will be paid on completion."

Will this email help at all?

ma9gm

The contract wording doesn't say anything about a buyer being able to buy. The wording says this:

You will be liable to pay commission to us, in addition to any other agreed costs or charges, if at any time unconditional contracts for sale of the property are exchanged:

1) with a purchaser introduced by us during the period of our sole agency or with whom we had negotiations about the property during that period, or

2) with a purchaser introduced by another agent during that period

3) except where a purchaser first introduced during our sole agency period is legitimately reintroduced by another agent more than six months after the end of this agreement.

That's it really. The reason why I wrote the clarifying email above is because I wanted to clarify what introducing meant.

Hopefully this means I don't have to pay them their fee.

ma9gm

Reading through that again. That language can be a bit confusing. Does it look like I'm safe?

keith969

I'm not clear about when the 2nd estate introduced your new buyer. You say a 2 week written notice of termination was give after 12 weeks 'sole agency' period. So was the new buyer introduced after that 2 weeks notice period?

If so, then clause (2) doesn't apply. The dates of mortgage approvals are irrelevant.

eddddy

ma9gm wrote: »

The contract wording doesn't say anything about a buyer being able to buy. The wording says this:

You will be liable to pay commission to us, in addition to any other agreed costs or charges, if at any time unconditional contracts for sale of the property are exchanged...

<snip>

That's good - as long as you've read the whole contract. EAs sometimes put the "Ready, willing and able buyer" clause elsewhere in the contract.

Purely as an example, take a look at this EA's contract: http://www.abacusestates.com/terms.pdf

On Page 3

You will be liable to pay remuneration to us, in addition to any other costs or charges agreed, if at any time unconditional contracts for the sale of the property are exchanged:

a) with a purchaser introduced by us during the period of our Sole Agency or with whom we had negotiations about the property during that period; or

b) with a purchaser introduced by another agent during that period.

Then near the bottom of page 4

REMUNERATION IF YOU WITHDRAW FROM A READY WILLING AND ABLE PURCHASER
A purchaser is a “ready, willing and able purchaser” if he is prepared and is able to exchange unconditional contracts for the purchase of the property. You will be liable to pay to us one half of the agreed sale remuneration...