Estate Agent Contract

ashe

NewHomeOwner wrote: »

Thanks all. Confirms what we thought. It's just not worth it for 12 days!

I have to admit though, I don't really understand the stuff about it being a 'nasty' contract?

Surely this clause is fair enough? If my parents eventually did sell to someone who originally viewed through the original estate agent then the original estate agent should get the commission as they did the work? Or am I just misunderstanding/being naive?

1) If unconditional contracts for the property are exchanged in the period during which the agent has sole selling rights, even if the purchaser was not found by the agent.

Cos if they’ve signed with another EA they will have to pay commission to both EAs - it’s not about who gets the commission singular - original EA would want payment in full as would new EA and it doesn’t get split

eddddy

NewHomeOwner wrote: »

I have to admit though, I don't really understand the stuff about it being a 'nasty' contract?

I'll try to explain again, with an example.

• The current EA1 introduces Mr Smith (and shows him your parent's house).

• The contract with EA1 finishes.

• Later your parents instruct EA2 (with a min contract period of say 12 weeks)

• Then Mr Smith comes back and makes an offer, buys and exchanges within those 12 weeks.

If EA1 and EA2 both used the contracts you describe, your parents would have to pay full commission to both EA1 and to EA2.

With most other EA contracts, your parents would only have to pay commission to EA1. (EA2 would get nothing.)

NewHomeOwner_2

eddddy wrote: »

I'll try to explain again, with an example.

• The current EA1 introduces Mr Smith (and shows him your parent's house).

• The contract with EA1 finishes.

• Later your parents instruct EA2 (with a min contract period of say 12 weeks)

• Then Mr Smith comes back and makes an offer, buys and exchanges within those 12 weeks.

If EA1 and EA2 both used the contracts you describe, your parents would have to pay full commission to both EA1 and to EA2.

With most other EA contracts, your parents would only have to pay commission to EA1. (EA2 would get nothing.)

Thanks that explains it really well. So if they sign up with another agent in the future, as long as the new agent doesn't have that same clause they will be ok?

My parents are pretty overwhelmed having not sold in over 30 years. And apparently despite having sold relatively recently, I'm pretty clueless as well!

eddddy

NewHomeOwner wrote: »

So if they sign up with another agent in the future, as long as the new agent doesn't have that same clause they will be ok?

Yes - that's correct.

For extra safety, they could also ask the old EA for a list of people they've introduced to their property.

Then they pass that list to the new agent, and tell the new agent that if anyone on the list enquires about the property, they must refer them back to the old agent.

steampowered

It would be advisable not to show the new buyer round until after expiry of the 14 days, to reduce the risk of an allegation being made that this person was introduced by the current estate agent.

G_M

I disagree with others. It's not a 'nasty' contract.

Whilst I'm no fan of estate agents, it seems perfectly fair that if an EA introduces a potential buyer (during their period of contract), who goes on to buy, then the EA deserves their fee. They did their job.

And if it's a sole selling rights contract that the seller has granted them, the same applies.

NewHomeOwner wrote: »

2) If unconditional contracts for the property are exchanged after expiry of the sole selling rights to a purchaser who was introduced by the agent during the sole selling period, then the client will be liable to pay commission to the agent if contracts are exchanged within 6 months after expiry.

Perfectly clear.

eddddy

G_M wrote: »

I disagree with others. It's not a 'nasty' contract.

Ummm... have you read the whole thread?

G_M wrote: »

Whilst I'm no fan of estate agents, it seems perfectly fair that if an EA introduces a potential buyer (during their period of contract), who goes on to buy, then the EA deserves their fee. They did their job.

I agree 100%

G_M wrote: »

And if it's a sole selling rights contract that the seller has granted them, the same applies.

I agree 100%


Take a look at the example in post #13. That explains why this is a nastier contract than most other EA contracts.

G_M

The scenario you outline in post 13 is fairly common, and is an inevitable consequence of

* switching agents, each of which you wish to have a sole agency/sole selling rights arrangement with, and

* the protracted nature of property sales which can and do span those contracts.

The usual solution, recommended here and elsewhere, and mostly accepted by EAs, is for EA1 to provide a list of potential buyers they have introduced during their period of contract, and for that list to be passed to EA2 who agrees not to invoice if anyone on that list later gores on to buy.