Estate agent's contract

GDB2222

My BIL is asking for advice on the draft contract he has received from his estate agent. I haven't sold a house in the last 25 years, so I'm very rusty. Any tips what to look for in the contract, and what to change?

I am worried about a few points:

1. Commission becomes payable following exchange, even if the purchase does not complete.

2. There is a very, very wide definition of what they mean by introducing a purchaser. For example, if a person became aware that a property is for sale through noticing a for sale board, the agent wants his commission even if the sale takes place months or years later.

Thrugelmir

What's your particular concern with these 2 points.

diggingdude

1) I personally would argue that one before signing and correct it to say if seller pulls out they get it not buyer.

2) Guess they would have to prove it

Then what do I know? I just like a good row

eddddy

GDB2222 wrote: »

1. Commission becomes payable following exchange, even if the purchase does not complete.

It's very, very rare that contracts are exchanged, but the sale doesn't complete (and the seller could potentially sue the buyer for the EA's fee, if it did happen).

But you can ask the EA to change the contract to say fees are only due on completion.

GDB2222 wrote: »

2. There is a very, very wide definition of what they mean by introducing a purchaser. For example, if a person became aware that a property is for sale through noticing a for sale board, the agent wants his commission even if the sale takes place months or years later.

Can you give a realistic example of your concern here?

e.g. Are you thinking somebody might knock on your BiLs door and say "I want to buy your house without dealing with your EA."

FWIW, following a Court of Appeal ruling, that contract clause probably wouldn't stand up in court.
See: https://www.telegraph.co.uk/news/newstopics/lawreports/1935750/FOXTONS-LTD-v-BICKNELL-and-ANR.html


I'd guess it might be a very 'gentle' EA contract, if those 2 things are the biggest concerns.

G_M

GDB2222 wrote: »

..... Any tips what to look for in the contract, and what to change?
a) the fee. Negotiate down (whether a fixed fee or %).
b) don't agree to a 'sole selling' contract (ie if you find a buyer you don't want to still pay a fee)
c) if sole agency, negotiate down the minimum contract term. 12 weeks max. 8 is better. 6 is ideal. You can always extend if happy, but you can't escape early if unhappy!

I am worried about a few points:

1. Commission becomes payable following exchange, even if the purchase does not complete.
Cross out the word 'Exchange' and write in 'Completion', on both copies. Get the agent to initial the change on the copy you keep.

2. There is a very, very wide definition of what they mean by introducing a purchaser. For example, if a person became aware that a property is for sale through noticing a for sale board, the agent wants his commission even if the sale takes place months or years later.

2) above is a standard term, and fair, though I believe the courts have ruled there is a time limit. Can't remember offhand what it is.

GDB2222

Thanks for all the input. I thought folks would like to know the upshot of this. The EA's contract is quite complex and convoluted, and we agreed the following addition.

The parties agree that the following additional terms will override all other terms of the contract. If there is any conflict, these overriding terms will prevail.

The agent will not be entitled to commission unless the buyer is introduced by the agent, has attended a viewing of the property arranged by the agent, and has completed a purchase of the property as a direct result of that introduction during this contract or within four months of it ending.

Upon termination of this contract, the agent will provide the names of all those introduced by the agent and who attended a viewing of the property arranged by the agent, subject to consent under GDPR.

In the event of a claim for commission by more than one agent, the seller will not be liable for more than one agency commission in total.

The current occupants of the property, X&Y, have expressed interest in buying the property. No commission will be payable in respect of them.

G_M

Well done. Just shows what you can do if you ask.

Sadly many people believe that contracts are somehow 'inviolate' - "take it or leave it".

csgohan4

G_M wrote: »

Well done. Just shows what you can do if you ask.

Sadly many people believe that contracts are somehow 'inviolate' - "take it or leave it".

Or they don't read the contracts and sign and complain on here afterwards when things go wrong

GDB2222

This is a local agent, and I'm dealing with the owner. We are not out to stitch him up, just avoid ambiguities or being in the middle of a fight between two agents.