Estate agent fees

SteveTytherleigh

Hi,

My father recently sold a house and was charged commission on the ‘valued price’ as opposed to the actual ‘sale price’ which ended up being 40k less.

Seems that it was hugely over valued for this sole reason to guarantee more commission.

Can anyone tell me if this is a common practice as I’d never heard of it, doesn’t seem legitimate to me.

Thanks

Comms69

That's irrelevant; what does the contract say???

eddddy

SteveTytherleigh wrote: »

Can anyone tell me if this is a common practice as I’d never heard of it, doesn’t seem legitimate to me.

It's not common, but I've seen at least one EA contract like that before.

(I regarded it as an indication of a dodgy EA, so I didn't use them.)

The only real answer is to read and make sure you understand the EA's contract, before instructing them.

davidmcn

Did the agent tell them the relevant valuation before getting them signed up?

lollipopsarah

the same thing happened with our dad recently, dad just signed the contract and when he reduced the price for a quick sell nothing was mentioned about it. in hindsight if we had known we may have stuck to the original price although properties are not selling well here at the moment. xx

Rambosmum

Unusual, but not unheard of. Personally I wouldn't touch a contract like that (despite the fact it would have worked out well for us as we sold well above valuation). I view it as a tactic by unscrupulous EAs who over value properties to get your business and money then get you to drop the price quickly.

kingstreet

Many of the corporates have a minimum fee, regardless of the value/sale price. This may result in an agreement at a percentage of the valuation, to ensure the minimum is met.

One wanted to charge my MIL £3,500 inc VAT for selling for about £100k.

Eventually, she sold using a local agent at a flat fee well below that.

SmashedAvacado

Rambosmum wrote: »

Unusual, but not unheard of. Personally I wouldn't touch a contract like that (despite the fact it would have worked out well for us as we sold well above valuation). I view it as a tactic by unscrupulous EAs who over value properties to get your business and money then get you to drop the price quickly.

Its no different to agreeing a fixed fee. The agent hardly has any incentive to maximize price when paid on a sliding basis in any event. The key thing is that the price must have been clearly agreed. Presumably that was the case.

Just_Di

SteveTytherleigh wrote: »

My father recently sold a house and was charged commission on the ‘valued price’ as opposed to the actual ‘sale price’ which ended up being 40k less.

Is this estate agent a member of The Property Ombudsman or the Property Redress Scheme? It's compulsory for them to belong to one or the other. (The Ombudsman Services - Property ceased last month.)

Both schemes have a Code of Conduct which their members should abide by (regardless of legislation) so why doesn't your father make a complant to the agent and then escalate it to an Ombudsman.

Worth a try

Di