Sole Agency stipulation

jrs101

Hi


I am hoping for some advise and opinions.


I've been given an estate agent contract with sole selling rights which from my web search is something I should avoid.


In summary:
- 19 wks tie in with 21 days notice to terminate.
- to pay commission if another agent or person found a purchaser
- to pay commission if unconditional contracts for the sale are exchanged if the purchaser was found by another agent or person, including myself
- to pay commission if terms are agreed within 2 years of the termination of the sole selling rights agreement with a buyer that they have introduced and where no other estate agent is involved and where a subsequent exch. of contracts takes place



Could someone advise on what specifics to ask for in a "sole agency" contract? I suppose something along the lines of a template of an "ideal sole agency contract"

Many thanks

saajan_12

That's a sole selling rights contract, not just a sole agency. To make it sole agency, you just need to take out references to another person finding the purchaser as a trigger for the agent to get commission.

jrs101 wrote: »

Hi

I am hoping for some advise and opinions.

I've been given an estate agent contract with sole selling rights which from my web search is something I should avoid.

In summary:
- 19 wks tie in with 21 days notice to terminate.
- to pay commission if another agent [STRIKE]or person[/STRIKE] found a purchaser
- to pay commission if unconditional contracts for the sale are exchanged if the purchaser was found by another agent registered with a redress scheme[STRIKE] or person, including myself[/STRIKE]
- to pay commission if terms are agreed within 2 years of the termination of the sole selling rights agreement with a buyer that they have introduced and where no other estate agent is involved and where a subsequent exch. of contracts takes place

Could someone advise on what specifics to ask for in a "sole agency" contract? I suppose something along the lines of a template of an "ideal sole agency contract"

Many thanks

jrs101

saajan_12 wrote: »

That's a sole selling rights contract, not just a sole agency. To make it sole agency, you just need to take out references to another person finding the purchaser as a trigger for the agent to get commission.

thanks for replying.


Yes it is sole selling rights which I am told to avoid!


So I should be asking for a sole agency contract and would I expect the amendments you have just made to be included in that?


The tie in period and the notice seems ridiculous too?

G_M

jrs101 wrote: »

In summary:
- 19 wks tie in with 21 days notice to terminate.Mad! Ask for 6 weeks and agree to 8 max.
- to pay commission if another agent or person found a purchaser Fair enough 'another agent' provided you've negotiated a discounted 'sole agency'commission rate, but 'person'? No Cross that out!.
- to pay commission if unconditional contracts for the sale are exchanged if the purchaser was found by another agent or person, including myselfas above. Though personally I'd insist commissiononly due if Completion actually takes place. It's very rare, but very occasionally contracts are exchanged but Completion does not happen....
- to pay commission if terms are agreed within 2 years of the termination of the sole selling rights agreement with a buyer that they have introduced and where no other estate agent is involved and where a subsequent exch. of contracts takes place
:rotfl::rotfl::rotfl:

6 months. Not two years.

If they won't alter the contract to met your requirements, find another agent.

jrs101

G_M wrote: »

If they won't alter the contract to met your requirements, find another agent.

Hello G_M thanks for your reply.

I will assume that when I request these amendments I also need to ask for sole agency "contract" as it says Sole selling rights on the contract?

I have a few more comments which I am hoping you can advise on too or indeed anyone else.


It also stipulates "I agree that should contracts be exchanged with a purchaser who has not been found by us, you will provide to us in writing, on request, details of the name, address and tel. number of the purchaser and the solicitors for the parties" Is that typically normal?


With regard to commission it states it is payable on Exch. of contracts but provided they receive an irrevocable undertaking in writing from my solicitor within 3 working days from exch. of contracts to settle our fees in full from the sale proceeds upon completion, we are prepared to defer payment until that time. Commission will then be payable within 3 working days of completion.

It also stipulates "in the event of a tenancy agreement being entered into for your property at any time, with an applicant or associated party who is introduced either directly or indirectly by us, commission is payable at a rate of 10% plus VAT of the total rent payable under the Tenancy agreement and excluding any management service fees for the duration of the tenancy."

Many thanks

G_M

Just delete the clauses you don'tlike before like. Initial your changes. Sign the contract. Get the agent to sign. Keep a copy (with the agent's signiture).


Contracts are not set in stone - you are the customer. If they want your custom, make them give you a contract you are happy with.

SouthLondonUser

I would never ever ever agree sole selling rights, but everyone is different. I would however be fine with paying the agents some fixed fee, to cover their costs, if, say, a coworker were to approach me directly to buy my property.

Another thing worth clarifying is that, ideally, you should have it in writing that, if the mandate ends without a sale, the estate agent should give you a list of who has viewed the property with them. Otherwise, how can you check if another agency sells your property, and the old agency claims they had showed it to the buyer first? But this throws up data protection issues, especially after GDPR.

ideally, you should also clarify in writing that the list should include only people who actually viewed the property, not people who were contacted about it and didn't bother viewing it.

You should also negotiate that the new agency won't show the property to people on that list.

eddddy

In addition to the comments made by others, there's another very important 'flaw'.

(This 'flaw' tends to appear in most 'Sole Selling Rights' contracts, but not in 'Sole Agency' Contracts)

jrs101 wrote: »

- to pay commission if unconditional contracts for the sale are exchanged if the purchaser was [STRIKE]found by another agent[/STRIKE] introduced by another agent, provided the introduction occurred during the period of this contract

i.e. If the buyer was introduced before the contract with this EA started, this EA should not get any commission.

It's less important if this is the first EA that you are instructing.

But if you move to another EA who has similar contract terms, you could end up paying double fees.

i.e,

• EA1 introduces Mr Smith
• You decide to terminate contract with EA1, and instruct EA2
• Mr Smith then decides to make an offer (which should be through EA1)
• You want to make sure that you only pay EA1 a fee, not EA2

jrs101

eddddy wrote: »

In addition to the comments made by others, there's another very important 'flaw'.

(This 'flaw' tends to appear in most 'Sole Selling Rights' contracts, but not in 'Sole Agency' Contracts)

i.e. If the buyer was introduced before the contract with this EA started, this EA should not get any commission.

It's less important if this is the first EA that you are instructing.

But if you move to another EA who has similar contract terms, you could end up paying double fees.

i.e,

• EA1 introduces Mr Smith
• You decide to terminate contract with EA1, and instruct EA2
• Mr Smith then decides to make an offer (which should be through EA1)
• You want to make sure that you only pay EA1 a fee, not EA2

Hi eddddy,


Does this sole agency agreement sound reasonable to anyone reading this?



You are appointing us to act as your sole agents. This means that you will be liable to pay commission 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:-


-- 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


--with a purchaser introduced by another agent during that period

eddddy

jrs101 wrote: »

Hi eddddy,


Does this sole agency agreement sound reasonable to anyone reading this?



You are appointing us to act as your sole agents. This means that you will be liable to pay commission 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:-


-- 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


--with a purchaser introduced by another agent during that period

Yes - that sounds like a standard sole agency agreement. That's as good as you're likely to get.

But there is still a risk you need to deal with if/when you change EAs - e.g. changing from EA1 to EA2.

• When you 'sack' EA1, you need to ask EA1 for a list of all buyers that they have introduced during their sole agency period.

• You then pass that list to EA2, and tell EA2 that they must not negotiate with any of those buyers (or if they do, you will not pay their fee).

• If those buyers want to negotiate (i.e. make an offer), they must do so via EA1.

jrs101

eddddy wrote: »

Yes - that sounds like a standard sole agency agreement. That's as good as you're likely to get.

But there is still a risk you need to deal with if/when you change EAs - e.g. changing from EA1 to EA2.

• When you 'sack' EA1, you need to ask EA1 for a list of all buyers that they have introduced during their sole agency period.

• You then pass that list to EA2, and tell EA2 that they must not negotiate with any of those buyers (or if they do, you will not pay their fee).

• If those buyers want to negotiate (i.e. make an offer), they must do so via EA1.

Hello again.


Can someone advise if the following is negotiable with regard to commission? Is it standard?



Our commission is still payable on the full price negotiated by us in the event that the purchaser refuses to complete the purchase or negotiates a reduction in the purchase price after exchange of contracts due to any misrepresentation made by you or your representatives whether fraudulently negligently or innocently.