Private Buyer Situation - Need Some Advice

Tomby1

I have a quick question for you helpful MSErs.

We have just gone on the market with an Estate Agent (Thursday) but have been looking to sell for some time and have been discussing with neighbours. On Saturday, one of our neighbours popped over to discuss their sister coming to view the property as she was interested in buying. They may well make an offer today (Monday).

My question is:

Based on the below contract wording, where do we stand with going private and bypassing the EA?

Sole Agency

Our sole agency rate is X%, inclusive of
VAT (X% net of VAT).

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 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. This liability persists for six months from the date
this agreement ends.

Joint Sole Agency and Multiple Agency

Different rates of commission apply and will be agreed
prior to any change in Agency.

Notice of the Right to Cancel

The client has the right to cancel this instruction within
fourteen days of signing this agreement, unless the
agreement has been signed by and in the presence of
both parties at the Agent’s premises, in which case the
instruction will be legally binding from the time of signing
the agreement.

We cannot commence marketing until the end of this 14
day period, where applicable, unless confirmed by you
at the ‘Performance of the Contract’ section below.

When you become liable to pay

The fee becomes payable in the event that the Estate Agent introduces a purchaser, whether directly or
indirectly, who enters into a binding contract to purchase
the property. Introduction may be made by means of
sales particulars, the internet, newspaper or other
advertisements, sign board, letter or personal enquiry
through our office or any sub-agency. The fee payable to
the Estate Agent is inclusive of all local advertising
carried out at our discretion. There will be no additional
costs or charges unless they have been previously agreed
by yourselves, eg any form of national advertising in any
format.

Our commission is due upon exchange of contracts and
payable from the proceeds of the sale by your solicitor or
conveyancer upon completion. Interest may be charged
on accounts not settled immediately upon completion.

Dual Fee Liability

Dual fee liability may arise where the client has previously
instructed another agent to sell the property, or where
the client instructs another agent to sell the property on
a sole agency basis or grants them sole selling rights
during or after the termination of this Agreement and
contracts are exchanged in a sale to a buyer to whom we
introduced the property.

Termination

Termination of the Agreement or a change of the type of
Agency can and shall be effected by 14 days written
notice by either party, subject to the agreed minimum
period of 12 weeks. The Agreement shall continue after
the initial minimum period unless and until terminated by
either party in the manner prescribed above.

If you wish to remove your property from the market you
may do so immediately. However, you may not thereafter
place it back on the market with any other estate agent

Grenage

How did they know the property was for sale?

Tomby1

Grenage wrote: »

How did they know the property was for sale?

Word of mouth (we told them earlier in the week)

babyblade41

IMO if the property is on right move then it would be hard to prove that it didn't come from the EA.

It would seem odd that they have only shown an interest as soon as an EA was instructed and property advertised

Tomby1

babyblade41 wrote: »

IMO if the property is on right move then it would be hard to prove that it didn't come from the EA.

It would seem odd that they have only shown an interest as soon as an EA was instructed and property advertised

They were away until Saturday visiting family in London, so were discussing it with them this week, but I can certainly see how the EA would view it (as you have).

davidmcn

Is there a board outside? Is it listed online?

Cakeguts

It doesn't matter. Once you have instructed an estate agent to sell your house you are contracted to pay their fee even if the next door neighbour has decided to buy it and doesn't go through the estate agent.



If the person coming to view had arrived before you had a contract with the estate agent then you could have a case but not after.


The estate agent contract says that they have sole agency.

Tomby1

Cakeguts wrote: »

It doesn't matter. Once you have instructed an estate agent to sell your house you are contracted to pay their fee even if the next door neighbour has decided to buy it and doesn't go through the estate agent.



If the person coming to view had arrived before you had a contract with the estate agent then you could have a case but not after.


The estate agent contract says that they have sole agency.

I thought there was a difference between sole agency and sole selling rights?

And yes to the online/board question.

Cakeguts

Tomby1 wrote: »

I thought there was a difference between sole agency and sole selling rights?

And yes to the online/board question.

The problem is that you can't prove that the buyer was not influenced by the advertising on Rightmove. They could have got the information orignally from you but they could also have looked at the property on Rightmove as well or someone else in their family could have looked at it on Rightmove and then discussed it with them. There is no way that you can prove that the advertising by your agent was not involved. If this had happened before you instructed an agent then it would be a private sale but not now.

Davesnave

Tomby1 wrote: »

They were away until Saturday visiting family in London, so were discussing it with them this week.

If you knew this, you should have given the EA prior warning and stated who they are before going live on the internet.


Of course, you may not have known and it might have been something they kept to themselves, in which case they've done you and their sister no favours!

eddddy

Following a case at the Court of Appeal, the Property Ombudsman has updated their Code of Practice, to define an "Effective Introduction"

18j Effective Introduction. An effective introduction must evidence that the agent carried out an act that initiated the buyer’s reaction to the property. As such, there is a need for a defined transaction event to occur. This can be most clearly evidenced by an agent carrying out a viewing.

Link: https://www.tpos.co.uk/images/Codes_2019_a5/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A5_-_Effective_1_June_2019.pdf

On that basis, seeing an EA's board or an EA's advert isn't an Effective Introduction. The EA needs to do something like arrange a viewing.

If the EA is a member of the Property Ombudsman Scheme (most are), the Code of Practice is mandatory, so the EA should be updating their terms of business.


Edit to add...

The court case and update to the code of practice was mainly intended to stop sellers having to pay 2 fees to 2 different EAs, but it seems equally relevant in this case.