Estate agent fees due date

paulj2021

Hello, just looking at the EA contract and it says fees become due on exchange of contracts, with payment within 30 days, is this normal? And if so, if my completion is more than a month after exchange, how do people find these fees before they receive the monies from their sale, is it required to take out a loan or whatever? I’ve sold before but it was many years ago and I don’t remember this being required 

eddddy

Usually, EA fees become due on exchange of contracts, but are payable on completion.

If you don't like the "30 day" clause - negotiate with the EA. i.e. Explain why the "30 day" clause is unacceptable to you; what terms you want instead; and that you'll go to another EA if they don't agree.



Is your concern because you might be buying a newbuild with a long gap between exchange and completion, and you plan to ask your buyer to agree to the same terms? And perhaps even worse, you might have long-stop dates in both contracts which means you might never complete?

Falafels

These days, completion generally happens very shortly after exchange; years ago, it was generally one month between the two. However, it's not uncommon for both to happen simultaneously nowadays, and certainly within a few days of each other, so the 30 days stipulation would not be a problem. However, as eddddy says, there are situations where this could be disastrous for you, so it all depends on context.

If I were you, I'd go back to the estate agent, explain your concerns and ask if the contract could be reworded to say that the fees will be payable on completion. In answer to your question, though, people don't take out loans to cover them, and the funds are transferred to the EA's by the solicitor when the transaction's complete - just like they always have been.