Ready, Willing and Able Buyer

Pendsive

Hopefully somebody can clarify this in more detail. A ready, willing and able buyer on an estate agent’s contract is something I’ve seen a lot of recently, so what does this really mean? I’ve read some posts on this forum and other places on the internet and the whole term seems to be quite vague at times and hoping somebody here can help clarify the situation better.

For example, if somebody views your property and makes an offer at the full price which the seller accepts but then later changes their mind does the seller then have to pay the agent’s commission? Or do things have to progress much further along, like having a surveyor around and then reporting to the mortgage company who then either approve the buyer or not, what then happens if the seller changes their mind at this stage on mortgage approval? Or if the surveyor finds plenty of things wrong with the property and the seller refuses to fix or drop the price, the buyer drops out can the seller be accused of effectively refusing to sell? Or does the term ready, willing able buyer only come into effect on the unconditional exchange of contracts if the seller changes their mind at the last moment?

Also if a seller were for some reason shown to be withdrawing more than once from an offer on their property within the contract period, would they be liable to pay the commission each time they had withdrawn from the sale or is this only a once only penalty?

What I’m really trying to fathom out here, is at what point does the seller actually become liable under law to pay the agent’s commission.

Thanks in advance for any responses here.      

NameUnavailable

Depends on the terms of your contract with the agent.

Usually their commission is earnt once contracts have been exchanged, and payable on completion.

AnotherJoe

I ensure mine had  "after completion" or something like that to avoid this bs. You might after all (just look at some of the posts in here) get irrational / nasty / idiotic buyers and wish to back out of that deal.

The contract isnt in stone you can add your own clauses strike out clauses whatever.

Pendsive

Thanks for the responses and the contract states "If a sale is agreed to a ready, willing and able purchaser/buyer, the agency reserves the right to charge the full fixed fee that would've been payable upon the unconditional exchange of contracts" I'm guessing that the key phrase could be "agreed" and what exactly constitutes this, is it verbal, written or signed etc? 

GDB2222

If you exchange contracts, that's agreed. Otherwise, not.

Pendsive

GDB2222 said:

If you exchange contracts, that's agreed. Otherwise, not.

Ok, so if anytime before an exchange of contracts takes place and the seller decides not to sell, they wouldn't be liable to pay the agent's commission?

GDB2222

Pendsive said:

GDB2222 said:

If you exchange contracts, that's agreed. Otherwise, not.

Ok, so if anytime before an exchange of contracts takes place and the seller decides not to sell, they wouldn't be liable to pay the agent's commission?

That's my understanding, but see my disclaimer below!!

NameUnavailable

Pendsive said:

GDB2222 said:

If you exchange contracts, that's agreed. Otherwise, not.

Ok, so if anytime before an exchange of contracts takes place and the seller decides not to sell, they wouldn't be liable to pay the agent's commission?

That should be the case but the terms you quote seem to imply something else. Ask the EA for clarification or ideally amend it to sale agreed and exchange of contracts (if a buyer pulls out after exchange you will have their deposit and can go after them for other losses i.e. agents fees).

verytired11

Do NOT sign a contract where your agent takes a fee for finding you a ready willing and able buyer.  You want a no sale no fee contract - ie only pay the fee if and when you exchange.  Otherwise you have to pay the fee to the agent just for finding the buyer, even if it doesn't proceed to exchange.  Ask the agent to change it.

Pendsive

GDB- Yes I've seen that disclaimer and would always assume that to be the case anyway..

NameUnavailable- Yes that is a valid point

Verytired-- What you've stated seems to be similar to what GDB said BUT you've gone a bit deeper and taken the process much further back. So going back to my original post, does not the agent have to prove that they have found a ready, willing and able buyer, as in that their mortgage has been approved, surveyor was sent around (which the mortgage needs for approval) the seller has replied to the buyer's solicitor requests and the buyer is financially in a position to exchange? From what I understand from your post, it just seems that if the agent has a buyer that wants to buy and the seller withdraws they would then be eligible to receive their fee, regardless of the buyer not fulfilling the financial/legal criteria that I've already mentioned.

How far does the buyer need to go in the whole process to legally be termed a "ready, willing and able buyer"?. .

GDB2222

Pendsive said:

GDB- Yes I've seen that disclaimer and would always assume that to be the case anyway..

NameUnavailable- Yes that is a valid point

Verytired-- What you've stated seems to be similar to what GDB said BUT you've gone a bit deeper and taken the process much further back. So going back to my original post, does not the agent have to prove that they have found a ready, willing and able buyer, as in that their mortgage has been approved, surveyor was sent around (which the mortgage needs for approval) the seller has replied to the buyer's solicitor requests and the buyer is financially in a position to exchange? From what I understand from your post, it just seems that if the agent has a buyer that wants to buy and the seller withdraws they would then be eligible to receive their fee, regardless of the buyer not fulfilling the financial/legal criteria that I've already mentioned.

How far does the buyer need to go in the whole process to legally be termed a "ready, willing and able buyer"?. .

Perhaps you could answer two questions:

1. Are you the seller?

2. If so, what is the exact wording of your contract with the estate agent?