Estate agent fees for withdrawing property from market

gazfocus

NervyBuyer said:

I do agree about thinking you can get away without paying for a service, but on the other hand if you put your trust in the agent advising they can sell it at X price and they can't, because they're all over-egging the valuation and don't have a crystal ball, they haven't really provided the service (so the proceedable buyer + asking price clause is a good one).

Obviously needs careful reading of contracts which I hope will be available at valuation time rather than having to agree to appoint an agent to see it.

I 100% agree in those circumstances. I just checked our contract and the initial tie in period was 12 weeks so if the EA hadn’t found a buyer in 12 weeks, we could have pulled the house without charge. 

I think the key though is our contract specified the price as a ‘marketing price’ rather than a sale price. There’s nothing in the contract that guarantees the house would sell for at least that price. Ours actually way marketed at offers over and we were quite (naively) deflated when the offers came in at £1k over the asking price as we felt the EA has given us false expectations. Nevertheless, we’d accepted an offer within a week of it going on Rightmove so couldn’t grumble really. 

eddddy

NervyBuyer said:

Obviously needs careful reading of contracts which I hope will be available at valuation time rather than having to agree to appoint an agent to see it.

FWIW,  you wouldn't agree to appoint an agent first, and then they show you a contract so you can find out what you've agreed to. 

If any estate agent suggests that you have to commit to appointing them before they'll show you a contract, they're shysters. They're playing games with you and they're hoping you're too naïve to realise.

propertyrental

More important is the minimum contract period. This can vary from 4 weeks up to 28 or so. The shorter the better so negotiate. If the don't find you a buyer within that period you can then choose either to continue with them, switch agent, or.... decide not to sell/

If you withdraw during that period, there is often (not always) a fee to cover their marketing costs. But if you've simply decided not to sell, why withdraw? Just tell them to increase the asking price and you'll get no viewings!

Negotiate too on the notice period. If you want to switch agent/withdraw, there's usually a notice period of 2 -8 weeks. Again, the shorter the better.

and of course, negotiate on their fee too.

hulu72

I’m an EA myself for a local independent agency and we charge a cost (£250) if you withdraw which accounts for marketing and admin. You would be surprised at the cost of advertising on portals and then admin costs for anti money-laundering/title register documents etc.

It is incredibly irritating when people withdraw and then expect no charge. You’re instructing a business to carry out a fair amount of work for you at their own expense, and then expect to get that for free. At the end of the day you’re signing a contract to pay a fee for a service, not a guarantee of a sale. You have still received part of that service in regards to viewings/marketing/prospecting buyers etc. There are so many factors that sometimes a house doesn’t or takes a long time to sell, however an agent will want your house to sell as much as you do, a decent sized fee would cover a couple of employees wages for the month. 

I’ve got to stress the difference between independent and corporate/online though. Corporates/independent tar the industry as a whole really. You may be quoted a minimal fee, but a common saying in the industry is you get what you pay for. They are the classic stick on Rightmove and see what comes in. They put very little work in and will top a valuation to win a listing, some even pay commission on getting price reductions

DullGreyGuy

NervyBuyer said:

If you market a property and then decide to take it off the market for whatever reason (before accepting an offer), is it normal to have to pay a fee to the estate agent?

Depends on your contract.

In theory this should depend on your negotiating skills... you could pay a higher success fee and be able to withdraw for free or pay a lower success fee and pay a fee to withdraw (in theory a middle ground exists if it is certain circumstances outside of your control).

In practice the balance of power isnt such that these things can be heavily negotiated and so tends to be more agent specific 

NameUnavailable

Is it fair to expect a loca EA with an office to run, staff to pay, overheads, advertising costs etc. etc. to value and market your property for X weeks only for you to change your mind and expect to pay nothing?

Who else here works for free? If your boss said to you tomorrow, oh were not paying you this month soz, because we just changed our mind and decided we didnt' really want you to do the work you've done' would you say, OK that's fair.

You can go to Purplebricks and pay an up front fee instead or just stick a For Sale board outside your home and try and DIY.

Chrysalis

Agents are a leech on both LL's and tenants, I would advise not using them.

Was sad the banning of fee's didnt kill them off.

eddddy

NameUnavailable said:

Is it fair to expect a loca EA with an office to run, staff to pay, overheads, advertising costs etc. etc. to value and market your property for X weeks only for you to change your mind and expect to pay nothing?

Estate Agents are grown-up business people. 

If they offer "no sale, no fee" terms (i.e. no withdrawal fees), they will have thought through the implications.

They do it because they think it makes good business sense. i.e. It will attract more customers overall, even if some of those customers later withdraw.

So nobody needs to "feel sorry for" those estate agents when they withdraw, or feel bad for taking advantage of the EA's chosen business terms.



It's similar to the subscription businesses who offer deals like "first month free". I'm sure some customers sign-up for the "free month" then cancel without paying anything - resulting in lost money for the business.

But the businesses will have thought of that - and decided that it's a good business model overall, for winning business. 

Surrey_EA

serpico100 said:

There is also a cost for them to advertise on zoopla and rightmove etc. That can cost around £60 per month

I think our Rightmove monthly bill is running at about £2000 per month, for one office.

TBagpuss

hulu72 said:

I’m an EA myself for a local independent agency and we charge a cost (£250) if you withdraw which accounts for marketing and admin. You would be surprised at the cost of advertising on portals and then admin costs for anti money-laundering/title register documents etc.

It is incredibly irritating when people withdraw and then expect no charge. You’re instructing a business to carry out a fair amount of work for you at their own expense, and then expect to get that for free. At the end of the day you’re signing a contract to pay a fee for a service, not a guarantee of a sale. You have still received part of that service in regards to viewings/marketing/prospecting buyers etc. There are so many factors that sometimes a house doesn’t or takes a long time to sell, however an agent will want your house to sell as much as you do, a decent sized fee would cover a couple of employees wages for the month. 

I’ve got to stress the difference between independent and corporate/online though. Corporates/independent tar the industry as a whole really. You may be quoted a minimal fee, but a common saying in the industry is you get what you pay for. They are the classic stick on Rightmove and see what comes in. They put very little work in and will top a valuation to win a listing, some even pay commission on getting price reductions

This is dependent on the contract, though. If your contracts include that clause then of course you are entitled to charge, but equally, if clients have signed up on the basis that their agent will be paid only if and when the property is sold that's also a perfectly valid way to have things set up. After all, agents don't generally offer to reduce their fees if a property sells fast will very little work done on their part! 

I personally have no issue with an agency agreement that provides for a fee to be paid if the seller withdraws the property from the market within a specific period of time or where there is a proceedable buyer but the seller pulls out, but I don't think a blanket charge is always appropriate. And equally, if an agency has a business model where their fees are lower than those of their competitor but they do charge a flat fee where the property is wthdrawn for any reason, then of course some sellers will prefer that, but there is nothing inherently wrong or unreasonable in customers preferring a genuine no sale - no fee arrangements, and agents who offer that contract are free to set their charges at a level which takes into account the fact that sometimes they will have advertised a property without getting a fee.