Cancellation within 14 days and selling privately to a friend

sh00148

We signed a contract less than 14 days ago with an estate agent who are selling a house that we’d like to buy, but we needed a buyer to proceed. They have not done anything for us really and we were hoping that by going with them they would speed up the potential process as it would result in two house sales rather than one. My husband did the photos, floor plan, advert etc. they have just organised three viewings which we have done but to no avail. 

Anyway, a very close friend has approached us asking to buy our house. They knew from us that our house was up for sale, not from right move etc and this was before we signed with the agent. 

 We are pondering about leaving our estate agent as we are still in our cooling off period for two reasons really. We have our own private buyer and we aren’t massively happy with the estate agents service. We are just worrying that it might burn bridges and impact our potential purchase of the other property which they have listed. Are we okay to do this?!

HampshireH

Did you make the agent aware you already had someone you knew privately who may be interested?

sh00148

Not in the contract, no. They tried to press us to put someone down, but my husband said it was too expensive for his friend. 

Ponsienella2

It depends on the terms of the contract you signed. Sometimes you still have to pay the EA, irrespective of how the buyer came to know of the house being up for sale.

theartfullodger

Signed electronically away from their office or physically signed?

sh00148

Signed in our house. So it says it’s okay as it wasn’t in the office.

Our contract states we can cancel without giving a reason if not signed in the office. 

sh00148

The second photo is the clause about finding our own buying ‘if in a contract’

the first is about cancellation.

we are within the 14 days. 

eddddy

Assuming you signed/agreed away from the estate agent's office, the law gives you rights to cancel within 14 days.

BUT... if you cancel in those 14 days, the estate agent can require you to pay their costs. So that might be the cost of:

• Visiting to measure up and take photos
• Writing up a listing
• Advertising on Rightmove
• Phoning around prospective buyers on their database
• Arranging and accompanying 3 viewings 

But maybe the big question is whether it's a "sole agency" contract, or "sole selling rights" contract (or something else).

• If it's a "sole agency" contract, there should be no problem. You found the buyer privately, the buyer wasn't introduced by an agent - so you don't have to pay your estate agent their fee. You don't even have to worry about cancelling the contract. (But there my be withdrawal fees to pay - check the contract)

• If it's a "sole selling rights" contract, it might be more complicated. There might be arguments about when your friend was introduced. (i.e. was it during the contract period?)

From a different angle, are you sure that your friend is a "realistic" and proceedable buyer? For example:

• Were they looking for a property to buy - or is this a "spur of the moment idea", which might melt away?
• Do they have a property to sell? Is it under offer?
• Do they have a mortgage arranged in principle?
• Do they have funds for the deposit?

Edit to add...

You posted while I was typing - it seems it's a "Sole selling rights" contract.

If the estate agent believes your friend was introduced during the contract period, they might say you cannot cancel during the 14 days, because the contract has been completed.

sh00148

What a helpful response!

Thank you.

In our cancellation email, we have stated that following the cancellation we will be approaching a family friend regarding our house sale. Does this sound okay?

’ Following the receipt of this cancellation, we will be approaching a family friend (who we spoke to about our potential property sale weeks prior to listing our house) to see if they would like to purchase our property privately for a slightly lower rate.’

We have messages from our friend to prove that they knew about our house sale before we put it up, but their affordability circumstances have changed which brings our property into their price range. 

I want to be transparent with the agent to say that we may well have a buyer within a day of cancelling! They are mostly proceedable:

Funds okay
Property on market with multiple viewings
Have been looking to move for a fair amount of time

eddddy

sh00148 said:

What a helpful response!

Thank you.

In our cancellation email, we have stated that following the cancellation we will be approaching a family friend regarding our house sale. Does this sound okay?

’ Following the receipt of this cancellation, we will be approaching a family friend (who we spoke to about our potential property sale weeks prior to listing our house) to see if they would like to purchase our property privately for a slightly lower rate.’

We have messages from our friend to prove that they knew about our house sale before we put it up, but their affordability circumstances have changed which brings our property into their price range. 

I want to be transparent with the agent to say that we may well have a buyer within a day of cancelling! They are mostly proceedable:

Funds okay
Property on market with multiple viewings
Have been looking to move for a fair amount of time

Yep. As I mentioned, if the estate agent still thinks the buyer was introduced during their sole selling rights contract period, they might persue you for payment.

But the payment won't be due now, it will be due if/when you friend exchanges contracts for the purchase. So the estate agent might not make a big fuss now, but then send you a bill after exchange of contracts / completion.

sh00148

Thank you. 

I guess our benefit is that we did mention they were selling, but couldn’t afford our property verbally before signing. They were pushing us to put them down on the form for 50% fees, but now I know why.

Could we argue that we do not owe them fees if they were to try to bill us at the end? We have messages etc that prove they knew of our house sale before going through the EA.

thank you so much for your help.