14 Day cooling off period cancellation

Digital_bath

Hi all, we recently listed our property with a local estate agent. They completed accompanied viewings for us over a 5 day period, during which time we received a few offers on the property through the agent. A family friend contacted us directly after hearing from our parents that we were selling, and made an offer which we would like to accept. We told the estate agent that we were considering their offers, but also a private offer.

We decided to cancel the contract within the 14 day cooling off period, as stated in the contract we signed.

The estate agent are now claiming that we have 'introduced' the private buyer to them during the sole agency period, therefore if we sell to this private buyer they will claim full costs and commission. At no point has they private buyer contacted the agent.

Our contract states 'If you request to begin the performance of services during the cancellation period, you shall pay us an amount which is in proportion to  what has been performed until you have communicated us your cancellation' - We have told them that we would be very happy to pay them for the services they have provided so far, but it's my understanding that we have cancelled within the cooling off period and therefor don't need to also pay them commission upon selling?

On the contract they failed to fill in the period of time in which they have the right to act as Sole Agent in relation to the property, but they're now claiming they remain sole agent until you give us 28 days notice, even if we cancel within the 14 day period.

Can anyone advise on this please?

Thank you!

eddddy

Typically, the situation will be like this.


If it's a 'Sole Agency' agreement, there shouldn't be any need to cancel the agreement. (And therefore you wouldn't have to pay them any costs associated with cancellation.)

You simply tell them that you have found a buyer privately, so you don't want any more viewings arranged, for the moment.

No sales commission should be payable to the estate agent, because the buyer was not introduced by them or introduced by another agent.


If the estate agent is saying they introduced the buyer (or that another agent introduced the buyer), ask them why they believe that. For example, did they talk to the buyer at any point about your property?



Edit to add

But you have to bear in mind that you are still under contract with the estate agent until you terminate the agreement -  so that would be after the minimum contact period, and with 28 days notice.

So if this sale falls through, you'll have to go back to this agent, unless/until you've properly terminated their contract.


And also...

There might be a 'withdrawal fee', or similar, to pay when you finally terminate the agreement (after the minimum contract period). Although, if your private sale goes through, but you never terminate the agreement - it might be interesting to see what happens.

Digital_bath

eddddy said:

Typically, the situation will be like this.


If it's a 'Sole Agency' agreement, there shouldn't be any need to cancel the agreement. (And therefore you wouldn't have to pay them any costs associated with cancellation.)

You simply tell them that you have found a buyer privately, so you don't want any more viewings arranged, for the moment.

No sales commission should be payable to the estate agent, because the buyer was not introduced by them or introduced by another agent.


If the estate agent is saying they introduced the buyer (or that another agent introduced the buyer), ask them why they believe that. For example, did they talk to the buyer at any point about your property?



Edit to add

But you have to bear in mind that you are still under contract with the estate agent until you terminate the agreement -  so that would be after the minimum contact period, and with 28 days notice.

So if this sale falls through, you'll have to go back to this agent, unless/until you've properly terminated their contract.


And also...

There might be a 'withdrawal fee', or similar, to pay when you finally terminate the agreement (after the minimum contract period). Although, if your private sale goes through, but you never terminate the agreement - it might be interesting to see what happens.

Thank you for your reply!

The estate agent is claiming that we are the 'other' agent and their main fee is payable where the purchaser is introduced during the period where they are sole agent. As the private buyer was 'introduced' by us during the sole agency period, should the family friend go on to purchase the property, at the point of exchange, their fees are payable.

We have written to terminate the contract within the 14 day cooling off period. They are now offering to 'reduce' their commission fee as a gesture of 'good will' if we go with the private buyer.

 

eddddy

Digital_bath said:

The estate agent is claiming that we are the 'other' agent and their main fee is payable where the purchaser is introduced during the period where they are sole agent. 

You're not an agent, you are a homeowner selling your home.

If they're saying you're an agent, they're talking nonsense, and they're just taking a punt.

Digital_bath said:

We have written to terminate the contract within the 14 day cooling off period. They are now offering to 'reduce' their commission fee as a gesture of 'good will' if we go with the private buyer.

I realise that you have written to cancel your contract.

I'm suggesting that you save some money by saying that you don't want to cancel the contract after all.

And remind them that no sales commission is due under the contract, for a buyer who wasn't introduced by an agent.


And if you want to be a bit cheeky (like them), say that you are not prepared to make a goodwill gesture towards them by agreeing to pay them a reduced fee. You want to stick with the contract terms that they agreed to and pay no sales commission fee.

Digital_bath

eddddy said:

Digital_bath said:

The estate agent is claiming that we are the 'other' agent and their main fee is payable where the purchaser is introduced during the period where they are sole agent. 

You're not an agent, you are a homeowner selling your home.

If they're saying you're an agent, they're talking nonsense, and they're just taking a punt.

Digital_bath said:

We have written to terminate the contract within the 14 day cooling off period. They are now offering to 'reduce' their commission fee as a gesture of 'good will' if we go with the private buyer.

I realise that you have written to cancel your contract.

I'm suggesting that you save some money by saying that you don't want to cancel the contract after all.

And remind them that no sales commission is due under the contract, for a buyer who wasn't introduced by an agent.


And if you want to be a bit cheeky (like them), say that you are not prepared to make a goodwill gesture towards them by agreeing to pay them a reduced fee. You want to stick with the contract terms and pay no sales commission fee.

I think their contract may get around that if I'm reading the wording correctly.

Digital_bath

See wording attached for the sole agency

eddddy

Digital_bath said:

See wording attached for the sole agency

That's a completely standard Sole Agency contract term. Which is exactly what I was assuming.

Based on what you've said, neither a or b apply - so you don't have to pay them remuneration (i.e. a fee).


If you disagree, which do you think applies - a or b? And why?

saajan_12

Digital_bath said:

eddddy said:

Typically, the situation will be like this.


If it's a 'Sole Agency' agreement, there shouldn't be any need to cancel the agreement. (And therefore you wouldn't have to pay them any costs associated with cancellation.)

You simply tell them that you have found a buyer privately, so you don't want any more viewings arranged, for the moment.

No sales commission should be payable to the estate agent, because the buyer was not introduced by them or introduced by another agent.


If the estate agent is saying they introduced the buyer (or that another agent introduced the buyer), ask them why they believe that. For example, did they talk to the buyer at any point about your property?



Edit to add

But you have to bear in mind that you are still under contract with the estate agent until you terminate the agreement -  so that would be after the minimum contact period, and with 28 days notice.

So if this sale falls through, you'll have to go back to this agent, unless/until you've properly terminated their contract.


And also...

There might be a 'withdrawal fee', or similar, to pay when you finally terminate the agreement (after the minimum contract period). Although, if your private sale goes through, but you never terminate the agreement - it might be interesting to see what happens.

The estate agent is claiming that we are the 'other' agent and their main fee is payable where the purchaser is introduced during the period where they are sole agent. As the private buyer was 'introduced' by us during the sole agency period, should the family friend go on to purchase the property, at the point of exchange, their fees are payable.

There is a specific term for what they want, its "sole selling rights". Unfortunately they didn't put that in their contract (do check). If they had, all advice would have been that you don't sign in the first place. They can't entice you with one contract, and now argue they want the other one after its a done deal. 

The point of "sole agency" is they don't want to compete with another commercial entity who has the resources and motivation to find a buyer, but they realise most clients won't want to pay in the unlikely event the client finds their own private buyer. 

So check the wording in your contract, but unless it says words to the effect of 'sole selling', their argument is dead in the water. No need for goodwill or negotiation. The options are cancel and pay costs of the ad / viewings, or let it run and pay £0. 

eddddy

As an aside - are you a Scientist?

I'm wondering if you're interpreting the word 'Agent' as a scientist would?

In the context of this contract, you need to interpret the word "Agent" using its legal meaning.

FWIW, here's a legal definition of the word 'Agent':

Agent

A person who is recognised at law as having the power to create or alter legal rights, duties or relationships of another person, the principle. The agent facilitates contracts between the principal and a third party (the customer) by introducing the third party, soliciting orders from the third party or by concluding contracts with the third party on behalf of the principal. An agent usually benefits from the relationship by receiving a commission from the supplier. An agent does not contract with customers in the agent's own right and the agent therefore generally has no liability to them.

Link: https://uk.practicallaw.thomsonreuters.com/w-005-7364

Whereas a scientist might define an Agent as being something that produces an effect. (Like you have produced an effect - the effect being the sale of your home. So you are an agent in the sale of your home.) But that's not relevant here.

Digital_bath

saajan_12 said:

Digital_bath said:

eddddy said:

Typically, the situation will be like this.


If it's a 'Sole Agency' agreement, there shouldn't be any need to cancel the agreement. (And therefore you wouldn't have to pay them any costs associated with cancellation.)

You simply tell them that you have found a buyer privately, so you don't want any more viewings arranged, for the moment.

No sales commission should be payable to the estate agent, because the buyer was not introduced by them or introduced by another agent.


If the estate agent is saying they introduced the buyer (or that another agent introduced the buyer), ask them why they believe that. For example, did they talk to the buyer at any point about your property?



Edit to add

But you have to bear in mind that you are still under contract with the estate agent until you terminate the agreement -  so that would be after the minimum contact period, and with 28 days notice.

So if this sale falls through, you'll have to go back to this agent, unless/until you've properly terminated their contract.


And also...

There might be a 'withdrawal fee', or similar, to pay when you finally terminate the agreement (after the minimum contract period). Although, if your private sale goes through, but you never terminate the agreement - it might be interesting to see what happens.

The estate agent is claiming that we are the 'other' agent and their main fee is payable where the purchaser is introduced during the period where they are sole agent. As the private buyer was 'introduced' by us during the sole agency period, should the family friend go on to purchase the property, at the point of exchange, their fees are payable.

There is a specific term for what they want, its "sole selling rights". Unfortunately they didn't put that in their contract (do check). If they had, all advice would have been that you don't sign in the first place. They can't entice you with one contract, and now argue they want the other one after its a done deal. 

The point of "sole agency" is they don't want to compete with another commercial entity who has the resources and motivation to find a buyer, but they realise most clients won't want to pay in the unlikely event the client finds their own private buyer. 

So check the wording in your contract, but unless it says words to the effect of 'sole selling', their argument is dead in the water. No need for goodwill or negotiation. The options are cancel and pay costs of the ad / viewings, or let it run and pay £0. 

There is no mention of 'sole selling rights' in the contract, just a definition of what they define as 'sole agent'

eddddy

Digital_bath said:

There is no mention of 'sole selling rights' in the contract, just a definition of what they define as 'sole agent'

So are you convinced now that no sales commission fee is payable?