Is this good estate agents t&c?

kiwi07

I am looking for a good estate agent from high street and looking at their contracts. One if them offered 1% plus vat to sell my property. I worry about some of the t&c in contract which says " The property can be withdrawn at the end of 14 days notice period. Please note however that this does not remove your liability in respect of purchases we have already introduced to your property. 1. Sole agency - you will be liable to pay remuneration to us, in addition to any other costs or charges agreed, if at any time unconditional contracts for the sale of the property are exchanged with a purchaser introduced by us during the period of our sole agency or with whom we had negotiations about the property during that period , or with purchaser introduced by another agent during that period. If the property is withdrawn from the market , or our agency then our charges will represent the recovery of our disbursement costs up to any agreed amount as referred to in the instruction letter. Notwithstanding the aforementioned,  where the property is withdrawn from the market or our agency where we have introduced a purchaser ready, willing and able to proceed and a survey has been undertaken,  then our charges will represent a charge of £600 including vat. The account for this will be due for payment within 7 days of you receiving it. The recovery of our disbursement costs and charges are referred to above is without prejudice to our right to claim commission if the circumstances set out in clause 1 above apply  (even if we recovered our costs from you we retain the right to claim commission from you if the circumstances in paragraph 1 above apply). 
Should I stay clear of this agent? 

FlorayG

This is quite normal and a good offer
It basically is saying that if they introduce a potential buyer and you then take the house off their books and sell to this person privately you will still be liable to pay the EA. That's a reasonable precaution on their behalf

kiwi07

What about £600 mentioned? Is this reasonable withdrawal fee?
What's worries me is having "ready, willing, able purchaser " clause as well. 

saajan_12

kiwi07 said:

 " The property can be withdrawn at the end of 14 days notice period. Please note however that this does not remove your liability in respect of purchases we have already introduced to your property. 

Perfectly normal, if you cancel in 14 days then you just pay their costs eg for photographers, etc. 

kiwi07 said:

1. Sole agency - you will be liable to pay remuneration to us, in addition to any other costs or charges agreed, if at any time unconditional contracts for the sale of the property are exchanged with a purchaser introduced by us during the period of our sole agency or with whom we had negotiations about the property during that period , or with purchaser introduced by another agent during that period. 

Perfectly normal for a sole agency contract. Basically they don't want you engaging another agent but if you find a private sale then no fee. 

kiwi07 said:

If the property is withdrawn from the market , or our agency then our charges will represent the recovery of our disbursement costs up to any agreed amount as referred to in the instruction letter. 

This should be limited to only applying during their contracted term. You should be able to terminate the contract after a certain minimum term and a notice period, without that being considered as withdrawing. I would want this spelled out. 

kiwi07 said:

Notwithstanding the aforementioned,  where the property is withdrawn from the market or our agency where we have introduced a purchaser ready, willing and able to proceed and a survey has been undertaken,  then our charges will represent a charge of £600 including vat. The account for this will be due for payment within 7 days of you receiving it. The recovery of our disbursement costs and charges are referred to above is without prejudice to our right to claim commission if the circumstances set out in clause 1 above apply  

This is problematic.. they're sneaking in penalties conditional on a RWA buyer, which is very different to a sole agency contract. The purchase could fall through for 101 other reasons and while you wouldn't owe the full fee, £600 is still steep for not actually finding a successful buyer. Then to add insult, they seem do double up by saying if if they find a RWA buyer and you go to another agent, they get the 1% fee plus £600?? That would be crazy, as the most they should get is the 1%. 

eddddy

kiwi07 said:

What about £600 mentioned? Is this reasonable withdrawal fee?
What's worries me is having "ready, willing, able purchaser " clause as well. 

I'm unhappy about withdrawal fees.

To me, it's like the estate agent saying...

"In our professional opinion, we believe that we can sell your property for our valuation of £x.

But if it turns out that our professional opinion is wrong, or it turns out that we are incompetent and therefore we're unable to sell your property....

... you still have to cover our costs."


In my local area, there's only a few estate agents who charge withdrawal fees - and I would always avoid those agents.

But in some areas it seems to be standard practice for all estate agents to charge withdrawal fees - so it's harder to avoid them. (But you can try negotiating.)

eddddy

saajan_12 said:

kiwi07 said:

 " The property can be withdrawn at the end of 14 days notice period. Please note however that this does not remove your liability in respect of purchases we have already introduced to your property. 

 Perfectly normal, if you cancel in 14 days then you just pay their costs eg for photographers, etc. 

  @saajan_12 I think you've misunderstood.

You're talking about the 14 day cancellation period (aka the cooling off period) after 'signing' the contract.

The contract is talking about the 14 day notice period that is required when terminating the contract (or withdrawing from the contract).

saajan_12 said:

This should be limited to only applying during their contracted term. You should be able to terminate the contract after a certain minimum term and a notice period, without that being considered as withdrawing. I would want this spelled out. 

Do you mean "This should be limited to only applying during their minimum contract term."

But in any case, I have never seen an estate agent's contract that allows the seller to withdraw during the minimum contract period. 

The contracts always require that you wait until minimum contract term is finished.

kiwi07

eddddy said:

kiwi07 said:

What about £600 mentioned? Is this reasonable withdrawal fee?
What's worries me is having "ready, willing, able purchaser " clause as well. 

I'm unhappy about withdrawal fees.

To me, it's like the estate agent saying...

"In our professional opinion, we believe that we can sell your property for our valuation of £x.

But if it turns out that our professional opinion is wrong, or it turns out that we are incompetent and therefore we're unable to sell your property....

... you still have to cover our costs."


In my local area, there's only a few estate agents who charge withdrawal fees - and I would always avoid those agents.

But in some areas it seems to be standard practice for all estate agents to charge withdrawal fees - so it's harder to avoid them. (But you can try negotiating.)

I am also very much unhappy about withdrawal fee but the 2nd agent I spoken with offered £250 plus vat a withdrawal fee if the seller withdraw or pull out of sale. That one wants  £2000 plus vat or 1.5% plus vat for the sale." The sole agency period: the period from today until the earlier of unconditional  exchange o contracts for the sale of a property and the expiry of 28 days written notice given by either party. The sole agency created by this agreement means that you will be liable to pay remuneration to us if at any time unconditional contracts for the sale of the property are exchanged. With a purchaser introduced by us during the sole agency period or with whom we had negotiations about the property during sole agency period. With a purchaser to whom a sale of the property (whether during or after the sole agency period arose from internet advertising during the sole agency period.  With a purchaser introduced by another agent during the sole agency period. No upfront cost. No contract tie in period. 28 days notice period if you wish to withdraw/instruct a joint agent.  Withdrawal fee £250 plus vat if the seller pull out of the sale/withdraw. 

The 3d estate agent offers 1.25 plus vat or 1% plus vat if I do all the viewings. In the contract there are 2 options: option 1 sole agency fee % or fixed fee of £2000 plus vat ( included in the fee is all advertising and other expenses agreed. Under sale fee option 1 marketing will continue until terminated giving 14 days notice. . Under sale option 2 upfront fee marketing will continue for a maximum duration of 24 months or until terminated by vendors. No sale fee will be payable for the sale of the property unless a sale reaches legal completion). Or second option upfront fee £ .00 ( including in the sale fee is all advertising and other expenses agreed. On completion of the sale no other charges be payable unless previously agreed in writing.) The sellers will be liable to pay us due commission in the addition to any other costs and charges agreed, if at any time unconditional contracts are exchanged with a purchaser introduced by us during the period of our sole agency,  or with whom we had negotiations about the property during that period,  or with a purchaser introduced by another agent/ individual during that period. The sellers are jointly and severally liable for the costs and charges (which means that they will each be liable for all sums under the agreement and not just a portion of them). Ready, willing and able . Withdrawal after a sale has been agreed. In the event of a buyer being found , terms been agreed and a sale memorandum being issued for the sale of a property in accordance with the clients instruction and the client subsequently terminates these instructions for any reason whatsoever and contracts are not exchanged, the client will be liable to pay us the Sale Commission fee if a ready, willing and able purchaser has been introduced by us. A purchaser is ready willing and able if they are prepared and able to exchange unconditional contracts for the purchase of the property at the agreed price and have provided identification in a suitable form and a proof of their financial ability to proceed with the purchase. Withdrawal- property can be withdrawn from the market at any time without penalty upon receipt of 14 days written notice. 

kiwi07

3d agent - I enquired about what the Sale commission fee is going to be in the event of the seller pull out of the sale. Its 1% of the asking price if the seller pull out prior to completion after contracts are exchanged. They said it's only happened twice and on both occasions they said agreed only pay a portion of the overall fee. 

So which one from those 3 you think is more or less fair and reasonable?  

eddddy

There's a few inappropriate terms scattered through those contracts...

For example...

• A Sole Agency agreement shouldn't include the word "individual" here: "...or with a purchaser introduced by another agent/ individual during that period"

• This is a worrying term, and I'm not  sure that it's enforceable "...arose from internet advertising during the sole agency period". It could result in huge arguments. How do you prove that a buyer did/didn't see an internet advert. And/or if they glimpsed it for 2 seconds, does that count?

• And this sounds like nonsense, but could still be the cause of a big argument: "In the event of a buyer being found , terms been agreed and a sale memorandum being issued for the sale of a property in accordance with the clients instruction and the client subsequently terminates these instructions for any reason whatsoever and contracts are not exchanged, the client will be liable to pay us the Sale Commission fee if a ready, willing and able purchaser has been introduced by us."

The last bullet point sounds like 'an amateur' threw a few extra words into the contract, and messed it up.

But apart from that, I guess you can see what the withdrawal fees are.

As you say, "Ready, Willing and Able" clauses are bad - they are vague, and can result in huge arguments.

kiwi07

eddddy said:

There's a few inappropriate terms scattered through those contracts...

For example...

• A Sole Agency agreement shouldn't include the word "individual" here: "...or with a purchaser introduced by another agent/ individual during that period"

• This is a worrying term, and I'm not  sure that it's enforceable "...arose from internet advertising during the sole agency period". It could result in huge arguments. How do you prove that a buyer did/didn't see an internet advert. And/or if they glimpsed it for 2 seconds, does that count?

• And this sounds like nonsense, but could still be the cause of a big argument: "In the event of a buyer being found , terms been agreed and a sale memorandum being issued for the sale of a property in accordance with the clients instruction and the client subsequently terminates these instructions for any reason whatsoever and contracts are not exchanged, the client will be liable to pay us the Sale Commission fee if a ready, willing and able purchaser has been introduced by us."

The last bullet point sounds like 'an amateur' threw a few extra words into the contract, and messed it up.

But apart from that, I guess you can see what the withdrawal fees are.

As you say, "Ready, Willing and Able" clauses are bad - they are vague, and can result in huge arguments.

I don't know but these 3 all look bad, 3d agent has the biggest withdrawal fee really, they just called the Sale Commission fee instead of using term of withdrawal fee. One way or another they want you to pay  for their business no matter of your outcome. Only 2nd agent has the lowest withdrawal fee from them but wants more from the actual sale. 

eddddy

Just to clarify, there are 2 different 'types' of withdrawing...

1) The minimum contract term has finished, you haven't received an acceptable offer. ... and maybe you're withdrawing because:

- You want to move to a different estate agent
- You've decided not to sell after all


2) You've received an offer and accepted it. The buyer is "ready willing and able" to proceed. But you decide to withdraw... maybe because:

- You've decided not to sell after all


If it's a 'type 2 withdrawal', an agent with a "ready wiling and able buyer" clause will normally expect you to pay their full selling fee.  This is what agent 3 is saying (or trying to say in a badly worded clause)

The problem is deciding whether a buyer really is "ready wiling and able" - if/when you withdraw.

If it's a 'type 1 withdrawal' a lower withdrawal fee (or no withdrawal fee) is due.