Need advice

kiwi07

Estate Agent which I think to appoint works on 0.75% +vat selling fees has few sections in the contract which I am not sure about: 
1. Marketing issues
The client agrees that details of the property may/will be circulated to the offices of members of ****** on a sub-agency basis and they will then also be authorised to offer the property for sale at no extra cost to the client. A sub - agent is defined as a person/agent who receives and acts upon instructions from a principal agent rather than directly from the seller. Remuneration will be by separate agreement between the agents concerned. 
Yes x   No x

Does anyone know what this is about?

2. Sole agency /joint sole agency. - liability to pay commission.
Where the agent acts on the clients behalf as sole agent /joint sole agent, the client will be liable to pay remuneration to the sole agent / joint sole agent , in addition to any other costs or charges agreed , if at any time unconditional contracts for sale of the property are exchanged:
1. With a buyer introduced by the agent during the period of the agents sole/joint sole agency or with whom the agent had negotiations about the property during that period or,
With a buyer introduced by another agent during that period. 
The agent will be entitled to a commission fee if the client terminates this agreement and either:
a) a memorandum of sale is issued by another agent to a buyer that the agent has introduced within 6 months of the date this agreement ended and where a subsequent exchange of contracts takes place , or 
b) if no other estate agent is involved,  an exchange of contracts takes place within 2 years of the date this agreement ended. 
Reference above to the exchange of contracts shall be deemed to include completion of a sale of the property where no contracts are exchanged. 

Does this sound not good? 

Would appreciate some advice.

eddddy

kiwi07 said:

1. Marketing issues
The client agrees that details of the property may/will be circulated to the offices of members of ****** on a sub-agency basis and they will then also be authorised to offer the property for sale at no extra cost to the client. A sub - agent is defined as a person/agent who receives and acts upon instructions from a principal agent rather than directly from the seller. Remuneration will be by separate agreement between the agents concerned. 
Yes x   No x

Does anyone know what this is about?

You will be instructing Estate Agent A to sell your property.

Estate Agent A might pass details of your property to Estate Agent B, Estate Agent C etc - so that they can try to sell your property as well.

Estate Agent A will have agreements with Estate Agent B and Estate Agent C about how the 0.75%+vat would be split between them, if B or C find a buyer. It won't cost you any extra if B or C find a buyer.

I don't see a problem with that.

kiwi07 said:

2. Sole agency /joint sole agency. - liability to pay commission.
Where the agent acts on the clients behalf as sole agent /joint sole agent, the client will be liable to pay remuneration to the sole agent / joint sole agent , in addition to any other costs or charges agreed , if at any time unconditional contracts for sale of the property are exchanged:
1. With a buyer introduced by the agent during the period of the agents sole/joint sole agency or with whom the agent had negotiations about the property during that period or,
With a buyer introduced by another agent during that period. 
The agent will be entitled to a commission fee if the client terminates this agreement and either:
a) a memorandum of sale is issued by another agent to a buyer that the agent has introduced within 6 months of the date this agreement ended and where a subsequent exchange of contracts takes place , or 
b) if no other estate agent is involved,  an exchange of contracts takes place within 2 years of the date this agreement ended. 
Reference above to the exchange of contracts shall be deemed to include completion of a sale of the property where no contracts are exchanged. 

That is a completely standard 'Sole Agency Agreement'.

Any estate agent that offers 'Sole Agency' should have very similar wording in their contract.

I'm not sure which parts you're concerned about and/or don't understand, but in simple terms it means....

• If the estate agent finds you a buyer, you have to pay the estate agent a fee

• While your contract is running with this estate agent, you shouldn't use another estate agent as well. If you do, and the other estate agent finds a buyer - you'll probably have to pay a fee to both estate agents

• If this estate agent introduces somebody (e.g. arranges a viewing for somebody), and then you end the estate agent's contract - if that 'somebody' later buys your house, you still have to pay the estate agent a fee - for up to 6 months / 2 years.

Other things to look out for in the contract include...

• Is there any mention of a 'Ready Willing and Able' buyer? That can be a bit messy sometimes

• Is there any mention of fees that have to be paid if the property doesn't sell? Sometimes called 'Withdrawal fees', 'Termination fees', 'Marketing fees' etc.

• Is there mention of any other types of fees?

• How long is the 'Minimum Contract Period'? You should try to negotiate that down to about 8 weeks. (That means you can sack them after 8 weeks, if it turns out they are useless.)

GDB2222

I don’t want to sound patronising, but well done! Loads of people just sign these contracts without reading them properly and understanding them. The time to negotiate any changes in the terms of the contract is now, before you sign it.

 I don’t think you need to worry too much about the sub contract clause in the contract, because with only 0.75% fee the agent will want to keep it all for himself! 

kiwi07

eddddy said:

kiwi07 said:

1. Marketing issues
The client agrees that details of the property may/will be circulated to the offices of members of ****** on a sub-agency basis and they will then also be authorised to offer the property for sale at no extra cost to the client. A sub - agent is defined as a person/agent who receives and acts upon instructions from a principal agent rather than directly from the seller. Remuneration will be by separate agreement between the agents concerned. 
Yes x   No x

Does anyone know what this is about?

You will be instructing Estate Agent A to sell your property.

Estate Agent A might pass details of your property to Estate Agent B, Estate Agent C etc - so that they can try to sell your property as well.

Estate Agent A will have agreements with Estate Agent B and Estate Agent C about how the 0.75%+vat would be split between them, if B or C find a buyer. It won't cost you any extra if B or C find a buyer.

I don't see a problem with that.

kiwi07 said:

2. Sole agency /joint sole agency. - liability to pay commission.
Where the agent acts on the clients behalf as sole agent /joint sole agent, the client will be liable to pay remuneration to the sole agent / joint sole agent , in addition to any other costs or charges agreed , if at any time unconditional contracts for sale of the property are exchanged:
1. With a buyer introduced by the agent during the period of the agents sole/joint sole agency or with whom the agent had negotiations about the property during that period or,
With a buyer introduced by another agent during that period. 
The agent will be entitled to a commission fee if the client terminates this agreement and either:
a) a memorandum of sale is issued by another agent to a buyer that the agent has introduced within 6 months of the date this agreement ended and where a subsequent exchange of contracts takes place , or 
b) if no other estate agent is involved,  an exchange of contracts takes place within 2 years of the date this agreement ended. 
Reference above to the exchange of contracts shall be deemed to include completion of a sale of the property where no contracts are exchanged. 

That is a completely standard 'Sole Agency Agreement'.

Any estate agent that offers 'Sole Agency' should have very similar wording in their contract.

I'm not sure which parts you're concerned about and/or don't understand, but in simple terms it means....

• If the estate agent finds you a buyer, you have to pay the estate agent a fee

• While your contract is running with this estate agent, you shouldn't use another estate agent as well. If you do, and the other estate agent finds a buyer - you'll probably have to pay a fee to both estate agents

• If this estate agent introduces somebody (e.g. arranges a viewing for somebody), and then you end the estate agent's contract - if that 'somebody' later buys your house, you still have to pay the estate agent a fee - for up to 6 months / 2 years.

Other things to look out for in the contract include...

• Is there any mention of a 'Ready Willing and Able' buyer? That can be a bit messy sometimes

• Is there any mention of fees that have to be paid if the property doesn't sell? Sometimes called 'Withdrawal fees', 'Termination fees', 'Marketing fees' etc.

• Is there mention of any other types of fees?

• How long is the 'Minimum Contract Period'? You should try to negotiate that down to about 8 weeks. (That means you can sack them after 8 weeks, if it turns out they are useless.)

If you read it says if I sell my house during 2 years I end my contract with them I still have to pay them even if no buyer was first introduced by them? Or if I then sell during 2 years without using a new estate agent? 

"b) if no other estate agent is involved,  an exchange of contracts takes place within 2 years of the date this agreement ended. 
Reference above to the exchange of contracts shall be deemed to include completion of a sale of the property where no contracts are exchanged."

eddddy

kiwi07 said:

If you read it says if I sell my house during 2 years I end my contract with them I still have to pay them even if no buyer was first introduced by them? Or if I then sell during 2 years without using a new estate agent? 

"b) if no other estate agent is involved,  an exchange of contracts takes place within 2 years of the date this agreement ended. 
Reference above to the exchange of contracts shall be deemed to include completion of a sale of the property where no contracts are exchanged."

The contract is saying that if you sell to somebody introduced by the estate agent within 2 years (without using an estate agent) - you have to pay the estate agent a fee.

If you sell to anyone else (not introduced by the estate agent) after the contract ends, you don't have to pay the estate agent a fee.


I agree that the wording is a little clumsy, so if you want to be 100% certain, write an email to the estate agent asking them to reply confirming the above. And retain their emailed reply with the contract. Then there can be no argument.

Brie

b) if no other estate agent is involved,  an exchange of contracts takes place within 2 years of the date this agreement ended. 


That sounds to me that if you sell the house yourself to, say, your second cousin 18 months after the contract ends then you still have to pay the EA their fee.  I've never heard of this being a standard thing though I have heard of a 6 month limit.  2 years is just toooo long and I'd be amending that prior to signing.  

Slinky

These contracts need to be mutually agreed. Our EA trying slipping in Sole Selling Rights under the guise of Sole Agency. I crossed through and initialed anything I wasn't in agreement with, before signing and giving it back to the agent. They accepted this.

Anything you don't like, get your ballpoint pen on.

Yorkie1

Brie said:

b) if no other estate agent is involved,  an exchange of contracts takes place within 2 years of the date this agreement ended. 


That sounds to me that if you sell the house yourself to, say, your second cousin 18 months after the contract ends then you still have to pay the EA their fee.  I've never heard of this being a standard thing though I have heard of a 6 month limit.  2 years is just toooo long and I'd be amending that prior to signing.  

I agree with Brie's point. The way it is currently drafted is that in a) the 6 month period runs if another EA is involved in a sale to someone that the first EA (or their sub-EAs) introduced. That seems fine, although I don't know if 6 months is a standard period.

But the specific exclusion in b) of the reference to the buyer having been initially introduced by  the 1st EA means that if you sell to anyone else, without using a different EA, then you have to pay commission if it's in the following 2 years. The omitted text needs to be inserted so that it is clear that you only have to pay commission if the buyer was originally introduced by the 1st EA. And two years is just taking the mick.

kiwi07

Slinky said:

These contracts need to be mutually agreed. Our EA trying slipping in Sole Selling Rights under the guise of Sole Agency. I crossed through and initialed anything I wasn't in agreement with, before signing and giving it back to the agent. They accepted this.

Anything you don't like, get your ballpoint pen on.

Thanks, this is exactly what my EA is saying - sounds like wanting sole agency right even after contracts ends.

You are right but what if the agent isn't willing to amend anything from the agreement? 

RAS

Walk away.

Yorkie1

eddddy said:

kiwi07 said:

If you read it says if I sell my house during 2 years I end my contract with them I still have to pay them even if no buyer was first introduced by them? Or if I then sell during 2 years without using a new estate agent? 

"b) if no other estate agent is involved,  an exchange of contracts takes place within 2 years of the date this agreement ended. 
Reference above to the exchange of contracts shall be deemed to include completion of a sale of the property where no contracts are exchanged."

The contract is saying that if you sell to somebody introduced by the estate agent within 2 years (without using an estate agent) - you have to pay the estate agent a fee.

If you sell to anyone else (not introduced by the estate agent) after the contract ends, you don't have to pay the estate agent a fee.


I agree that the wording is a little clumsy, so if you want to be 100% certain, write an email to the estate agent asking them to reply confirming the above. And retain their emailed reply with the contract. Then there can be no argument.

This isn't a correct interpretation of the clause. Sub-clause a) states commission is due if selling, via another EA, within 6 months, to someone introduced by the first EA. Sub-clause b) states commission is due if selling, not via another EA, within 2 years, full stop. 

The difference between the two clauses would be taken to be deliberate (even if it's not what was intended).  The use of 'either / or' means you can't read across from one sub-clause to another. It's wrongly drafted and would need amending to either of the following:

[quote]
The agent will be entitled to a commission fee if the client terminates this agreement and either:
a) a memorandum of sale is issued by another agent to a buyer that the agent has introduced within 6 months of the date this agreement ended and where a subsequent exchange of contracts takes place , or 
b) if no other estate agent is involved, an exchange of contracts takes place with a buyer that the agent has introduced within 2 years of the date this agreement ended. [/quote]

or something along the lines of:

[quote]
The agent will be entitled to a commission fee if the client terminates this agreement and subsequently exchanges contracts with a buyer that the agent has introduced, either:
a) where a memorandum of sale is issued by another agent, within 6 months of the date this agreement ended and where the subsequent exchange of contracts takes place, or 
b) if no other estate agent is involved, the exchange of contracts takes place within 2 years of the date this agreement ended. [/quote]

If the EA won't agree to amend the contracts, then find another EA.