Need advice

kiwi07

eddddy said:

kiwi07 said:

A buyer is a ready, willing and able buyer if he is prepared and is in a position to exchange unconditional contracts for the purchase of the property. The client will be liable to pay commission to the agent, in the addition to any other costs or charges agreed, if such a buyer is introduced by the agent in accordance with your instructions and this must be paid even if you subsequently withdraw and contracts for sale are not exchanged, irrespective of the reasons."

That's almost word for word what the regulations say:

Ready, willing and able purchaser

“READY, WILLING AND ABLE PURCHASER

A purchaser is a “ready, willing and able” purchaser if he is prepared and is able to [exchange unconditional contracts for the purchase of your property].

You will be liable to pay remuneration to us, in addition to any other costs or charges agreed, if such a purchaser is introduced by us in accordance with your instructions and this must be paid even if you subsequently withdraw and [unconditional contracts for sale are not exchanged], irrespective of your reasons.”

Link: https://www.legislation.gov.uk/uksi/1991/859/schedule/made

I'm not keen on "ready, willing and able buyer" clauses in estate agent's contracts, because there is so much scope for arguing about what constitutes a "ready, willing and able buyer".

But it's often difficult to persuade estate agents to remove those clauses.

So I try to qualify the clause by adding a something like

"The buyer is only 'ready willing and able' if they are prepared to exchange contracts and complete within a reasonable timescale, and on the terms agreed when the offer was accepted. If the buyer demands a change in price, and/or demands any terms which were not stated when the offer was agreed, they are no longer 'ready, willing and able'."

 

Thanks for suggestions but EA is not engaging and does not express his willingness to make some changes in the agreement. I got this impression as he is not really answering so looks like he remains rock solid in relation to what is already written in the contract. 

Herzlos

kiwi07 said:

eddddy said:

kiwi07 said:

eddddy said:

kiwi07 said:

RAS said:

Walk away.

That is why this agent is so cheap 75% plus vat - because there is a catch! 

I'd be pretty certain it's just badly written contract wording by the estate agent. Phone them and ask, and then get it clarified by email.

Most estate agents are members of the Property Ombudsman Scheme (TPOS) which specifies what an estate agent's contract must say.

In fact, assuming the estate agent is a member of TPOS, and you complain to TPOS, the TPOS rules will override what the estate agent's contract says.

Here's an extract from the TPOS rules:

Fee Entitlement and Client Liability

5t At the time of receiving instructions from a seller you must:

• point out and explain clearly in your written Terms of Business that you may be entitled to a commission fee if that seller terminates your instruction and a memorandum of sale is issued by another agent to a buyer that you have introduced (see definition of effective introduction (*) and supplementary TPO ‘Dual Fee’ guidance) within 6 months of the date your instruction ended and where a subsequent exchange of contracts takes place.

• If no other estate agent is involved this time limit extends to 2 years.
  

Link: https://www.tpos.co.uk/images/codes-of-practice/TPOE27-8_Code_of_Practice_for_Residential_Estate_Agents_A4_FINAL.pdf

I strongly suspect that somebody at the estate agents has just made a mess of paraphrasing the above.

So TPOS confirms that if I sell my property without a new agent, so assuming privately, during 2 years after termination of contract, first EA can still claim their commission? 

No. Maybe it's easier using an example...

• The EA introduces a potential buyer named Sam Smith (e.g. the EA arranges a viewing for Sam Smith)

• Sam Smith doesn't make an offer

• Then you terminate the EA's contract on 1st March 2025

• If Sam Smith changes their mind and buys your house through another EA within 6 months (i.e. before 1st September 2025) - you have to pay the first EA a fee

• If Sam Smith changes their mind and buys your house without another EA being involved within 2 years (i.e. before 1st March 2027) - you have to pay the first EA a fee

But that only applies to Sam Smith, or other people introduced before 1st March 2025 by the first EA (or another EA).

It doesn't apply to anyone introduced after 1st March 2025 (or to any buyer you found privately).


For example, if you move to a new estate agent on 2nd March 2025, and they introduce somebody named Alex Green on 2nd March 2025 and Alex Green goes on to buy your house - you don't have to pay the first EA a fee.


All the above is completely standard, and you will find those terms in the vast majority of estate agents' contracts.

 

Thanks for explanation. May be EA got the wording wrong as it looks like they try to implement Sole selling right for a period of 2 years after termination disregarding if a buyer was first introduced by them or not.

a and b are sub-clauses of 1, where 1 talks about introduction. So it's clearly saying that the 2 year term only applies to buyers introduced. If you look at point b in isolation it's misleading, though.

The email further clarifies that it's to avoid the agent finding a buyer, having the contract ended and the seller proceeding with that buyer. A trick to avoid the commission that was presumably common before that clause was added. He may be reluctant to change the wording there to avoid paying to get a lawyer to review it again or to get caught out. Not that it'd be difficult to clean it up slightly.

Yorkie1

If the EA isn't willing to engage further on this, do you really have to use this EA? 

eddddy

kiwi07 said:
Thanks for suggestions but EA is not engaging and does not express his willingness to make some changes in the agreement. I got this impression as he is not really answering so looks like he remains rock solid in relation to what is already written in the contract. 

I don't think you're approaching this in a good way.  In fact, I suspect that you're annoying the EA.

Instead of repeatedly hassling the EA over each point in the contract... I would write just one email saying something like:

"I am happy to instruct you subject to the following clarifications/amendments to your contract...

a)....
b)...
c)...

If you confirm that you're happy with this, I'll sign the contract and send it back to you."


Then the EA can reply to your email with "yes" or "no".

If the EA replies "yes" - the job is done. Then you can sign the contract (maybe adding a note referring to the email) and send it back.


The EA doesn't have to re-write the contract, or produce any other document, or do anything else.  It's all done.

kiwi07

Yorkie1 said:

If the EA isn't willing to engage further on this, do you really have to use this EA? 

I think you are right - this isn't good..

kiwi07

EA replied and confirmed he will not be amending contract. However explained " 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 agent is involved, an exchange of contracts takes place within 2 years of the date this agreement ended. " The contract has been drawn up by a legal team & there is nothing misleading, as a contract cannot be bias & flavour either party, so there is nothing in that contract that is not acceptable"

GDB2222

Maybe, this isn’t someone to deal with then. 

Yorkie1

I agree with GDB2222.

I would walk away from this EA. There does remain ambiguity in the second part of the clause, as it fails to refer to the buyer being someone originally introduced by the EA.

What is making you so keen to persist with them? Are they the only EA where you want to move to?

kiwi07

Thank you all, I have signed the contract with another EA. It would cost me more but their reviews are very good. So, fingers crossed 🤞 

grumpy_codger

They might be a good EA, but obviously not very bright - as they don't understand the obvious problem with wording and believe that everything "drawn up by a legal team" is perfect and can't be questioned.