Estate agent commission when they haven’t done the introduction.

Dave2345

Hi,

I am after some advice regarding estate agent commission when they haven’t done the introduction.

I have been left a part share in a property and would like to buy the other share. The property has been valued and the intention is to put the house on the market to see what interest there is. I was always under the impression that if an agent didn’t do the introduction and I was a named interested party from the outset then no commission would be payable.

The first agent I have spoken to has said the full fee would be payable if they have marketed the property irrespective of me being a named party and them having not done the introduction. I had previously spoken to someone from this agents on the phone who said no fee but they may not have been the correct person to be asking. The person who did the valuation was an “associate partner” and was adamant there would be a charge as we are using their service to test the market\value.

 

 

 

 

eddddy

Just to be clear - are you saying that you don't want to actually sell the property on the open market, you just want the estate agent to test market the property to give you some feedback?

(If so, I'm not surprised that the Associate Partner is 'unimpressed' with your idea, and would want a fee to compensate them for their time and effort.)


The general rule would be to read their contract to see what it says. But in this case, it sounds like the Associate Partner is adding some additional 'special terms' to the contract - because of the unusual situation. i.e. The Special Term is that you will have to pay them a fee for their test marketing.


The Associate Partner is free to request any special terms they choose before the contract is agreed, just like you are free to request any special terms you choose before the contract is agreed

If the other party doesn't agree to the special terms - then then the contract won't happen and both parties walk away.

swingaloo

Did you pay the agent for doing  the valuation or did you have it done one pretence the house would b going up for sale?

Dave2345

Thanks for the reply.

If the house goes beyond my budget, then they or whichever agent will get the sale. If its within my budget, then I will buy. I’m not going to purchase on the basis of their valuations and until it goes to market then there’s no way of knowing it’s true value.  

I just wasn’t sure if what he was saying was correct as the person I spoke to on the phone from there and their agent who came to value mine last week thought no fee would be charged.

 If they can impose any special terms they like then we will have to see when there is a contract presented or go with someone else who doesn’t charge in the event of there being an already interested party. Whilst they may have done some work they haven’t found me as a buyer which I thought was what they had to do\prove to be entitled to their fee.

Dave2345

swingaloo nothing was paid to any of the agents for the valuations

swingaloo

Its highly unusual for an agent to come out and value a property without a fee being charged if you are not going to market. 
If you want them to value it and put it up for sale but then not charge anything if you decide to buy then why would you expect them to do the wok and not get paid. It will still need photographs and marketing. Are you expecting them to do that for no charge?

martindow

swingaloo said:

Its highly unusual for an agent to come out and value a property without a fee being charged if you are not going to market.

It must be quite common for people to ask agents to come out if they are weighing up their options.  For instance they may only decide to go ahead if the agent suggest the value is above a certain figure.  Or they might want an idea of its value to guide looking at houses that they might move to.  Or just having second thoughts.  Neither of these would necessarily result in the house going up for sale in the short term.

Agents would be foolish to pick and choose too much if someone asks them over to look at a house with a view to selling.  Many of their visits will come to nothing for various reasons, but the only thing they can be sure of is that if they don't visit they will definitely not get the business.

Bookworm105

So
a) it goes on the market at a price you cannot afford and gets an offer - you sell your share 

b) it goes on the market at a price you cannot afford but gets offers below that - you have to match or beat the lower offer in order to buy. EA commission is therefore very relevant since it should apply in both cases to be an even field since the EA have marketed it successfully.

c) it goes on the market at a price you cannot afford and there is no interest - you agree a lower price with the other owner and buy it for a price you can afford. Morally the EA should get something for their work, so read their contract!

FreeBear

Dave2345 said: If the house goes beyond my budget, then they or whichever agent will get the sale. If its within my budget, then I will buy. I’m not going to purchase on the basis of their valuations and until it goes to market then there’s no way of knowing it’s true value.

Get a RICS surveyor to do a valuation. It will cost a few quid, but the valuation should be pretty close to what it would achieve on the open market.

Albermarle

swingaloo said:

Its highly unusual for an agent to come out and value a property without a fee being charged if you are not going to market. 
If you want them to value it and put it up for sale but then not charge anything if you decide to buy then why would you expect them to do the wok and not get paid. It will still need photographs and marketing. Are you expecting them to do that for no charge?

I thought most EA's will do a valuation for free. Normally you would get three round and  they would all bid for the business. One would win, but you would not expect the other two to charge you.

StarkCouzens

If I was the Estate Agents, I would not engage with this deal. As theres a 50/50 chance you would deal with me. Most agents would do a free valuation but its only a guide and most would over inflate the price to win your business.

I would first have to spend time valuing the property, then pay a professional photographer to do the photos and floor plan. I would then be spending my time showing people around. Cost to me would be quit considerable.

From a moral point of view, this is not the way to go, imagine someone really loved the house only to be told the owners has changed their mind. I know it happens all the time but it's just a waste of everyone's time and effort. The end result might end up with the sale but not guaranteed.

If this was Probate, they would not allow it. As other have mentioned, a RICS qualified valuation would do the job, just ask them for a standard mortgage valuation, they will do this style much cheaper and will give you a figure.

Also dont think putting a house on the market and getting offers is an accurate way of getting a valuation. You could be going in at high season meaning the price is better, or low season and the price will be lower. It's not an accurate representation of the properties valuation.