Estate Agent(s) Fee Clause - 'Ready Willing and Able Purchaser'

theclangers7

Hello

We are looking to sell our house shortly for the first time in many years and have had a few estate agents round to give us a valuation and their terms of business.

They all seem to have the same clause in their terms - which generally reads 'You will liable to pay our fee or any costs and charges agreed if we find a 'ready willing and able' purchaser and you withdraw for any reason.

Chains can collapse for any number of reasons and I haven't come across paying the estate agent for finding a buyer irrespective of whether you sell your house and move.

I am happy to pay the estate agent if they sell the house but not just find a buyer. Surely such as clause is open to abuse.

Is this clause now normal in the fee section of contracts?

Thanks

RHemmings

The Property Ombudsman Service gives the following definition. Note that this is from 2012, so some time ago. 

https://www.tpos.co.uk/news-media-and-press-releases/press-releases/item/ready-willing-and-able

However, Mr Hamer goes on to explain that 'recently I have seen a number of disputes which have involved agreements where a 'ready, willing and able' basis has been employed but where the determination of the buyer's status was not straightforward. It has to be clearly evident that a buyer is 'ready' to exchange (perhaps they have sold their own property and are therefore unencumbered), are 'able' (they should have funds readily available to pay the deposit required on exchange and be otherwise qualified financially to proceed) and are 'willing'. However there is plenty of room for interpretation within each of these three words, especially whether a buyer can be considered 'willing' when a transaction does not proceed to exchange'.

From 2017: 

https://propertyindustryeye.com/ombudsman-expresses-surprise-that-ready-willing-able-is-part-of-any-agents-contract/

Note that not all agents are members of TPOS. 

Re: these clauses, This is Money says 'Do not accept this'. (From 2024). 

https://www.thisismoney.co.uk/money/mortgageshome/article-13422373/Seven-sneaky-clauses-estate-agent-contracts-cost-dear.html

5. 'Ready, willing and able' clause

'Some estate agent contracts may include a "Ready, willing and able" clause,' says Paula Higgins.

'This means that if someone is ready, willing and able to purchase your property – and even if an exchange of contracts doesn't happen – then the agent will be entitled to a fee.

'Do not accept this. It means you have to pay the agent for finding a buyer, even if you decide not to sell.'

We see these clauses being discussed here quite often, They are common. 

theclangers7

RHemmings - thanks for the reply and information. This is really helpful. I am amazed that agents have this clause! Hopefully I can find one that doesn't or is prepared to remove it from the contract.

ReadingTim

Yes, absolutely standard and ensures that the EA covers the costs they will have incurred in finding a buyer (staff costs, marketing costs, general business overheads) if the vendor simply decides to pull out.  

A chain collapsing isn't a reason to withdraw from a sale - it just means the EA needs to start again - the "ready, willing and able buyer" they previously found is no longer "able", so the clause (and charges) ceases to apply until another is found.  

FlorayG

On the other hand, they do all the work and if you simply change your mind that's unfair on the EA. I think it comes down to the word 'able' - if the buyer withdraws that isn't the agents fault either, but you would argue they were not 'able' to complete the purchase so you are not liable for the fees.
I think if you have a buyer all ready to go and has the money and you suddenly decide you actually don't want to move, you should pay the EA for the time they have invested

theclangers7

ReadingTim and FlorayG - thanks for the replies. My main concern was if the house I am buying falls through due to the upper chain collapsing or a poor survey etc  and therefore I would not want to complete the sale my own property unless I found another suitable property which is never guaranteed. 

eddddy

theclangers7 said:

ReadingTim and FlorayG - thanks for the replies. My main concern was if the house I am buying falls through due to the upper chain collapsing or a poor survey etc  and therefore I would not want to complete the sale my own property unless I found another suitable property which is never guaranteed. 

I agree that 'Ready, Willing and Able Buyer' clauses are undesirable, because they are a bit vague and can be the cause of arguments.

As an example...

• A buyer offers £300k, and you accept

• Following a survey, they reduce their offer to £280k - and say they are "ready, willing and able" to exchange contracts at that price. (But you are not prepared to accept £280k, so the seller withdraws)

Or 

• The buyer introduces new terms during conveyancing, that they hadn't mentioned when they made the offer

• For example: Exchange must happen within 4 weeks; or the seller must apply for retrospective building regs certificate, or repair the roof etc. So the seller withdraws.

But estate agents don't like completely removing that clause, because they are worried about sellers withdrawing on a whim.

So before signing a contract, I generally agree with the estate agent that...

"If the buyer introduces any new terms which they hadn't mentioned prior to making their offer; or they reduce their offer; or fail to exchange contracts within a reasonable or acceptable timescale; then they are not ready, willing and able buyers."

Olinda99

I had exactly this with an agent and I said I was not prepared to accept it and wanted a No Sale No Fee agreement - they immediately agreed to do this. There are a lot of agents who will do a no sale no fee contract.

You are right to be concerned about what happens if you offer on a property and the purchase falls through - you are left with a sale that you must complete or pay the agents fees even though it is not your fault that the purchase has fallen through

Don't accept it

DullGreyGuy

ReadingTim said:

Yes, absolutely standard and ensures that the EA covers the costs they will have incurred in finding a buyer (staff costs, marketing costs, general business overheads) if the vendor simply decides to pull out.  

A chain collapsing isn't a reason to withdraw from a sale - it just means the EA needs to start again - the "ready, willing and able buyer" they previously found is no longer "able", so the clause (and charges) ceases to apply until another is found.  

That assumes its the buyer of the OP's house that causes the collapse, the OP is thinking of other parts of the chain failing, most notably the property which they were going to buy but they're then gazumped or the vendor takes it off the market. At that point the OP's buyer is still ready, willing and able to buy but the OP isnt able to sell. 

saajan_12

The standard model of estate agents has become conditional on the purchase in this country, with the commissions %s priced accordingly, with the successful sales effectively covering the cost of all the failed ones. However it doesn't have to be like that.. nothing wrong in principle with a fixed fee for the work they do, similar to solicitors, with the average price lowered accordingly as you pay even if it doesn't sell. The upside is its arguably more fair as the agent doesn't have wasted unpaid work just because a party changed their mind. The downside is the agent is less incentivised to find the best, most committed buyer.. though arguably that's hard to tell. 

Anyway putting aside what's fair or unfair, this clause sort of tries to bridge the gap, ie remove the risk of seller changing their mind, but not the buyer. However that middle ground can be inadvisable because
(a) hard to define the line between RWA buyer and not;
(b) the commission % may still be priced the same as one that's conditional on exchange

theclangers7

Thanks Orlinda99.

With two agents  the terms had in bold 'Agency Terms No Sale No Fee' and then in the small print stated that the fee would still be still be payable if they found a RWA buyer and exchange didn't happen for any reason. This is the bit that confused me! I'll ask for clarification or probably just steer clear of them as this lacks any form of transparency.