Estate Agents TC - when selling

20122013

In the Estate Agent's contract, one of their clauses read:

'By signing this agreement you agree that if you do not pay our commission within seven days of

the sale being completed, you will pay interest on our commission at a rate of 4% a year above the

HSBC Plc base rate. If we have to instruct solicitors because you do not pay any amount you owe

us under this agreement, you must pay back to us any reasonable costs we have to pay (not

including VAT)'

As a first time seller, would there be any reason why I may not get the funds from the buyer when the sale has gone through? / I will not be able to pay the EA fees from the sell? 

Appreciate your thoughts.

user1977

If you don't get the funds from the buyer then the sale won't complete. In practice it's normal for your solicitor to settle the EA's bill from the sale proceeds. Nothing there to worry about really.

Tabieth

If you don’t get the funds then there’s no sale and you haven’t completed. Nothing to worry about. 

20122013

Another clause reads: 'You must still pay our fee in full if a buyer exchanges contracts but fails to complete' is there any risk with this? is there a way to minimise it?  or worth getting an insurance cover?

Tabieth

20122013 said:

Another clause reads: 'You must still pay our fee in full if a buyer exchanges contracts but fails to complete' is there any risk with this? is there a way to minimise it?

In that case the buyer is in breach of contract and so you’ll be ok. Plus, it’s very rare. 

20122013

Tabieth said:

20122013 said:

Another clause reads: 'You must still pay our fee in full if a buyer exchanges contracts but fails to complete' is there any risk with this? is there a way to minimise it?

In that case the buyer is in breach of contract and so you’ll be ok. Plus, it’s very rare. 

Great to know, as the agent said I will still need to pay their fee £6K + VAT even though no sell.

RAS

20122013 said:

Another clause reads: 'You must still pay our fee in full if a buyer exchanges contracts but fails to complete' is there any risk with this? is there a way to minimise it?  or worth getting an insurance cover?

This is incredibly rare but does occasionally happen. I know of three cases on MSE, one of which eventually resolved when someone higher up the chain fixed it. The person who fails to complete is liable for the costs of everyone else in the chain who is disrupted. In that case most of the chain held their nerve and completed late. 

IRL I know of one case which completed 36 hours late. Cost to the delay, hotel rooms, meals and extra remover's costs. Made no difference to the EA fees. 

Olinda99

What you need to look out for and reject is a 'ready, willing and able' clause

20122013

RAS said:

20122013 said:

Another clause reads: 'You must still pay our fee in full if a buyer exchanges contracts but fails to complete' is there any risk with this? is there a way to minimise it?  or worth getting an insurance cover?

This is incredibly rare but does occasionally happen. I know of three cases on MSE, one of which eventually resolved when someone higher up the chain fixed it. The person who fails to complete is liable for the costs of everyone else in the chain who is disrupted. In that case most of the chain held their nerve and completed late. 

IRL I know of one case which completed 36 hours late. Cost to the delay, hotel rooms, meals and extra remover's costs. Made no difference to the EA fees. 

I agree, I am not in a chain but the buyer might be - current market, etc

TheJP

20122013 said:

Tabieth said:

20122013 said:

Another clause reads: 'You must still pay our fee in full if a buyer exchanges contracts but fails to complete' is there any risk with this? is there a way to minimise it?

In that case the buyer is in breach of contract and so you’ll be ok. Plus, it’s very rare. 

Great to know, as the agent said I will still need to pay their fee £6K + VAT even though no sell.

Well yes technically true but you would recoup the costs from the buyer.

eddddy

20122013 said:

Tabieth said:

20122013 said:

Another clause reads: 'You must still pay our fee in full if a buyer exchanges contracts but fails to complete' is there any risk with this? is there a way to minimise it?

In that case the buyer is in breach of contract and so you’ll be ok. Plus, it’s very rare. 

Great to know, as the agent said I will still need to pay their fee £6K + VAT even though no sell.

If you're really worried about that clause (or any other clause), you can clarify by email that you will sign their contract on the understanding that the clause will be removed or modified.

I doubt that the estate agent would walk away from an instruction, over that clause.

Your email (and the reply) should be sufficient evidence of the agreed change, but you could also add a note to the contract document before signing it.