Any issues with this estate agent contract?

yourlocalcheesemonger

Perhaps someone here is better than me at spotting potential issues! Here it is uploaded to filebin... https://filebin.net/4lueewc6s32ihm5e

The parts that I don't like are:

"PAYMENT BY SOLICITOR" seems like they are trying to bind my solicitor to this agreement too?

"WITHDRAWAL AFTER A SALE HAS BEEN AGREED" with a purchaser being defined as "able, willing and ready"

"SOLE SELLING RIGHTS" especially part b which has no time limit.

Is this just a normal contract now, or should I ask them to remove these things. Last time I sold a house was many years ago and I don't remember terms as punitive as these.

Thanks

km1500

It is fairly standard practice for the solicitor to pay the estate agent from the completion monies

Get rid of the ready-willing and able clause and insist on no sale no fee. The problem with it is if you accept an offer and find a place and everything is going swimmingly and then suddenly the place you are buying falls through then you are committed to selling no matter what as your purchaser will be Ready Willing and Able and you could find yourself 'homeless'. Don't touch it with a barge pole

Finally sole selling rights simply means that even if you end up selling it to a pal they take the commission. it really should be sole agency but if realistically you think that you are unlikely to sell to anyone except via the estate agent then it doesn't make a lot of difference

Part b no time limit whatsoever is unusual you should negotiate that to be six months or whatever. it simply means if you leave them and down the line someone they showed round or introduced decides to buy it then the commission is their's not the new Agent's

Finally it is unclear what marketing costs are incurred I assume it is zero as they have crossed out 800 pounds in any case you want no sale no fee most agents will do that if pushed - if they won't then choose a different agent

When I sold I simply emailed a few agents and said do you do a No Sale No Fee contract - they all said yes

eddddy

km1500 said:

Get rid of the ready-willing and able clause and insist on no sale no fee. The problem with it is if you accept an offer and find a place and everything is going swimmingly and then suddenly the place you are buying falls through then you are committed to selling no matter what as your purchaser will be Ready Willing and Able and you could find yourself 'homeless'. Don't touch it with a barge pole

No - that's completely incorrect. You are not committed to selling your property.

In simple terms, a "ready willing and able" clause means that if the estate agent finds a "ready, willing and able purchaser", and the seller then withdraws from the sale, the seller has to pay the estate agents fee.

GDB2222

You're several steps ahead of most people, as they just sign the contract without reading it. 

I'd ask for clarification of "with an incentivised bonus of 10% bonus commission on any amount achieved in excess of £425,000". Is that 10% of the sale price, or 10% of their 1.5% commission rate?  Was this previously discussed, or was this just slipped in?

There are lots of small points like that which you can sort out by email.

I definitely would not agree the 'ready willing ...' clause, and I'd really seriously wonder whether I would use an estate agent that has it in their terms in the first place.

DullGreyGuy

GDB2222 said:

You're several steps ahead of most people, as they just sign the contract without reading it. 

I'd ask for clarification of "with an incentivised bonus of 10% bonus commission on any amount achieved in excess of £425,000". Is that 10% of the sale price, or 10% of their 1.5% commission rate?  Was this previously discussed, or was this just slipped in?

There are lots of small points like that which you can sort out by email.

I definitely would not agree the 'ready willing ...' clause, and I'd really seriously wonder whether I would use an estate agent that has it in their terms in the first place.

As you've quoted it, neither. If they sold it for £450,000 then as you've worded it it would sound like they'd get an extra £2,500 as 10% of £450,000 - £425,000 

eddddy

The estate agent is a member of the Property Ombudsman Scheme - but there are a few things in the contract that don't comply with the Ombudsman's mandatory code of practice. Plus a few generally dodgy things.





This sounds a bit dodgy. 

In what circumstances do they "Do any additional professional work", which isn't included in their standard estate agency fee?  (Are they trying to charge for some extras which other estate agents would include in their standard fee?)

What does "Assistance with the client's onward purchase" mean? All (good) estate agents should be contacting the estate agents up the chain to progress the sale. They don't charge extra for that.

At the very least, say that they must notify you in writing before doing anything that will incur extra costs.






That definition of "introduction" doesn't correspond with the Ombudsman's definition - specifically the addition of the "indirectly" bit.

I would say that you want to stick with the Ombudsman's definition - to avoid arguments. For example, you move to another estate agent, who sells your house to "Mr Peters" and this estate agent claims that they introduced "Mr Peters", because Mr Peters saw their for sale sign.




 

That doesn't comply with the Ombudsman's Code of Practice - if they say the exclusive period is 10 weeks, you should be able to give 2 weeks notice after 8 weeks.





The agent is being very naughty here.... They are suggesting that the above is from THE ESTATE AGENTS (Provision of information) REGULATIONS 1991.

But they've added a bit that isn't in the regulations, and you should have it removed.

The bit saying "or who received particulars or marketing material of any type from Fox Grant or any subagent" shouldn't be there.

It's not compliant with the Property Ombudsman's Code of Practice, and it's not in the regulations. 

Additionally, the Ombudsman puts a 6 months / 2 year time limit - which should also be in this contract.

km1500

eddddy said:

km1500 said:

Get rid of the ready-willing and able clause and insist on no sale no fee. The problem with it is if you accept an offer and find a place and everything is going swimmingly and then suddenly the place you are buying falls through then you are committed to selling no matter what as your purchaser will be Ready Willing and Able and you could find yourself 'homeless'. Don't touch it with a barge pole

No - that's completely incorrect. You are not committed to selling your property.

In simple terms, a "ready willing and able" clause means that if the estate agent finds a "ready, willing and able purchaser", and the seller then withdraws from the sale, the seller has to pay the estate agents fee.

You are correct obviously in the letter of the contract but what it means is if someone comes around and makes an offer and you accept it having found a place to move to,  then you are committed to sell it no matter what happens

so for example if your purchase Falls through and your buyer says I'm sorry I still want to buy your house you are unable to pull out unless you pay the agents fees

Yes you could say to the purchaser will you wait while I find a place but ultimately if they want to go ahead and say no, then you either pull out and pay the agents feesor sell and pay the agents fees

this is completely different from a no sale no fee contract

DullGreyGuy

km1500 said:

eddddy said:

km1500 said:

Get rid of the ready-willing and able clause and insist on no sale no fee. The problem with it is if you accept an offer and find a place and everything is going swimmingly and then suddenly the place you are buying falls through then you are committed to selling no matter what as your purchaser will be Ready Willing and Able and you could find yourself 'homeless'. Don't touch it with a barge pole

No - that's completely incorrect. You are not committed to selling your property.

In simple terms, a "ready willing and able" clause means that if the estate agent finds a "ready, willing and able purchaser", and the seller then withdraws from the sale, the seller has to pay the estate agents fee.

You are correct obviously in the letter of the contract but what it means is if someone comes around and makes an offer and you accept it having found a place to move to,  then you are committed to sell it no matter what happens

so for example if your purchase Falls through and your buyer says I'm sorry I still want to buy your house you are unable to pull out unless you pay the agents fees

Yes you could say to the purchaser will you wait while I find a place but ultimately if they want to go ahead and say no, then you either pull out and pay the agents feesor sell and pay the agents fees

this is completely different from a no sale no fee contract

You're repeating the same error, you arent committed to sell, you are committed to pay the agency fee for the sale. 

It would be your choice if you pay the fee and dont sell or make the sale and move into temporary accommodation or hope you can drag out the sale long enough to find your permanent home 

A contract where you only pay if it actually sells is clearly preferable for the vendor but leaves the estate agent exposed to people pulling out at the last minute due to change of mind etc meaning a lot of work for nothing. 

RAS

Given the number of items that eddddy has identified that don't comply with the Property Ombudsman Scheme's Code of Practice to which they claim to be signed up for, I think no thanks might be a good response.

If they are happy to document non-compliance in advance, I'd be nervous about their ability to comply with other elements on a day to day basis.

km1500

DullGreyGuy said:

km1500 said:

eddddy said:

km1500 said:

Get rid of the ready-willing and able clause and insist on no sale no fee. The problem with it is if you accept an offer and find a place and everything is going swimmingly and then suddenly the place you are buying falls through then you are committed to selling no matter what as your purchaser will be Ready Willing and Able and you could find yourself 'homeless'. Don't touch it with a barge pole

No - that's completely incorrect. You are not committed to selling your property.

In simple terms, a "ready willing and able" clause means that if the estate agent finds a "ready, willing and able purchaser", and the seller then withdraws from the sale, the seller has to pay the estate agents fee.

You are correct obviously in the letter of the contract but what it means is if someone comes around and makes an offer and you accept it having found a place to move to,  then you are committed to sell it no matter what happens

so for example if your purchase Falls through and your buyer says I'm sorry I still want to buy your house you are unable to pull out unless you pay the agents fees

Yes you could say to the purchaser will you wait while I find a place but ultimately if they want to go ahead and say no, then you either pull out and pay the agents feesor sell and pay the agents fees

this is completely different from a no sale no fee contract

You're repeating the same error, you arent committed to sell, you are committed to pay the agency fee for the sale. 

It would be your choice if you pay the fee and dont sell or make the sale and move into temporary accommodation or hope you can drag out the sale long enough to find your permanent home 

A contract where you only pay if it actually sells is clearly preferable for the vendor but leaves the estate agent exposed to people pulling out at the last minute due to change of mind etc meaning a lot of work for nothing. 

um it might help.if you actually read my post

"ultimately if they want to go ahead and say no, then you either pull out and pay the agents feesor sell and pay the agents fees"

But yes with this clause you have the options you stated

With the traditional no sale no fee contract which has been the staple contract for decades then you don't have this problem

yourlocalcheesemonger

Thanks for all the responses so far, very helpful!