Any issues with this estate agent contract?

eddddy

GDB2222 said:

I don’t want to pay the agent unless I actually sell the property. So, them finding a buyer is not good enough, and I would never sign a contract that requires me to pay unless at least contracts are exchanged. YMMV. 

Yes - I agree with you.

But some estate agents will argue that if they advertise your property, find a buyer, spend 12 weeks progressing the sale to exchange of contracts...

.. then just before exchange of contacts you say "I've got cold feet, I don't want to sell, I want to stay living where I am"

...then the estate agent feels they should be paid. 

So they put "ready, willing and able purchaser" clauses in their contract.



It would be great to have a discussion on that topic - for example, whether that's reasonable. 

But it's hard to have a sensible discussion when people add comments which are wrong - like "ready, willing and able purchaser" clauses can make you homeless.

GDB2222

Does the ombudsman provide a model contract? I’ve seen some pretty weird clauses in contracts, and a standard contract would be a selling point for agents.

eddddy

GDB2222 said:

Does the ombudsman provide a model contract? I’ve seen some pretty weird clauses in contracts, and a standard contract would be a selling point for agents.

The Ombudsman doesn't provide a model contract, but they list a lot of things which the estate agent must or must not say in their contract / terms of business.

Here are some random examples:




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



Additionally, there is legislation that the Estate Agent must follow. For example, The Estate Agents (Provision of Information) Regulations 1991 specifies definitions of 
“sole selling rights”, “sole agency” and “ready, willing and able purchaser”

 


Link: https://www.legislation.gov.uk/uksi/1991/859/regulation/5/made

Bigphil1474

The RW&A clause is more to protect EA's from rubbish sellers, not to catch out genuine sellers. As above, they can't make you sell your house just because some onward purchase falls through, if you then go on to look for another property. 

km1500

I too would like a discussion on the RWA clause because I think it is a very important topic

You are right that the clause is there to protect EAs from rubbish sellers but it is also there to ensure that they get their ccommissionno matter what - even from genuine sellers.

the clause means that once they have introduced a buyer to you and you have accepted their offer then commission is payable come whatmay

an example would be your onward purchase falls through and your buyers are unwilling to wait while you look for a new place so pull out.

in that case the full commission would be payable to the EA even though the house has not been sold (an alternative of course is you sell the house and look for temporary accommodation such as rented)

YoungBlueEyes

For future readers, this is a good example of the RW&A clause. 

When me and sis were selling the childhood home, we signed a EA contract that had that clause in it. They found us a ready willing and able buyer, but he turned out to be a property developer who wanted to turn our lovely big Edwardian terrace into 2 flats, and decided to wait until right before we exchanged to cut his offer by 50% because that’s what it’d cost him to do the flats. 

We refused that offer but had we also dumped that estate agent and started again with another we’d still have had their fees to pay, because they did technically find us a RW&A buyer. 

These things don’t come down to a difference of opinion, they are about what you signed up to in the contract (presuming those things are legal, as per eddddy’s DullGreyGuy’s and RAS’s previous posts. 

GDB2222

YoungBlueEyes said:

For future readers, this is a good example of the RW&A clause. 

When me and sis were selling the childhood home, we signed a EA contract that had that clause in it. They found us a ready willing and able buyer, but he turned out to be a property developer who wanted to turn our lovely big Edwardian terrace into 2 flats, and decided to wait until right before we exchanged to cut his offer by 50% because that’s what it’d cost him to do the flats. 

We refused that offer but had we also dumped that estate agent and started again with another we’d still have had their fees to pay, because they did technically find us a RW&A buyer. 

These things don’t come down to a difference of opinion, they are about what you signed up to in the contract (presuming those things are legal, as per eddddy’s DullGreyGuy’s and RAS’s previous posts. 

I don't think that's a good example, really. The agent found someone who purported to be a RWA buyer, but he wasn't actually willing to pay the agreed price. 

One major disadvantage of RWA clauses is that they leave room for argument. 

YoungBlueEyes

He had the funds for the full price, proved at the beginning, and was williing to spend them, at the beginning. He just waited ‘til the morning of exchange to decide not to use them all. 

GDB2222

YoungBlueEyes said:

He had the funds for the full price, proved at the beginning, and was williing to spend them, at the beginning. He just waited ‘til the morning of exchange to decide not to use them all. 

He said he was willing, but that was probably a lie all the way through. 

RHemmings

km1500 said:

I too would like a discussion on the RWA clause because I think it is a very important topic

You are right that the clause is there to protect EAs from rubbish sellers but it is also there to ensure that they get their ccommission no matter what - even from genuine sellers.

the clause means that once they have introduced a buyer to you and you have accepted their offer then commission is payable come whatmay

an example would be your onward purchase falls through and your buyers are unwilling to wait while you look for a new place so pull out.

in that case the full commission would be payable to the EA even though the house has not been sold (an alternative of course is you sell the house and look for temporary accommodation such as rented)

(My emphasis)

While I don't like RWA seller clauses, they aren't quite as bad as that. If the buyer pulls out, then the EA doesn't get their commission. 

The system that makes sure that the EA gets their commission no matter what is 'Modern Method of Auction'. Which is much worse in my view. 

The example you give is a case where the RWA clause may kick in. But, it doesn't happen in all cases. E.g. if the buyer is unable to get a mortgage, or simply decides not to continue with the purchase, then they aren't able and/or willing, and the EA will not get their commission.