Exchange and Completion

20122013

My estate agent insisted their fee is a percentage not a fixed fee. I had explained the fixed fee was converted into a percentage and the figures were listed including a breakdown on the signed TCs.  What are my options? If I pay him the fixed amount, and wait and see what he does? I have also asked for phone recordings, which was the date i have accepted the offer and have their fees re-confirmed by the (ex) agent.

TheJP

20122013 said:

My estate agent insisted their fee is a percentage not a fixed fee. I had explained the fixed fee was converted into a percentage and the figures were listed including a breakdown on the signed TCs.  What are my options? If I pay him the fixed amount, and wait and see what he does? I have also asked for phone recordings, which was the date i have accepted the offer and have their fees re-confirmed by the (ex) agent.

It doesnt matter what an ex EA said its whats in the contract you signed, which is 1.25% of marketing price £xxx,xxx OIEO i.e you pay 1.25% on what they sold the property at. The reference to the amount is an illustration to show you that if it sells for what you are marketing their fee is £xxxx, they got you £16k over that so the 1.25% is worked out on the £xxx,xxx + £16k. Is their fee coming out of funds from a sale? If so your solicitor will pay the amount on which the EA says is owed, if you want to dispute it then you need to raise it before or after the sale completes.

20122013

TheJP said:

It doesnt matter what an ex EA said its whats in the contract you signed, which is 1.25% of marketing price £xxx,xxx OIEO i.e you pay 1.25% on what they sold the property at. The reference to the amount is an illustration to show you that if it sells for what you are marketing their fee is £xxxx, they got you £16k over that so the 1.25% is worked out on the £xxx,xxx + £16k. Is their fee coming out of funds from a sale? If so your solicitor will pay the amount on which the EA says is owed, if you want to dispute it then you need to raise it before or after the sale completes.

I am really disappointed, as they have agreed a fixed fee but explained need to express in percentage term as they cannot change the TC layout. After I have accepted the offer the ex agent had confirmed their fee again aNot much I can do have to pay and dispute later.

EssexHebridean

20122013 said:

TheJP said:

It doesnt matter what an ex EA said its whats in the contract you signed, which is 1.25% of marketing price £xxx,xxx OIEO i.e you pay 1.25% on what they sold the property at. The reference to the amount is an illustration to show you that if it sells for what you are marketing their fee is £xxxx, they got you £16k over that so the 1.25% is worked out on the £xxx,xxx + £16k. Is their fee coming out of funds from a sale? If so your solicitor will pay the amount on which the EA says is owed, if you want to dispute it then you need to raise it before or after the sale completes.

I am really disappointed, as they have agreed a fixed fee but explained need to express in percentage term as they cannot change the TC layout. After I have accepted the offer the ex agent had confirmed their fee again aNot much I can do have to pay and dispute later.

So you have that in writing from them? If so, I would provide them with a copy, and state that it is clear that the fixed fee was what was agreed. 

saajan_12

20122013 said:

TheJP said:

It doesnt matter what an ex EA said its whats in the contract you signed, which is 1.25% of marketing price £xxx,xxx OIEO i.e you pay 1.25% on what they sold the property at. The reference to the amount is an illustration to show you that if it sells for what you are marketing their fee is £xxxx, they got you £16k over that so the 1.25% is worked out on the £xxx,xxx + £16k. Is their fee coming out of funds from a sale? If so your solicitor will pay the amount on which the EA says is owed, if you want to dispute it then you need to raise it before or after the sale completes.

I am really disappointed, as they have agreed a fixed fee but explained need to express in percentage term as they cannot change the TC layout. After I have accepted the offer the ex agent had confirmed their fee again aNot much I can do have to pay and dispute later.

I wouldn't rely on any ability to dispute later.. The contract is pretty clear that its a % and the amount given is just an example not a fixed amount. A % based commission is standard for high street agents. Add to that you paying per the contract, and you won't have a leg to stand on. 

Do you have any proof of the fixed fee eg recording, email. ?

20122013

Thanks for all the replies

a quick update: the agent has come back (discreetly not acknowledging their error) to confirm that their fee is fixed ..ie the original agreed price . 

saajan_12

20122013 said:

Thanks for all the replies

a quick update: the agent has come back (discreetly not acknowledging their error) to confirm that their fee is fixed ..ie the original agreed price . 

Great news, and a lucky break this time if the agent stood by what they said verbally.
A reminder at least to make sure any written contracts do reflect what has been agreed next time, as you might not be so lucky next time.  

20122013

Due to Complete today and my solicitor's fees breakdown:

'Ourfee                                               £750.00
Bank charge fee                                (£35.00x2)£70.00
VAT Thereon                                      £164.00

Does VAT applies Bank Charges?

MyRealNameToo

20122013 said:

Due to Complete today and my solicitor's fees breakdown:

'Ourfee                                               £750.00
Bank charge fee                                (£35.00x2)£70.00
VAT Thereon                                      £164.00

Does VAT applies Bank Charges?

No and yes

Financial services are generally exempt from VAT, though some are subject to different taxes instead (eg insurance has IPT). However your solicitors arent a bank and arent providing banking services to you. 

For example if my client requires me to go to Edinburgh for the day my charges to them would be my day rate plus the cost of the rail ticket both of which would be subject to VAT at 20% even though public transport is 0% VAT. Thats because I am selling them the service of me traveling by train I am not selling them a train ticket. 

There is a potential exemption to this which is where the intermediary is acting as your proxy and the service is in your name at which point it becomes a straight pass through and not subject to VAT

Unfortunately Shuttleworth and Co v Commissioners of Customs and Excise has already opined on the matter  and deemed it a core part of the service of a conveyancer and not a disbursement and so is subject to VAT

mta999

"Why are you exchanging and completing on the same day? Unless there is damned good reason to I'd be putting a gap between the two. "

Exchanging and completing on the same day avoids the (albiet small but definitely possible) risk that you exchange and then your buyer cannot proceed and you are still committed to your purchase.