Advice Needed On Estate Agent Agreement

Bex8084

I entered into an agreement with an estate agent under sole selling rights which stated that fees were due in the following circumstances:

1. we sell to a purchaser introduced by the agent but after the end of the agreement
2. unconditional contracts are exchanged during the agency agreement period to any purchaser, even if they are not found by the agent.
3. unconditional contracts are exchanged after the agency period but to a purchaser introduced by or negotiated with by the agent.

We cancelled our agreement when we found a house to by as if the agent did not find a purchaser during the remaining agreement term (28 days) we were going to part exchange with the developer we are buying from.

The agreement with the agent ended 4 weeks ago and we are now going to part exchange with the developer - contracts are due to be exchanged in a few weeks.

The agent is now trying to get the full fee from us. Are they due it or just trying their luck?

Strapped

Sounds like they're just trying their luck. If the agreement has ended, then only a or c could apply. Unless they are arguing that they introduced/negotiated with the developer that you're buying from, then I can't see they have a leg to stand on. (Are you buying direct from the developer, or is your agent also acting as the selling agent for the developer? This is the only situation in which I'd imagine they may have a case).

jimc_2

Bex8084 wrote: »

I entered into an agreement with an estate agent under sole selling rights

Are you SURE it said 'sole selling rights'? Estate agents would kill to get that clause into their contract nowadays after the Consumers Association branded it as an example of "unfair terms and conditions". It means that if the house sells by whatever means regardless of by whom, they get their fee. They are the ONLY entity allowed to sell your house and more importantly to the agent, to get the fee in full!

Are you sure it was not 'sole agency' which would allow you to sell it privately and with no fee to them (as long as you have 'closed-off' the relationship with the agent properly.)

The trouble is that all of the clauses you quote fit in with a 'sole selling rights' agreement and you may be scr**ed.

Sharp practice? Yes. Illegal? Probably not, since you willingly (if unknowingly) signed it. You could check with your local Trading Standards Office about how this clause is viewed nowadays (but don't hold your breath. It's not so long since an NAEA official publicly said that all agent contracts should have this clause to thwart the rise of private sales.)

Jorgan_2

Did you tell the EA that you were going to part ex if they didn't sell the property before giving them notice? If so then they may have assumed, rightly or wrongly, that you had been speaking to the developer so an introduction had been made, meaning the agent would be entitled to a fee, as per the contract.

Jimc, I'm hearing of more & more agents using sole selling rights over the last 12 months.

jimc_2

Jorgan wrote: »

I'm hearing of more & more agents using sole selling rights over the last 12 months.

Yes they are. Despite the opposition of the Consumers Association it appears so, although WHICH? are still actively lobbying the OFT and others to ban the practice.

The call for a return to Sole Selling Rights was made last August by Paul Smith, the Chief Exec of Spicer Haart where he commented:

"Estate agents with sole agency contracts need to be careful. There’s nothing to stop their vendors from selling privately,”

“You need to consider reverting to sole selling rights and include a clause which prevents the seller from using an Internet Property Retailer at the same time.”

All pretty ironic when you realise that this comment was made in opposition to Tesco setting up TescoPropertyMarket for Private sales - and guess who is now negotiating to buy TescoPropertyMarket (but not for private sales)?

As an Estate Agent yourself, how do you feel about it? It certainly screws punters like the OP.

chickmug

jimc wrote: »

"Estate agents with sole agency contracts need to be careful. There’s nothing to stop their vendors from selling privately,”

“You need to consider reverting to sole selling rights and include a clause which prevents the seller from using an Internet Property Retailer at the same time.”

As an Estate Agent yourself, how do you feel about it? It certainly screws punters like the OP.

As an EA I will only work with Sole Selling Rights as I am absolutely fed up with having to watch out for those who are trying to cut the agent out. Used to happen every now and again but these incidenta have increased very significantly in past year or so.

Jorgan_2

jimc wrote: »

As an Estate Agent yourself, how do you feel about it? It certainly screws punters like the OP.

The company I work for uses sole selling rights agreements, they have done for years and it appears to be the norm in this area. I do however have some discretion over the contract, I have never & would never pursue a fee for a client part exchanging a property.

I make sure I fully explain the terms of the contract and as a result of this explanation, I have had a few sellers tell me that they have friends or family interested in their property. In that situation I will take the details of the interested parties and if they do proceed with the private purchase, no fee is sought. Another option is to delay our marketing until the vendor has spoken to the interested parties and no sale is forthcoming.

One of my clients is a trading standards officer, he decided to use me due to way I explained everything to him & my overall approach when on the initial valuation. I only found out what he did for a living when I went back ten days later to measure up.