Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • NewHomeOwner
    • By NewHomeOwner 9th Apr 18, 5:09 PM
    • 58Posts
    • 61Thanks
    NewHomeOwner
    Estate Agent Contract
    • #1
    • 9th Apr 18, 5:09 PM
    Estate Agent Contract 9th Apr 18 at 5:09 PM
    Hi

    My parents are currently waiting out a 14 day notice period with their estate agent who has sole selling rights and is still actively marketing the property until the end of this period. They will then be out of contract.

    The contract states that the estate agent will be due commission if unconditional contracts are exchanged on the property in this period, even if they find the buyer themselves.

    By exchange of unconditional contracts do they mean what we know as 'exchange' between the seller and buyers solicitor?

    I.e. If they just showed someone (unconnected to the estate agents) round that they'd found themselves and accepted an offer in those 14 days would that be ok as contracts wouldn't actually be exchanged until far later.

    Or do they have to wait the 14 days before they can even show someone else around/accept an offer?
Page 1
    • davidmcn
    • By davidmcn 9th Apr 18, 5:58 PM
    • 7,346 Posts
    • 7,397 Thanks
    davidmcn
    • #2
    • 9th Apr 18, 5:58 PM
    • #2
    • 9th Apr 18, 5:58 PM
    I think "the estate agent will be due commission if unconditional contracts are exchanged on the property in this period" means no more than it says - i.e. it doesn't catch contracts exchanged some time afterwards. So letting someone merely view the property is fine.
    • ThePants999
    • By ThePants999 9th Apr 18, 7:07 PM
    • 1,091 Posts
    • 1,324 Thanks
    ThePants999
    • #3
    • 9th Apr 18, 7:07 PM
    • #3
    • 9th Apr 18, 7:07 PM
    That would be an unusual contract - are you SURE that's what it says? Because if that's all it says, you wouldn't even have to pay commission if they found your buyer, as long as you terminated the contract before exchange!
    • G_M
    • By G_M 9th Apr 18, 7:24 PM
    • 43,805 Posts
    • 51,783 Thanks
    G_M
    • #4
    • 9th Apr 18, 7:24 PM
    • #4
    • 9th Apr 18, 7:24 PM
    That is very unusual wording. Based purely on what yyou have written, yes, it seems you can do whatever you like at present as long as you delay Excange till the 14 days are up.

    (Incidentally, well done for negotiating a mere 14 day notice period).

    But please double check. It is far more likely tht if an introduction takes place during the contract period, which later results in Exchange, then a fee is payable.....
    • eddddy
    • By eddddy 9th Apr 18, 10:03 PM
    • 6,122 Posts
    • 5,924 Thanks
    eddddy
    • #5
    • 9th Apr 18, 10:03 PM
    • #5
    • 9th Apr 18, 10:03 PM
    Hmmm... this reminds me of some especially 'nasty' EA contracts that I've seen (and have have had big arguments about with EAs).

    Look through the contract for a different clause about buyers introduced during the 'sole selling rights' period.


    The contracts I'm thinking of say...

    ...estate agent will be due commission if unconditional contracts are exchanged on the property in this period, even if they find the buyer themselves.
    Originally posted by NewHomeOwner
    Meaning that if a buyer was introduced before the 'sole selling rights' period, the EA wants commission if contracts are then exchanged during the 'sole selling right' period.


    Then another clause says that if a buyer is introduced during the 'sole selling rights' period, the EA wants commission if contracts are then exchanged after the 'sole selling rights' period.


    (This can leave the seller unable to avoid paying 2 lots of commission, in some circumstances.)
    • C_Mababejive
    • By C_Mababejive 9th Apr 18, 10:47 PM
    • 10,415 Posts
    • 9,412 Thanks
    C_Mababejive
    • #6
    • 9th Apr 18, 10:47 PM
    • #6
    • 9th Apr 18, 10:47 PM
    EAs, mostly crooks in smart cars..
    Feudal Britain needs land reform. 70% of the land is "owned" by 1 % of the population and at least 50% is unregistered (inherited by landed gentry). Thats why your slave box costs so much..
    • NewHomeOwner
    • By NewHomeOwner 10th Apr 18, 9:36 AM
    • 58 Posts
    • 61 Thanks
    NewHomeOwner
    • #7
    • 10th Apr 18, 9:36 AM
    • #7
    • 10th Apr 18, 9:36 AM
    Hi

    I've now read my parents contract myself.

    They had a 12 week contract and after that initial period a 14 day notice could be given.

    It's a sole selling rights agreement and under the commission section it says 'the client will be liable to pay remuneration to the agent in the following circumstances:

    1) If unconditional contracts for the property are exchanged in the period during which the agent has sole selling rights, even if the purchaser was not found by the agent.

    2) If unconditional contracts for the property are exchanged after expiry of the sole selling rights to a purchaser who was introduced by the agent during the sole selling period, then the client will be liable to pay commission to the agent if contracts are exchanged within 6 months after expiry.

    My parents are now in the 14 day notice period where the agent has sole selling rights but they don't know whether they can show other people round now/accept offers from people NOT introduced to them by the agent or if they have to wait the remaining 12 days?

    Does it just mean they can't exchange, as in solicitors 'exchange' in this period?
    • eddddy
    • By eddddy 10th Apr 18, 10:03 AM
    • 6,122 Posts
    • 5,924 Thanks
    eddddy
    • #8
    • 10th Apr 18, 10:03 AM
    • #8
    • 10th Apr 18, 10:03 AM
    So that's exactly the type of 'nasty' contract I describe in post #5.

    Hi
    My parents are now in the 14 day notice period where the agent has sole selling rights but they don't know whether they can show other people round now/accept offers from people NOT introduced to them by the agent or if they have to wait the remaining 12 days?
    Originally posted by NewHomeOwner
    No - they should no show people around who were not introduced by the EA. They must wait 12 days.

    Otherwise, they will end up having to pay the EA commission, if the house is bought by one of those people.

    Does it just mean they can't exchange, as in solicitors 'exchange' in this period?
    Originally posted by NewHomeOwner
    If they exchange contracts (as in solicitors exchange) with anyone during the next 12 days, the will also have to pay the EA's commission.

    Re-read post #5.


    Note: This is a nasty contract. If your parents go to another EA, and sign a similar contract - they could end up paying double commission.

    They must make sure that that the next EA's contract does charge commission for a buyer introduced by the current EA. i.e. This clause would be unacceptable in the next EA's contract as it stands:

    1) If unconditional contracts for the property are exchanged in the period during which the agent has sole selling rights, even if the purchaser was not found by the agent.
    Originally posted by NewHomeOwner
    • AnotherJoe
    • By AnotherJoe 10th Apr 18, 10:08 AM
    • 9,032 Posts
    • 9,928 Thanks
    AnotherJoe
    • #9
    • 10th Apr 18, 10:08 AM
    • #9
    • 10th Apr 18, 10:08 AM

    My parents are now in the 14 day notice period where the agent has sole selling rights but they don't know whether they can show other people round now/accept offers from people NOT introduced to them by the agent or if they have to wait the remaining 12 days?
    Originally posted by NewHomeOwner
    I'd wait the 12 days, simply because the original EA may claim that the eventual purchaser discovered the property through an advert of theirs in that period. Unless there was a clear and provable situation eg a friend or relative. But you wouldn't want, for example the chance of someone who saw their for sale board being raised. So I'd take that down as a starter, with photos.
    • dunroving
    • By dunroving 10th Apr 18, 10:25 AM
    • 977 Posts
    • 606 Thanks
    dunroving
    As with others, I'd say don't take the risk. If buyers haven't been found in several weeks, presumably there isn't a horde of buyers waiting to view, so a 12-day delay won't hurt, just to be sure.
    (Nearly) dunroving
    • NewHomeOwner
    • By NewHomeOwner 10th Apr 18, 10:27 AM
    • 58 Posts
    • 61 Thanks
    NewHomeOwner
    Thanks all. Confirms what we thought. It's just not worth it for 12 days!

    I have to admit though, I don't really understand the stuff about it being a 'nasty' contract?

    Surely this clause is fair enough? If my parents eventually did sell to someone who originally viewed through the original estate agent then the original estate agent should get the commission as they did the work? Or am I just misunderstanding/being naive?

    1) If unconditional contracts for the property are exchanged in the period during which the agent has sole selling rights, even if the purchaser was not found by the agent.
    • ashe
    • By ashe 10th Apr 18, 10:45 AM
    • 519 Posts
    • 361 Thanks
    ashe
    Thanks all. Confirms what we thought. It's just not worth it for 12 days!

    I have to admit though, I don't really understand the stuff about it being a 'nasty' contract?

    Surely this clause is fair enough? If my parents eventually did sell to someone who originally viewed through the original estate agent then the original estate agent should get the commission as they did the work? Or am I just misunderstanding/being naive?

    1) If unconditional contracts for the property are exchanged in the period during which the agent has sole selling rights, even if the purchaser was not found by the agent.
    Originally posted by NewHomeOwner
    Cos if they’ve signed with another EA they will have to pay commission to both EAs - it’s not about who gets the commission singular - original EA would want payment in full as would new EA and it doesn’t get split
    • eddddy
    • By eddddy 10th Apr 18, 10:47 AM
    • 6,122 Posts
    • 5,924 Thanks
    eddddy
    I have to admit though, I don't really understand the stuff about it being a 'nasty' contract?
    Originally posted by NewHomeOwner
    I'll try to explain again, with an example.
    • The current EA1 introduces Mr Smith (and shows him your parent's house).
    • The contract with EA1 finishes.
    • Later your parents instruct EA2 (with a min contract period of say 12 weeks)
    • Then Mr Smith comes back and makes an offer, buys and exchanges within those 12 weeks.

    If EA1 and EA2 both used the contracts you describe, your parents would have to pay full commission to both EA1 and to EA2.

    With most other EA contracts, your parents would only have to pay commission to EA1. (EA2 would get nothing.)
    • NewHomeOwner
    • By NewHomeOwner 10th Apr 18, 11:18 AM
    • 58 Posts
    • 61 Thanks
    NewHomeOwner
    I'll try to explain again, with an example.
    • The current EA1 introduces Mr Smith (and shows him your parent's house).
    • The contract with EA1 finishes.
    • Later your parents instruct EA2 (with a min contract period of say 12 weeks)
    • Then Mr Smith comes back and makes an offer, buys and exchanges within those 12 weeks.

    If EA1 and EA2 both used the contracts you describe, your parents would have to pay full commission to both EA1 and to EA2.

    With most other EA contracts, your parents would only have to pay commission to EA1. (EA2 would get nothing.)
    Originally posted by eddddy
    Thanks that explains it really well. So if they sign up with another agent in the future, as long as the new agent doesn't have that same clause they will be ok?

    My parents are pretty overwhelmed having not sold in over 30 years. And apparently despite having sold relatively recently, I'm pretty clueless as well!
    • eddddy
    • By eddddy 10th Apr 18, 12:19 PM
    • 6,122 Posts
    • 5,924 Thanks
    eddddy
    So if they sign up with another agent in the future, as long as the new agent doesn't have that same clause they will be ok?
    Originally posted by NewHomeOwner
    Yes - that's correct.

    For extra safety, they could also ask the old EA for a list of people they've introduced to their property.

    Then they pass that list to the new agent, and tell the new agent that if anyone on the list enquires about the property, they must refer them back to the old agent.
    • steampowered
    • By steampowered 10th Apr 18, 4:11 PM
    • 2,411 Posts
    • 2,332 Thanks
    steampowered
    It would be advisable not to show the new buyer round until after expiry of the 14 days, to reduce the risk of an allegation being made that this person was introduced by the current estate agent.
    • G_M
    • By G_M 10th Apr 18, 8:17 PM
    • 43,805 Posts
    • 51,783 Thanks
    G_M
    I disagree with others. It's not a 'nasty' contract.

    Whilst I'm no fan of estate agents, it seems perfectly fair that if an EA introduces a potential buyer (during their period of contract), who goes on to buy, then the EA deserves their fee. They did their job.

    And if it's a sole selling rights contract that the seller has granted them, the same applies.


    2) If unconditional contracts for the property are exchanged after expiry of the sole selling rights to a purchaser who was introduced by the agent during the sole selling period, then the client will be liable to pay commission to the agent if contracts are exchanged within 6 months after expiry.
    Originally posted by NewHomeOwner
    Perfectly clear.
    • eddddy
    • By eddddy 10th Apr 18, 9:19 PM
    • 6,122 Posts
    • 5,924 Thanks
    eddddy
    I disagree with others. It's not a 'nasty' contract.
    Originally posted by G_M
    Ummm... have you read the whole thread?

    Whilst I'm no fan of estate agents, it seems perfectly fair that if an EA introduces a potential buyer (during their period of contract), who goes on to buy, then the EA deserves their fee. They did their job.
    Originally posted by G_M
    I agree 100%


    And if it's a sole selling rights contract that the seller has granted them, the same applies.
    Originally posted by G_M
    I agree 100%


    Take a look at the example in post #13. That explains why this is a nastier contract than most other EA contracts.
    • G_M
    • By G_M 13th Apr 18, 2:33 PM
    • 43,805 Posts
    • 51,783 Thanks
    G_M
    The scenario you outline in post 13 is fairly common, and is an inevitable consequence of

    * switching agents, each of which you wish to have a sole agency/sole selling rights arrangement with, and

    * the protracted nature of property sales which can and do span those contracts.

    The usual solution, recommended here and elsewhere, and mostly accepted by EAs, is for EA1 to provide a list of potential buyers they have introduced during their period of contract, and for that list to be passed to EA2 who agrees not to invoice if anyone on that list later gores on to buy.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

4,369Posts Today

8,925Users online

Martin's Twitter
  • Just a quick note. I've been overwhelmed by the strength of support by my campaign to stop facebook fake ads today? https://t.co/KexhjVVznY

  • RT @mmhpi: On the eve of tomorrow's #RecoverySpace debate in parliament, we just delivered our 10,000 letters to the Chancellor. People in?

  • Interesting piece yet they asked me if it was a publicity stunt and I said yes partially, in order to raise awarene? https://t.co/FdKcO1uMLx

  • Follow Martin