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  • FIRST POST
    • GDB2222
    • By GDB2222 7th May 18, 7:06 PM
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    GDB2222
    Estate agent's contract
    • #1
    • 7th May 18, 7:06 PM
    Estate agent's contract 7th May 18 at 7:06 PM
    My BIL is asking for advice on the draft contract he has received from his estate agent. I haven't sold a house in the last 25 years, so I'm very rusty. Any tips what to look for in the contract, and what to change?

    I am worried about a few points:

    1. Commission becomes payable following exchange, even if the purchase does not complete.

    2. There is a very, very wide definition of what they mean by introducing a purchaser. For example, if a person became aware that a property is for sale through noticing a for sale board, the agent wants his commission even if the sale takes place months or years later.
    No reliance should be placed on the above! Absolutely none, do you hear?
Page 1
    • Thrugelmir
    • By Thrugelmir 7th May 18, 7:33 PM
    • 59,226 Posts
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    Thrugelmir
    • #2
    • 7th May 18, 7:33 PM
    • #2
    • 7th May 18, 7:33 PM
    What's your particular concern with these 2 points.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • diggingdude
    • By diggingdude 7th May 18, 7:33 PM
    • 324 Posts
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    diggingdude
    • #3
    • 7th May 18, 7:33 PM
    • #3
    • 7th May 18, 7:33 PM
    1) I personally would argue that one before signing and correct it to say if seller pulls out they get it not buyer.

    2) Guess they would have to prove it

    Then what do I know? I just like a good row
    House Deposit - Target 20000 April 2019
    Current Savings - 10225 13121.22 14621.22 16021
    • eddddy
    • By eddddy 7th May 18, 7:55 PM
    • 6,608 Posts
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    eddddy
    • #4
    • 7th May 18, 7:55 PM
    • #4
    • 7th May 18, 7:55 PM
    1. Commission becomes payable following exchange, even if the purchase does not complete.
    Originally posted by GDB2222
    It's very, very rare that contracts are exchanged, but the sale doesn't complete (and the seller could potentially sue the buyer for the EA's fee, if it did happen).

    But you can ask the EA to change the contract to say fees are only due on completion.

    2. There is a very, very wide definition of what they mean by introducing a purchaser. For example, if a person became aware that a property is for sale through noticing a for sale board, the agent wants his commission even if the sale takes place months or years later.
    Originally posted by GDB2222
    Can you give a realistic example of your concern here?

    e.g. Are you thinking somebody might knock on your BiLs door and say "I want to buy your house without dealing with your EA."

    FWIW, following a Court of Appeal ruling, that contract clause probably wouldn't stand up in court.
    See: https://www.telegraph.co.uk/news/newstopics/lawreports/1935750/FOXTONS-LTD-v-BICKNELL-and-ANR.html


    I'd guess it might be a very 'gentle' EA contract, if those 2 things are the biggest concerns.
    Last edited by eddddy; 07-05-2018 at 7:58 PM.
    • G_M
    • By G_M 7th May 18, 8:56 PM
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    G_M
    • #5
    • 7th May 18, 8:56 PM
    • #5
    • 7th May 18, 8:56 PM
    ..... Any tips what to look for in the contract, and what to change?
    a) the fee. Negotiate down (whether a fixed fee or %).
    b) don't agree to a 'sole selling' contract (ie if you find a buyer you don't want to still pay a fee)
    c) if sole agency, negotiate down the minimum contract term. 12 weeks max. 8 is better. 6 is ideal. You can always extend if happy, but you can't escape early if unhappy!

    I am worried about a few points:

    1. Commission becomes payable following exchange, even if the purchase does not complete.
    Cross out the word 'Exchange' and write in 'Completion', on both copies. Get the agent to initial the change on the copy you keep.

    2. There is a very, very wide definition of what they mean by introducing a purchaser. For example, if a person became aware that a property is for sale through noticing a for sale board, the agent wants his commission even if the sale takes place months or years later.
    Originally posted by GDB2222
    2) above is a standard term, and fair, though I believe the courts have ruled there is a time limit. Can't remember offhand what it is.
    • GDB2222
    • By GDB2222 10th May 18, 2:54 PM
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    GDB2222
    • #6
    • 10th May 18, 2:54 PM
    • #6
    • 10th May 18, 2:54 PM
    Thanks for all the input. I thought folks would like to know the upshot of this. The EA's contract is quite complex and convoluted, and we agreed the following addition.

    The parties agree that the following additional terms will override all other terms of the contract. If there is any conflict, these overriding terms will prevail.

    The agent will not be entitled to commission unless the buyer is introduced by the agent, has attended a viewing of the property arranged by the agent, and has completed a purchase of the property as a direct result of that introduction during this contract or within four months of it ending.

    Upon termination of this contract, the agent will provide the names of all those introduced by the agent and who attended a viewing of the property arranged by the agent, subject to consent under GDPR.

    In the event of a claim for commission by more than one agent, the seller will not be liable for more than one agency commission in total.

    The current occupants of the property, X&Y, have expressed interest in buying the property. No commission will be payable in respect of them.
    No reliance should be placed on the above! Absolutely none, do you hear?
    • G_M
    • By G_M 10th May 18, 7:13 PM
    • 44,730 Posts
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    G_M
    • #7
    • 10th May 18, 7:13 PM
    • #7
    • 10th May 18, 7:13 PM
    Well done. Just shows what you can do if you ask.

    Sadly many people believe that contracts are somehow 'inviolate' - "take it or leave it".
    • csgohan4
    • By csgohan4 10th May 18, 7:40 PM
    • 4,638 Posts
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    csgohan4
    • #8
    • 10th May 18, 7:40 PM
    • #8
    • 10th May 18, 7:40 PM
    Well done. Just shows what you can do if you ask.

    Sadly many people believe that contracts are somehow 'inviolate' - "take it or leave it".
    Originally posted by G_M
    Or they don't read the contracts and sign and complain on here afterwards when things go wrong
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
    • GDB2222
    • By GDB2222 10th May 18, 9:06 PM
    • 14,509 Posts
    • 78,452 Thanks
    GDB2222
    • #9
    • 10th May 18, 9:06 PM
    • #9
    • 10th May 18, 9:06 PM
    This is a local agent, and I'm dealing with the owner. We are not out to stitch him up, just avoid ambiguities or being in the middle of a fight between two agents.
    No reliance should be placed on the above! Absolutely none, do you hear?
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