estate agency commission problems

In message , Alasdair writes

Firstly, you presumably happily signed the contracts when you appointed each agent, and must have felt that there was a value in agreeing to the various terms - or did you not read what you were signing on several occasions? And you are now having second thoughts because of the potential cost of covering more bases.

Secondly, there is probably no definitive answer as each case will be different. It would seem that there is definitely a possibility that each agent who has had discussions with the ultimate buyer may have a claim, and they may choose to take action if you do not pay up. This would leave you in the hands of a judge, along with the hassle of defending a claim.

If it were me, I would not use multiple agents in the first place, unless each agent earned an equal share of the full commission, whoever introduced the ultimate buyer - this may not be ideal, but it solves your problem.

In your case, I would probably withdraw the property from all agents, and ask each to supply a list of all people they had "had discussions with".

This would draw a line under the problem, and you would be fully aware that if you ultimately sell to someone who has had multiple discussions, you may be liable to multiple fees.

I would then consider appointing only one of the agents on a sole agency basis, or all of them on an equal fee split. I would also be prepared to pay more than the normal sole agency fee, for the combined services of all the agents - no such thing as a free lunch?

It all depends on the contracts you have agreed.

"Richard Faulkner" wrote

How does that give the agents an incentive to actually sell the property?

I mean, what's to stop (at least some of) them thinking "I'll just sit back and wait for one of the other agents to sell the property, and pocket part of the total fee for doing nothing!" ??

No, you need to structure the fees so that each agent *wants* to be the one to clinch the deal - thus getting all agents to "fight" for the vendor, and thus hopefully get a much quicker sale.

Most agents have a 2 tier fee system... sole agency and general agency. If you appointed them sole agency, its usually much cheaper, but on the basis that as sole agent, you'll pay them if you sell will the time period of contract... usually 12 weeks... regardless of who actually sells it.

General Agency is more expensive but you would be expected to pay the agent that introduced to buyer to you home, ie booked the viewing. You'd only pay one.

HTH Rich

As it is usual for MA fees to be more expensive that SA fees I would think that it is reasonable for the OP, or anyone for that matter, to assume (without resorting to having to deciphering the legalese) that this possibility was covered somehow and that he only had to pay one fee and that the way it was split would be sorted out by his solicitor.

It seems very unreasonable for the house-seller to have to go to extreme lengths to avoid two fees when he has openly agreed to multiple terms, just because two agents both send his house details to the same person. The system of Multiple agents would not work if he did

tim

Sorry, I can tell you that their contracts all state that I will be liable to pay them a commission if I sell the house to someone they have had discussions with. - I could quote the exact wording, but if the devil is so much in the detail then I'd want to get some professional (paid for) advice. The reason I thought there might be a "stock" answer is because the wording of all the contracts seems to be based on the 1991? standard texts, so I thought there was a chance that I would not be the first person to have considered this issue.

Thanks for your reply

Alasdair

I read it, and also asked some of the agents to clarify exactly what it meant. You might have missed that part of my original posting: "am a liable to pay them all, only the one who 'closes' the deal, or only the one who first introduced the buyer to the house? - I have had all three answers so far!"

i.e. the agents don't seem to know what they are talking about. It seems that their skills lie more in talking with confidence about things they don't understand. - which I guess makes them good at selling my house so I'm happy in that respect.

I'm not so worried right now, its not like I have sold the house am now considering the issue. I just want to understand where I stand before I go on. Frankly, if it is the case that an unlimited number of agents can each get their 3% or so just for calling up a buyer and mentioning the property, then estate agents deserve the rather poor personal reputation they have.

- I know that such extortionate contracts are not tolerated in most industries (insurance, personal finance), but maybe they are better regulated.

That’s the thing. Is each case different? The text in the contracts all (with one exception) seem to be based on the same standard words. - can anyone tell me if there is any standard guidance on this? Is there an 'estate agency guild' or some such, as there is with most other service industries?

I'd have to disagree with you there. There are a lot of bad estate agents out there who take a lot of money for doing very little, not all of them by any means but there are some. Using a 'winner takes is all' approach is a grate motivator to get a sale and is as far as I can tell the best way to get offers quickly, and to guard against the under performing agents. If you go sole, and you get some crap old duffer then it can really hurt your sale.

My question is about the practicalities of the issue. I'm sure I am not the only person in the country to have used multiple agents, so I'm hoping that someone else who has done this can post with their experiences.

Unless you are estate agent offering a multiple agency contract it seems.

Thanks for your reply. Any other input most gratefully received.

Thanks

Alasdair

In message , Tim writes

As I said, not ideal, but the alternative leaves the OP with his problem.

In court it is generally assumed that a judge will "award" the fee to the agent who caused the introduction which led to the sale and exchange of contracts.

However, nobody can read a judges mind, and there is always the chance that you pay the wrong agent, and another is successful in court.

There is every chance that a viewer can collect the details and lots of info from one agent, view the property by another, and make the offer to another - who gets the fee? - There will probably be 3 answers to this question

I suppose I am saying that you cant really have your cake and eat it.

In message , tim writes

Is it?? Not where I am - various agents offer to sell on a winner takes all basis at the normal fee - it is that competitive.

What makes you think that? If each agent thinks they are entitled and sues, the OP has to defend, and risk losing. It needs to be sorted contractually in advance.

Does it work?

In message , Rich writes

The contracts state "had discussions with", not "booked the viewing".

I dont want to be pedantic, but if this isnt sorted at the beginning, when people are anxious to get multiple agents on board, and will probably sign anything without much concern, it can end in tears.

Assumptions dont necessarily work in contract law.

In message , Alasdair writes

Alasdair,

you seem to dismiss my input out of hand, and probably because it was not what you want to hear. I read your post carefully, and took some time to answer.

In the past, I have been faxed estate agency contracts by posters here and I believe that my responses where helpful.

What you may not know is that I was an estate agent for 17 years until I sold my business in April, and probably have more experience of what you are asking than most.

You are probably right in saying that agents dont understand their contracts, and the fact is that there are all 3 answers to your question, depending on the circumstances of the way the sale comes about, not the wording of the contracts.

So there is no stock answer to your question and, as I said, if one or more agents feel that they are entitled to the fee, and are prepared to sue on the contract, you will have to defend the action/s, and may lose.

Much better to get it sorted in advance, now that you are aware of the potential problem.

Perhaps you could propose the precise circumstance in which one agent only is due the fee, create a revised clause for the various contracts, and proceed with those who will agree it.

Multiple Agency in England is a very loose concept, unlike the way it seems to work in the US.

Why not ask your solicitor who will give the answer as far as the law sees it. Replies on NG's can only be mostly lay peoples opinions. OK some professionals but some of these often do not understand what they mean.

Phil

Three: -

Sole selling rights Sole agent Multiple agents

Phil

Out of interest, have you ever sued for your fee when another agent eventually handled the transaction?

In message , stuart noble pay

Yes. And won.

However, my agreement at the time stated that "Any Sale" agreed within 6 months would lead to my earning the fee.

I didnt use this term for long as it actually discouraged people from putting their property on the market with us.

Now- dont get me wrong - I only sued because the vendor was the most obnoxious person who had me jumping through hoops for no reason, and actually instructed another agent without my knowledge after only a week on the market. In addition, we had actually called and arranged a viewing for the person who eventually bought the house.

It probably cost me more in time to sue than I got, but it was a matter of principle with this particular person.

(Waits for flames )