I have a couple of scenarios regarding estates agents that I would like
clarified if you can.
have signed a contract with an agent for a term of 13 weeks with an
additional 2 weeks notice if I wish to terminate the said contract. Due
to the complexity of the English system I became irritated with the
agent sending so called interested parties who did not even begin by
putting their own house on the market. After 13 weeks I had only
received two offers which were under the asking price and therefore not
accepted. At this point I submitted a letter cancelling the contract
with the agent.On the 14th week I received an offer of the asking price
from someone who didn't at that time have his house on the market and
has yet to sell it. If I leave this agent without accepting the offer,
with the estate agent having fulfilled their objective, am I liable for
If the above estate agent sent a
person to view my property on behalf of some relatives, would I be
liable for the agent's fees if I left them and considered dealing
directly with this potential buyer.
Concerned house seller.
Answer: It always pays to read an agent’s terms and conditions. Indeed
there are some agents who will actually say that if you do not respond
to their terms as sent to you within seven days you are deemed to have
accepted them. Now if I had my way the rules would be very simple, if
an agent sells your house you pay them, if you don’t, you don’t pay.
The Misrepresentation Act 1967 and Estate Agents Act 1991 mean that it
is a requirement of all agents that they clearly state their costs in
writing before instruction. To my mind these can be overly complicated
and any good agent should be able to take a property on without tying
the seller in knots. You should really never agree to more than a 12
week contract and again any good agent, of they’re not doing the job,
should be willing to discuss a change in terms of agency before the end
of the contract. However it is also normal for a seller to sign the
agent’s terms and conditions, and many sellers do not do this in the
mistaken assumption that by not doing so they will not be liable.
Courts have found against sellers using this argument on the basis that
handing an agent a key or allowing them access for viewing constitutes
and instruction to sell. The answer to your first question would seem
obvious in that the sale hasn’t actually happened and therefore you
don’t owe a fee when you stop the contract with the agency. It would be
up to you of course to pay any costs you had agreed to pay, but I think
it is unnecessary for any seller to pay any upfront costs or marketing.
If, however, the buyers then carry on and buy you would then be liable
for a fee as they did introduce the buyer. A reasonable percentage of
deals (perhaps c. 5%) these days are done behind an agents back with a
buyer shown originally through the agency, and if that sits comfortably
then so be it, but agents invest heavily to retain a pool of buyers to
introduce to your property and to cut them out will ultimately mean the
agents have less money to spend keeping that pool topped up. Another
often used term is an “effective introduction”, and this would be
construed as any introduction that ultimately leads to a sale, and your
second question would fall into this category, so you would owe a fee.
But if, say, you had disinstructed the agent, and the buyer had seen
the house again, either privately or through another agent, after three
months and it was at a different price, then the original agent would
have a difficult time proving they were owed a fee.