Estate agent unwilling to renegotiate commission

[Kaylady]

Hi everyone,

I’m after some advice/opinions so would appreciate some insight. Sorry it’s a long one!

We listed our house under an independent estate agent under a sole agency contract at 1.25%+VAT commission.

We have had the sale of our house fall through 4 times and have generally been unhappy with the estate agent and parted ways just before Christmas.

We settled our invoice for photography costs in January and have been merrily on our way engaging with new estate agents with a view to appoint someone new in April (after we have addressed some issues that came up on a previous buyers survey).

I then received a call out of the blue last week from the EA to advise me that buyer number 3 wants to know if the house is for sale as they had just had an offer accepted on their property with a first time buyer.

I informed them that our house was off the market and if we are looking to relist, it would be at the original price point we initially listed at (we had to reduce the house price by 25k so the house wasn’t buried in the listings again).

I advised them that the chain was too unstable at this point to entertain anything so for them to contact us again when their buyer had their mortgage offer. I reiterated that the house was off the market and we weren’t looking to list anytime soon so we’re not showing it to anyone else.

Immediately the pressure tactics were applied ‘they will look elsewhere’ ‘you’ll spook the buyer’ etc and I stopped engaging with them.

I then receive 2 emails, one to say they are formally offering on the house and the second to follow up that they are engaging with ‘our buyers’ estate agents to get information required!

I emailed and pointed out that while I was grateful they were liaising with the EA, we don’t have an active contract and therefore we haven’t appointed them to work on our behalf.

I asked if they would be willing to renegotiate their commission based on the current market and to something that was more competitive (1%+VAT) and we would reappoint them and requested a new contract to be issued.

I received an email stating that their clause in their original contract stating if they introduce a buyer to us, we’d be liable to pay them if it went through another estate agent we appointed. I understand this, but they are unwilling to entertain a lower commission.

I then received an email from my solicitor saying they had been advised we were going ahead with the sale and they wanted to double check that was the case! Pardon me?!

I stated I was not willing to go ahead with this buyer unless they reduced the fee and they said, too bad, they can’t go ahead for less than 1.25%+ VAT.

For additional context, the marketing was superb but the premium service we were sold at the time of appointing didn’t come to fruition. The first thing that irked me was when buyer 1 visited the house to look around when we were home then pulled their offer later that day. The owner of the company called to tell us he pulled out and asked US what we said to him that would make him pull out of the sale!! The cheek! We have also felt like they were negotiating with US to lower our price and what we should accept because the market was bad, vs pushing back on the buyers demands (replace all double glazing which is 10 years old so hasn’t reach end of life yet and to line flues for chimneys not in use etc!)

The 4th and final ‘buyer’ lowballed us after their survey and we had to instruct a structural engineer to counteract their surveyors structural claims. Our EA was chasing US on the status of the report, and didn’t even think to chase the buyers on the status of their mortgage application (spoiler, they hadn’t applied for one after 3 months of putting in their offer and nothing structurally wrong with the house!)

It’s been a long running calamity and I was relieved to not have to deal with them.

Am I the one being unreasonable in asking them to review their commission based on the previous service?!

I’d appreciate your views!

I wouldn't deal with this EA at all, they did not seem to be working for you at all, and are still not listening to you. Do you really want to keep engaging with this company?

Honestly, I’d work out how much that 0.25% is on the cost of your house and then decided if losing the sale is worth the hassle compared to the cost.

So for a £500k house, you’d be paying £6,350 instead of £5,000. If you went to sell, are happy with the price, and the buyers are proceedable, it may not be worth cutting of your nose for a relatively small amount of money.

Depends how much you want to sell. The EA would have annoyed me by not listening when being told the house is no longer on the market and for them to keep pushing it would actually push me away from them. I’d stay in the house and put it back on when you’re ready and wait for another buyer using a different EA.

Your request is not unreasonable, but I suspect the EA is correct about the clause in their contract.

Personally, I’d be so incensed that the EA has pushed ahead despite you saying no and CONTACTING YOUR SOLICITOR that I would refuse to consider this buyer at all.

But, if you want the sale hold firm and refuse to allow them to go any further until they agree in writing that they will reduce their fee. They clearly want the sale, so call their bluff.

From memory, they do tend to have clauses in their contracts that mean that you do have to pay them the original fee you agreed, even if you then take it off the market with them, and put it on with a second estate agent, If it is the first EA that introduced you to buyer 3, then you may end up having to pay the original fee to EA1, plus whatever fee to EA2 if they progress the sale for you. So their original contract would likely cover the eventuality of buyer 3 purchasing off you, regardless of who the current EA is. So there is no need for a new contract, from the EA’s point of view, so I doubt they would renegotiate. Be careful, if you sign up to a new estate agent, but sell it to buyer 3, you may have to pay both estate agents their fees (so over 2 per cent in total).

Thanks for the response. It is honestly anxiety inducing and I’ve told our solicitor they are not instructed and the reason why. We were feeling good about moving ahead with a potential new agent and this has just thrown a spanner in the works! Better to cut ties completely!

I think you are mad concentrating on a quarter percent.

Do you want to sell, or not, and at what price? Make them earn their full commission by getting a good offer price to enable you to move or tell them to swing it, you are staying put.

Hi and thanks for the response. We originally had an offer 10k over asking and then once that sale fell through, were saying that 45k under was a good offer based on the current market (The house was listed at offers over £350k and buyer number two offered £305k). I was having to go back and prompt them to negotiate a higher price as we’d just dropped the house to £325k so it wasn’t buried in the listings again. My experience is negotiating with them to chase a better offer for our house vs securing a low offer to facilitate the sale. They also didn’t adequately vet the buyers so we were instructing solicitors on their advice to not ‘spook them’ when the offers weren’t actually real based on the person’s finances.

It may only be £1000 or so difference but when you also add VAT it soon adds up and the current commission and unfair contract doesn’t incentivise them to do better by us.

Hi and thanks for the response. You are correct unfortunately, I asked them to review the commission otherwise we wouldn’t be going ahead with her as a buyer at all and they refused. It says it all really!

Thing is you signed a contract, now you’re breaching it. You need to speak to your solicitor. As they can take you to court and recoup both the fee and the costs if it looks yoh won’t sell to thus buyer for a quarter of a percent,

Hi and thanks for the response.
Our experience is that they haven’t negotiated the best price for us, they have negotiated us down just to get the sale through so they get paid.

I’ve spoken to multiple agents who think our house is worth more than the offer their buyer has come in with, so it’s more around taking a gamble on a new agent and gaining >10k more vs having to pay them an extra 1000 or so to facilitate the sale at this price and their crap service. I’ve told our solicitors we’re not going ahead as I don’t have the energy to deal with them any more!!

Hi and thanks for the response.

We’d only be in breach if we sold to their buyer via another agency which we are not going to do.

You need to send a firm email back saying you have not accepted the offer from the buyer at any point and you are not happy with any of this. You need to be very clear about all of this in writing because they sound like they are doing what they can to make sure you pay for something. I think EAs are bit making any money in this market and are literally clawing what they can get.

If this continues, tell them you are making a formal complaint. Go through their formal complaint process and if they still continue, tell them you will be taking the complaint further with their redress scheme.

I also think these contracts with EAs are ridiculous. This idea that if they haven’t sold your house but because there was a viewing with a potential buyer a year ago, it means they introduced them blah blah blah. I’m not a seller but I have no idea why any of you sellers out up with these shitty contracts and EAs. Honestly, they are some of the worst people trying to claw money wherever they can.

Arguably the EA has already breached the contract by acting for the buyers rather than the OP who is paying them.

If you want to deal with them and they won’t budge on the commission, tell them you can’t accept the offer unless it’s higher and will cover the cost - make them work for it a bit harder.

they sound awful! and they will act as a middle man while the sale is progressing. if you don't trust them and don't want to work with them then say, don't make it about 0.5%

read your contract and be clear what you agreed. there is normally a term period which they can claim introduction commission, its not indefinitely.

I'd move on with a new agent. Seems like not a good match all round. Onwards and upwards.

If you've had multiple viewings, stick with your plan. Someone will want it at Easter.
Ditch these EA in writing and sell to someone fresh.

You don’t have to accept the buyers offer.

But if you do accept the offer then you have to pay the EA the commission you agreed at the outset. It’s true what they say - you do pay the EA who introduced the buyer to you. You are cutting off your nose to spite your face if you lose this buyer through reluctance to pay the EA commission. It’s almost irrelevant that they were useless - they introduced you to the buyer.

Mind you, I would be asking for the photography costs to be removed from your final bill as surely they were part of the 1.25% commission package?

I have always believed in the old adage that something is only worth what somebody is willing to pay for it.

You are overthinking this in the extreme. It is a simple yes or no. Make up your mind what your absolute minimum takes home figure is and go with that.

What is the offer? What were you on the market for? what did you reduce to? Do you want to move?

If you want to move and the offer is acceptable - then don’t cut your nose off to spite your face.

Liasing with your solicitor. Do you mean they issued a memorandum of sale to all parties?

Your gut is clearly telling you to stay away from them. Speak to your solicitor and get advice on this.

I think given they’ve shown that they are pushy, mercenary and dishonest, personally I wouldn’t want to go forward with them if there was an option not to. Expressly going against your wishes and contacting your solicitor is grounds enough for a formal complaint I think.

@Kaylady if you cut ties with the EA, you need to formally request a list of the interested buyers they had on your specific house and a list of the viewers. You then need to pass this list onto any new EA to avoid the double commission whammy moving forward.