Can my estate agent charge a termination fee?

[notomato]

I signed a contract with my estate agent in December to sell my flat. After 6 months, I've had literally a handful of viewings and no offers. On asking to remove it from the market, he is now charging me £360. It does say this on the contract but, surely, after so long without any offers, this is totally unreasonable?

It’s on the contract you signed so yes you need to pay it. If you take your house off the market with them do you think it’s fair that after advertising your house for 6 months they just don’t get paid? It might only be a handful of viewings but they also taken time to market you house, why shouldn’t they get paid?

So the contract is basically forever, unless either (a) you sell the flat or (b) you pay the exit fee? That’s unusual, often the contracts are for 6 months. If they want a sole agent contract you have to negotiate hard in terms of the commission, and also the term. But I guess that’s not helpful now, so I would suggest you work with the EA to get a better service (if you can’t afford to cut your losses).

What percentage fee are they on?

Have you asked him for feedback, which if his 3 options did you take, it sounds like both agents considered dropping the price. Did you pay the first agent anything? You can't expect him to do it for free, he can't guarantee he can sell it unless it's at the right price, you had very low offers with the first agent so you do need to consider dropping, some people post their properties on here for suggestions on selling.

You agreed to the terms of the contract when you signed it. If you breach that contract he can recover the money through the small claims court.

Honestly £360 is peanuts in the property buying and selling world. Its in the contract you signed and he has done some work so I can't see there's any argument here.

Is there any particular reason why you arent adjusting the price which was one of the options? Do you no longer want to sell?

If it is noted in the contract that you signed, you need to pay it.
Did you speak to them about their poor service during the last 6 months?
It sounds as if you have over priced it by rather a wide margin. It sounds as if you have had the flat on the market for a very long time, a year or so. If you have had one offer in a year or so, that is (or was) the market price, even if you didn't like it.

That’s very strange having such a long tie-in. Generally it’s between 12-20 weeks at the very most and we’ve always negotiated a 12 week tie-in at most, whilst also discussing their commission. However, if you’ve signed the contract agreeing to that, it might be difficult to wiggle out of.

I wouldn't sign a contract like that.

The ones I have had normally you sign for a specific time and if they don't sell within that time then the contract runs out and you can go with someone else. If you want to quit before time is up there is usually a penalty fee to pay.

Of course contracts can vary.

Sometimes they do have fees for taking photos/marketing costs etc.

I can understand that they might sacrifice some commission % for the certainty of income (cancellation fee).

Were they cheap in terms of % commission on sale and marketing fees ?

What is the charge for exactly? When I sold the agent used a professional photography company to do the photos. Cost about £250 I think. It was in the contract that I needed to repay that to the EA if I took off the market.

I wouldn't sign a contract like that.

Neither would I.

But OP did and is therefore legally obliged to meet the terms of that agreement.

OP, did you use a national online estate agent?

They often have v low fees but the amount is fixed and payable whether they sell your property or not.

Most other agents charge 1 to 1.5% of sold price only with the exception of a marketing fee if you end the contract early.

Maybe he knew you wouldn’t drop the price and thought it was unlikely to sell at all. So he needed to cover some of his costs.

They don’t work for free.

If the service charge is too high you will need to drop the asking price. Property is really only worth what someone is willing to pay for it.

IAAL.

This isn’t strictly true.

If it were deemed an unfair contract term, OP wouldn’t be remotely held to it. Of course, you need a judge to determine if it’s unfair…or else case law.

OP, practically, what are they really going to do if you don’t pay? They aren’t filing at small claims…especially not if you say “look, you didn’t uphold your end of the deal, let yourself in etc etc, so I’ll call it even by not paying the money”

I think an estate agent can suggest a client drops the price but can't force them. Most work on commission on sale. They take the risk who is the weaker party buyer or vendor.

OP any backstory re this agent?

I wondered this too? Is it one of those cheap nationwide companies @notomato.

No idea. No professional photos done.

No, proper estate agent. Not Purple Bricks or anything like that.

Just to answer the points about price, estate agent confirmed several times that the price was fine. A similar flat to mine, same number of bedrooms, pretty much the same size and service charge, in the same house has just come on the market for £20k more than mine.

He was recommended by a mortgage broker I went to. Seemed to be good when he looked round, talked about marketing but it very much feels like he just couldn't be bothered in the end. He has houses he's selling that are worth twice the price of my flat. He also took a while to actually get my flat online. All of the annoyances I could've lived with if he'd actually managed to sell but to not only have not sold but to want an exit fee when it very much feels like he can't really be arsed is a bit galling.

I think this is my thought exactly. As I said before, I could just say "OK keep it on then but I won't sell for less than £X, can't do viewings Mondays to Saturdays, etc etc."

If you thought the terms were unfair, why did you sign it? You presumably did read the contract?

But he was clearly wrong about the price because it would have sold long ago if he was correct. I have the impression from your comments about the offers with the previous agent being far too low to even consider that you are resistant to reducing the price to get it sold so you are jointly responsible for the lack of a sale. If you really want to sell, why don't you consider reducing the price by 5-10% to try to get some interest. If you want to quit your contract, you will, unfortunately, need to pay the fee that you agreed to pay.

I had already reduced the price last year. It gets to the point where it's not worth selling. The price was good value compared to other flats in the area.

Oh and no, I didn't pay an exit fee for the previous estate agent.

It's a shame but perhaps it is not worth selling in that case. The market always dictates the price rather than the asking prices of other flats. You might just have to chalk it down to experience and not agree to this kind of contract again.