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notnow

Wait, dont sign that estate agent contract!

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Should you  sign that  contract with an estate agent  as it is?.

 

I am not an expert in contracts, but I think that some  recent experiences with estate agencies going bust may make readers here think about the wording of contracts they may be about to sign.

 

Say you choose  and sign up with Agency A. 

How would you feel if the bill you eventually received was from agency B who are completely unknown to you and who you never had a contract with , and worse, that you had to pay it?

 

This does happen.

 

If agency A goes bust, agency B may walk in and take over the contracts, even after you have exchanged contracts and send you the bill . This is an assignment of contracts. It happens.  

 

Obviously Agency B should have written to you with a full explanation of the contract assignment, for your solicitor to check. But we are dealing with estate agents here.  Some agents  do not think they have to act like a business. They just take  the money with the minimum of work. They may not even respond to solicitors letters.

 

I would only ever sign a  non assignable contract now.

 

This means that insolvency accountants may have a claim on your payment, depending on the timing of the insolvency, but a random estate agency will not.

 

Is this a serious issue?

It has been estimated in the more upmarket press that 20% of estate agencies may go bust this year, so yes, it’s a serious issue. The going rate for selling has been pushed down in many areas to 0.8% or even less, due to competition for sales and the rise of the  cheap fixed fee online sellers.

This low income puts many estate agencies, especially those paying huge fees for franchises - which is most of them - in a precarious financial  position.

I have no connection with any agents, but I have had a bad experience with an insolvent agent. You guessed it - I had to pay an agent I never signed up with.

For those who think I should not have paid, remember that I would have then been chased through the courts.

I just wish my contract had been marked non assignable.

 

I would always avoid using an agent that is a franchise as well, as they have huge fees to pay, and are the first to go bust.

Give me the local independent villain, rather than the franchised chain, or better still - why use an agent at all?.

Edited by notnow

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If you have to pay B that means they have sold your house.

Finger lifted or not.

Thats the outcome you wanted. They cannot change the terms of th contract - commission rate or exclusive period.

Im not sure what your problem is.

In the case of B doing nothing then the exclusivity period will expire.

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Hi spyguy, , thanks for your comment,  I have edited my post  to make it clearer that B did not sell my house.

When you wrote " If you have to pay B that means they have sold your house"  you would expect that . But what if they did not sell your house?.  They just bought the contracts from an insolvent agent, and sent out bills to those who exchanged completely by their own work around the time of the insolvency.

Some people may not mind that. But I did. If I employ A, I expect to pay A, (or their insolvency practitioner), not B. If I get an invoice  from B, I expect an explanation from B, not just a demand to pay up.

The point of my post is to say that if people do not want to be in that position, a good start is to mark any contract as non assignable before signing.

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28 minutes ago, notnow said:

Hi spyguy, , thanks for your comment,  I have edited my post  to make it clearer that B did not sell my house.

When you wrote " If you have to pay B that means they have sold your house"  you would expect that . But what if they did not sell your house?.  They just bought the contracts from an insolvent agent, and sent out bills to those who exchanged completely by their own work around the time of the insolvency.

Some people may not mind that. But I did. If I employ A, I expect to pay A, (or their insolvency practitioner), not B. If I get an invoice  from B, I expect an explanation from B, not just a demand to pay up.

The point of my post is to say that if people do not want to be in that position, a good start is to mark any contract as non assignable before signing.

A contract would need both parties to agree to changes.

AFAIK You cannot rewrite/reassign the contract without rewriting the contract. Or at least do so without resigning the contract.

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5 hours ago, notnow said:

Hi spyguy, , thanks for your comment,  I have edited my post  to make it clearer that B did not sell my house.

When you wrote " If you have to pay B that means they have sold your house"  you would expect that . But what if they did not sell your house?.  They just bought the contracts from an insolvent agent, and sent out bills to those who exchanged completely by their own work around the time of the insolvency.

Some people may not mind that. But I did. If I employ A, I expect to pay A, (or their insolvency practitioner), not B. If I get an invoice  from B, I expect an explanation from B, not just a demand to pay up.

The point of my post is to say that if people do not want to be in that position, a good start is to mark any contract as non assignable before signing.

You are effectively paying A - they've gone bust and the Administrator or Liquidator has (I assume) sold their "work in progress" to B.  So by a bit of a tortuous chain you have funded a payout to A's creditors.

 

At the end of the day you've paid the contracted price for the contracted service (you've sold your house) - I don't see why it's an issue?

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If a company goes bust they do not exist so you cannot pay them anything.

The contract  will say the EA gets paid on completion to a buyer introduced by them within their marketing period.  

If you use a company like Purple brick who charge up front and they go bust them you will have to use someone else.  That is a choice you make. 

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17 hours ago, notnow said:

 

Is this a serious issue?

No

 

17 hours ago, notnow said:

better still - why use an agent at all?.

dont then what is the problem 

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  • 337 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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