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sealaw2000

Action Against Estate Agent

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I know you'll hate me for this but I found a house that I wanted to buy last week. I'm an FTB. It was on at £425k. I called EA to say I wanted to offer asking price, but on condition that seller paid or rebated to me 8% of price (ie 5% deposit + stamp duty). My aim is to keep liquid capital rather than tie it up in an asset that will probably drop in value.

The EA didn't pass my offer on, and someone else got the house. A) doesn't the EA have a duty to the seller to act in the seller's best interests (and therefore wouldn't this duty have been breached by failing to tell seller that there was antoher interested party, and hence a potential bidding war); and B) aren't EA's obliged to pass on all offers (and if so, what can I do if an offer hasn't been passed on)?

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I believe EAs are supposed to pass on all offers. I wouldn't trust them to though. If I were making an offer on a property I'd make it in writing and hand deliver it to the vendor and include in it an offer to cut the EA out of the transaction completely so myself and the vendor could share the saving made on the EA's commission.

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I know you'll hate me for this but I found a house that I wanted to buy last week. I'm an FTB. It was on at £425k. I called EA to say I wanted to offer asking price, but on condition that seller paid or rebated to me 8% of price (ie 5% deposit + stamp duty). My aim is to keep liquid capital rather than tie it up in an asset that will probably drop in value.

The EA didn't pass my offer on, and someone else got the house. A) doesn't the EA have a duty to the seller to act in the seller's best interests (and therefore wouldn't this duty have been breached by failing to tell seller that there was antoher interested party, and hence a potential bidding war); and B) aren't EA's obliged to pass on all offers (and if so, what can I do if an offer hasn't been passed on)?

Did we not 'out' you before? FTB - £425k. :unsure:

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I believe EAs are supposed to pass on all offers. I wouldn't trust them to though.

Why on earth would they not pass on an offer?

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I believe EAs are supposed to pass on all offers. I wouldn't trust them to though. If I were making an offer on a property I'd make it in writing and hand deliver it to the vendor and include in it an offer to cut the EA out of the transaction completely so myself and the vendor could share the saving made on the EA's commission.

It doesn't work like that. The agent has a written, signed agreement with the vendor precisely to prevent people doing what you describe. If a seller tried to cut the agent out by dealing directly with a buyer which the agent had found for them, the agent would sue.

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aren't EA's obliged to pass on all offers (and if so, what can I do if an offer hasn't been passed on)?

Quit bleating about offers not being passed on. If you read the boards you'd know agents and sellers are allowed to have private agreements about acceptable offers, setting whatever conditions they see fit about whether to pass an offer along or not. There's nothing down in law to protect you.

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It doesn't work like that. The agent has a written, signed agreement with the vendor precisely to prevent people doing what you describe. If a seller tried to cut the agent out by dealing directly with a buyer which the agent had found for them, the agent would sue.

Vendors regularly change EAs and the first EA doesn't sue the vendor or the second EA if a sale goes through with the new EA, do they? So what's to stop the vendor withdrawing their property from the market and then selling it privately to someone who first became aware of it while it was still on with the EA? As long as you approach the vendor directly to view the property then the EA doesn't have to know that the buyer was aware of the property while it was still on with that EA and frankly it's none of their business.

Why on earth would they not pass on an offer?

Because the lower the selling price the lower the EA's commission, so they aren't interested in low offers. Remember, EAs are only in it to screw money out of people.

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As long as you approach the vendor directly to view the property then the EA doesn't have to know that the buyer was aware of the property while it was still on with that EA and frankly it's none of their business.

If i understand you correctly, if an EA introduces a property to a potential buyer then the buyer proceeds to buy the property from the seller without involving the EA it's none of EA's business??

As a previous poster has pointed out EA's have a contract in place to prevent this from happening.

Yes EA's would get a lower commission the lower the price but a sale at a lower figure is better than no sale at all where no commission would be earned!!

How does the original poster know for certain that their original offer was not passed on? They say they offered the asking price, when really they were only offering £391,000 on an asking of £425,000 and it's entirely possible the seller turned the offer down...

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I know you'll hate me for this but I found a house that I wanted to buy last week. I'm an FTB. It was on at £425k. I called EA to say I wanted to offer asking price, but on condition that seller paid or rebated to me 8% of price (ie 5% deposit + stamp duty). My aim is to keep liquid capital rather than tie it up in an asset that will probably drop in value.

The EA didn't pass my offer on, and someone else got the house. A) doesn't the EA have a duty to the seller to act in the seller's best interests (and therefore wouldn't this duty have been breached by failing to tell seller that there was antoher interested party, and hence a potential bidding war); and B) aren't EA's obliged to pass on all offers (and if so, what can I do if an offer hasn't been passed on)?

EAs are supposed to pass on all offers. However if the vendor had stated that they would not accept below 95% of asking for example then the EA does not have to pass on offers if they are below. This is just an example but I believe there are some reasons why an EA might not have to pass on an offer.

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I know you'll hate me for this but I found a house that I wanted to buy last week. I'm an FTB. It was on at £425k. I called EA to say I wanted to offer asking price, but on condition that seller paid or rebated to me 8% of price (ie 5% deposit + stamp duty). My aim is to keep liquid capital rather than tie it up in an asset that will probably drop in value.

The EA didn't pass my offer on, and someone else got the house. A) doesn't the EA have a duty to the seller to act in the seller's best interests (and therefore wouldn't this duty have been breached by failing to tell seller that there was antoher interested party, and hence a potential bidding war); and B) aren't EA's obliged to pass on all offers (and if so, what can I do if an offer hasn't been passed on)?

For what it's worth, this is from a BBC website:

Is the Estate Agent obliged to pass on my offer?

When an offer is made for a property, the estate agent must pass it to the seller promptly and in writing, except those which the seller has told the estate agent not to be passed on, for example, all those below a certain price.

The estate agent does not have to give you details of other offers they have received.

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I'm an FTB. It was on at £425k.

As an FTB with a £425K property affordable to you, I would really like to know what it is you do for a living.

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If i understand you correctly, if an EA introduces a property to a potential buyer then the buyer proceeds to buy the property from the seller without involving the EA it's none of EA's business??

As a previous poster has pointed out EA's have a contract in place to prevent this from happening.

Okay. Let me try to explain again.

Suppose Mr Vendor puts his house on the market with Halifax. He gets no interest and sacks Halifax and puts in on with Rentons. The house sells but Halifax have no claim to any of the proceeds. It may well be that someone who viewed the house when it was on with Halifax, and wanted it, but had their offer rejected because it was too low, buys it for some reason (more money available or lower house price) after it has gone on sale with Rentons. Whatever, Halifax would have no legal claim to any of the proceeds.

Now... Suppose I see a house I want in the window at my local EA. I don't approach the EA and instead proceed stright to the house and knock on the door expressing an interest to the owner. I tell the owner I'll give them X amount for it and, fed up with the previous lack of interest, they agree, even though its a couple of grand below what they agreed with the EA as their price floor (ie, my offer wouldn't be passed on). I tell them I don't want to involve the EA and I'll buy it if they pull it off the market, thus severing their contract with the EA first. I have no involvement with the EA at all and I don't initiate proceedings until after the seller's contract with the EA has been terminated. How can the EA have a claim?

Alternately... I see a house I want in the EA's window, but I can't afford it. Neither can anyone else. A few months later the seller sacks the EA and decides to stay put. A month after that I win the lottery and, seeing that the house is no longer for sale via the EA, proceed stright to the address and make an offer. How can the EA have a claim?

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It was on at £425k. I called EA to say I wanted to offer asking price, but on condition that seller paid or rebated to me 8% of price (ie 5% deposit + stamp duty). My aim is to keep liquid capital rather than tie it up in an asset that will probably drop in value.

If the objective of this is to defraud a mortgage lender by overstating the true purchase price it would be blatant hypocrisy to complain about the EA for not wanting to get involved. In any case, they may be under instruction to only forward offers over a certain price.

Edited by Jeff Ross

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Okay. Let me try to explain again.

Suppose Mr Vendor puts his house on the market with Halifax. He gets no interest and sacks Halifax and puts in on with Rentons. The house sells but Halifax have no claim to any of the proceeds. It may well be that someone who viewed the house when it was on with Halifax, and wanted it, but had their offer rejected because it was too low, buys it for some reason (more money available or lower house price) after it has gone on sale with Rentons. Whatever, Halifax would have no legal claim to any of the proceeds.

Now... Suppose I see a house I want in the window at my local EA. I don't approach the EA and instead proceed stright to the house and knock on the door expressing an interest to the owner. I tell the owner I'll give them X amount for it and, fed up with the previous lack of interest, they agree, even though its a couple of grand below what they agreed with the EA as their price floor (ie, my offer wouldn't be passed on). I tell them I don't want to involve the EA and I'll buy it if they pull it off the market, thus severing their contract with the EA first. I have no involvement with the EA at all and I don't initiate proceedings until after the seller's contract with the EA has been terminated. How can the EA have a claim?

Alternately... I see a house I want in the EA's window, but I can't afford it. Neither can anyone else. A few months later the seller sacks the EA and decides to stay put. A month after that I win the lottery and, seeing that the house is no longer for sale via the EA, proceed stright to the address and make an offer. How can the EA have a claim?

Point 1 - If the someone who ends up buying via Rentons initially saw the house via Halifax, Halifax may have a claim on the fee depending on how much time had elapsed between the two introductions. If it's 3/4 weeks it's probably Halifax's fee, if it's several months more likely Renton's fee. A slightly grey area i'm afraid.

Point 2 - The EA has a claim because had you not seen it in their window you would never have known the property was for sale.

Point 3 - Exactly the same as point 2.

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It was on at £425k. I called EA to say I wanted to offer asking price, but on condition that seller paid or rebated to me 8% of price (ie 5% deposit + stamp duty). My aim is to keep liquid capital rather than tie it up in an asset that will probably drop in value.

If the objective of this is to defraud a mortgage lender by overstating the true purchase price it would be blatant hypocrisy to complain about the EA for not wanting to get involved. In any case, they may be under instruction to only forward offers over a certain price.

How does this defraud a lender? Surely as long as the value of the house (as established by their independent survey) covers the value of the loan, then what do they care....they actually get a bigger deposit and make more money on a bigger loan. Moreover there is no fraud on the ILR who receive more stamp duty. Doesn't this sort of thing go on all the time in the new build market (ie move in for free offers, deposit paid, house furnished etc...)? Interested to know your reasoning and anyone else's thoughts...

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Point 1 - If the someone who ends up buying via Rentons initially saw the house via Halifax, Halifax may have a claim on the fee depending on how much time had elapsed between the two introductions. If it's 3/4 weeks it's probably Halifax's fee, if it's several months more likely Renton's fee. A slightly grey area i'm afraid.

Point 2 - The EA has a claim because had you not seen it in their window you would never have known the property was for sale.

Point 3 - Exactly the same as point 2.

But how would the EA know I'd looked in their window? And even if they did, how could they prove it?

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oh come on guys, I logged on with a genuine question, don't tear me apart!!

Bah Humbug. :angry:

Let us play with you for a little while at least. :rolleyes:

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But how would the EA know I'd looked in their window? And even if they did, how could they prove it?

It seems a lot would depend on the exact contract between the EA and the seller.

Taken from the Citizen's Advice Bureau website:

You decide not to sell

If you decide not to continue with the sale of your home, you may have to pay some estate agents’ charges, for example, to cover any costs the estate agent has already incurred. This will depend on the original contract between the seller and the estate agent.

You want to change estate agents

You may want to change your estate agent. You should check the terms of the agreement you have with the estate agent to see if this is possible. If it is possible you may still have to pay some charges to the estate agent to cover costs, such as advertising, that the estate agent has incurred.

You have found your own buyer

You may have found your own buyer for the property who has not come through the estate agent, for example, a friend may want to buy the property. You are entitled to sell to a buyer who has not been found by the estate agent but you may find that you will still have to pay the estate agent. What you have to pay will depend on the contract.

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Cheers anyway for the replies I got...all food for thought (even if I have been accused of being a fraudster and off being "outed"!).

Well, ask a silly question.. ;) WAL's only playing. :rolleyes:

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There is a key distinction between two types of contract a seller can have with their EA. One is "sole agency" where the EA with the contract is the only agency allowed to sell the property. If the seller found a buyer on their own (eg through an internet site) they would not have to pay the EA, as no other agency had been used.

"Sole seller" is the other type of contract, where the EA is entitled to their fee regardless of how the house comes to be sold. Think VERY carefully before signing this sort of contract.

When I sold my flat I went through the contract with the EA very carefully, crossing out all the bits I didn't like. When I handed it to the EA he just chucked it in the filing cabinet without looking at it. I would have loved to have seen his face if we'd ended up in court....

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  • 302 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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