|
We live abroad and our UK house is rented out. Before we moved, it was on the market with an estate agent. Although they found a buyer the sale fell through. As a result we ended up keeping the house and renting it out, using the lettings department of the same estate agents as managing agents, who found us the current tenant. This tenant has professed a desire to purchase the house, and has said as much to the letting agents. The letting agents are going to let me know what the sales division (of the same company, who had the house on the market initially) think about the value of the house. I'm keen to strke a private deal with the tenant regarding the purchase, and thereby expecting to save estate agency commission. Question: given the scenario above, does the team think the estate agents have a legal claim on commission given the circumstances?
|
|
How long has it been rented?
|
>> How long has it been rented?
Started in mid September 2009, and renewed in September 2010 for another year.
|
|
Only if you're currently contracted to the sales side by having signed an agreement. All estate agents do is look for and find potential buyers. If a buyer finds you don't pay them.
|
|
We used a letting agent a couple of years back who had a clause that if the place was sold to a tennant while under their management they received 0.5% commission.
|
|
...substantially lower than an estate agent's fee - check the paperwork !
|
|
Yes we were happy with that as the intention was to sell it on after the tenant left anyway... so had they bought at the 0.5% we'd have been well up on the deal.
|
>>if the place was sold to a tennant while under their management they received 0.5% commission.
Or even 0.75% of the agreed sale price (plus VAT).
|
Most agreements through letting agents will have a clause about you selling to the tenenants. Dont think you will get away with nothing, but you should be able to come to an agreeable figure.
However you cut it they did introduce the buyer to the property
|
Following the Foxtons case you may well find that "introducing the buyer" where the buyer is your longstanding tenant does not entitle the agent to a receipt of commission REGARDLESS of what the contract said.
business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article7033985.ece
I suggest posting somewhere like housepricecrash or landlordzone to see what people think. (On the former site, beware Foxtons-hating nutters, but you might get some sensible advice.)
However, if the agents are valuing the property then clearly you are getting them involved.
You want to be a bit careful here. If they think they are in with a chance of a commission fee, then they may well value low so as to encourage the tenant to buy - you're miles away, remember so don't have a clue what's right. Alternatively if they think they won't get a commission then they may over-value in order to continue getting the letting fees.
Last edited by: Mapmaker on Fri 28 Jan 11 at 15:23
|
|
BTW the 0.5% (I'm sure that would have been +vat) I mentioned allowed for the letting agent getting the place valued and doing all the legwork with the tennants.
|
>> You want to be a bit careful here. If they think they are in with
>> a chance of a commission fee, then they may well value low so as to
>> encourage the tenant to buy - you're miles away, remember so don't have a clue
>> what's right. Alternatively if they think they won't get a commission then they may over-value
>> in order to continue getting the letting fees.
>>
Hmm, food for thought, but I have a reasonable idea of the value as it was sold subject to contract in 2009. I had a conversation with the selling agents in the middle of last year with regard to the "value" then, so I've got some history. And, at the end of the dy, it's only worth what someone is prepared to pay - we effectively lost 3 months of prime spring selling time in 2009 because it was simply totally overvalued by another agent. If it had been on the market for a sensible price at the beginning we wouldn't have been where we are now :-(
|
"However you cut it they did introduce the buyer to the property"
Well you employ and pay them to act as an agent to manage the letting not to sell the property. That they should pick up a further couple of grand because a tenant would like to buy the property seems outrageous
|
>>That they should pick up a further couple of grand because a tenant would like to buy the property seems outrageous
They don't do anything for nothing. If anyone thinks that their letting fee of between 10 - 15% of the rental is all they are going to have to fork out, then they are likely to be disappointed.
|
>> Well you employ and pay them to act as an agent to manage the letting
>> not to sell the property. That they should pick up a further couple of grand
>> because a tenant would like to buy the property seems outrageous
>>
My thoughts entirely! But as others have suggested, looks like a good time to check the rental contract. The house is worth around £450,000 so the odd 0.25% is substantial!
|
>> However you cut it they did introduce the buyer to the property
>>
Irrelevant. Their contract was LETTING.
|
>>Irrelevant.
I wouldn't bank on it. Unfortunately.
|
Selling rented house to a tenant - commission? - Zero
