Changed mind about selling. Will estate agent expect payment?

My friend was going to sell her house. Went through the whole process with the estate agent. Three people placed bids on it and finally it was sale agreed. However she has changed her mind and now wants to keep the house.

Yes, she knows a few people will be less than impressed but her question is this: Will she be expected to pay the estate agent?

I would think so,even if it was "no sale,no fee" they found a buyer,your friend pulled out,that's not their problem.

I don't know, if it was no sale no fee, and there was no sale...

I think the EA might ask for payment, but I wouldn't be inclined to pay for it, people changing their minds is just a cost of doing business.

Was any contract with the agent signed? If so that should clarify matters.

Filthyrich,

I am in kinda the same postion at the mo, only im changing EA and not not selling.

I was on the understanding that it was no sale no fee, but i was wrong. the EA originally sent me out a letter when i deicided to go with them, but i didnt read it, i was just excited about moving!!! And now im stumped with a bill for €300 and they are holding me to ransom, they wont givve my key back and they wont take my property off myhome.ie .

So now i have another EA who also put my property on myhome so its on it twice. That doesnt look good to potential purchasers but the old EA says they are not taking it off until i cough up. I didnty sign any contract or verbally agree this but im obtaining legal advice about the situation. they were the first ones to mention Solicitors when i said i might not be paying,,,,,because i was unhappy with the service.

So to answer your query , well ill answer when i talk to my solicitor which will be Monday or Tuesday of next week!!!!!!!

The €300 isn't their fee though, it's their advertising costs. Normally you would have to pay those if you pull out. €300 would barely cover the cost of MyHome.ie, a sign, and their time. I think FilthyRich is referring to the actual commission fee, which would usually be around 1% of sale price.

MugsGame said:

The €300 isn't their fee though, it's their advertising costs. Normally you would have to pay those if you pull out. €300 would barely cover the cost of MyHome.ie, a sign, and their time. I think FilthyRich is referring to the actual commission fee, which would usually be around 1% of sale price.

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Myhome is €165 plus vat which makes it around €200 but my new EA is covering the cost of this by getting myhome to credit old EA and debit his account. But old EA say "i know somebody in myhome ie" so they wont pull it unless he says so. In my opinion hes an arsehole. Im not going to say his name orAgency but if hes reading this he will know who he is.

Sorry i know thats off topic. Im zipped!!!!

moesha said:

the EA originally sent me out a letter when i deicided to go with them, but i didnt read it

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What did it say? Was there a written contract? Was there a verbal contract? Can anybody else comment authoritatively on the legalities of the situation and the rights and responsibilities of each party in such a situation?

I would assume that the no sale no fee would only apply if they hadn't achieved a sale on a person's behalf. They got to a "Sale Agreed" stage and your friend changed her mind, that's not their fault. I am no fan of EA's but they kept their end of the bargain/contract and got her a sale so why should they be left out of pocket because she decided not to sell, they are entitled to charge for at least any work they can show they have done, such as advertising, viewings, negotiations aren't they?

Edit to add, I am speaking from some experience, we put ours for sale some years ago via an EA and had some offers, but for various reasons we took it off the market and some time later agreed a private sale, we still felt it right to pay the EA for the work they had done however as it was entirely our choice not proceed with a sale at that time.

Say the buyer has pulled out after sale agreed......Seller/EA would have had to start the process again and spend more money into advertising. Not a cent would have been paid by the buyer for the inconvenience.

So, in your case, i would only be fair that your friend pays for advertising cost incurred to date but she should not be expected to have to pay for more than that.

Not that entirely agree with that because EA has spent time funding a buyer, but EA conducts an "opaque" business with their bidding stuff conducted in their head, so sometime it serves them well to loose a bit...

As there aren't any full answers here yet, this might be some help:

The question is related to the Law of Agency:

Is the EA engaged to "find a buyer" (in which case in your particular situation, the EA has fulfilled her/his obligations under the contract)
or is (s)he engaged to "effect a sale". (in which case, since there was no sale and so the EA is not entitled to a commission). However even in this second scenario there may be an express or implied term in the contract that where the principal (i.e. you) is the cause of the sale not being effected, then the agent is entitled to damages equivalent to the amount of commission due had the sale occurred.

If the amount of commission received by the agent is particularly high, there may be an implied condition in the contract that no commission is due if the transaction between the principal and the third party is not executed, despite the fact that this non-execution is due to the actions of the principal - i.e. because the commission is high, the agent bears the risk that the transaction does not occur.

In any case the agent (i.e. EA) will be indemnified by the principal (i.e you) for any outlay in the course of the agency relationship.

I suspect that since the commission received by an Estate Agent is generally relatively high, the risk is borne by the Estate Agent, unless there is an express term in a written contract to the contrary.
However I am not a lawyer so I cannot give a definitive answer.

Can I just point out that while the cost of listing on myhome.ie would be €195 + VAT, it is likely that the reason the EA charged €300 is because they are trying to recoup the labour of inserting into myhome.ie which requires photographs to be taken & formatted and a brochure to be compiled. In a normal sale situation the EA recoups labour costs in the agency fees, but where a vendor decides not to sell; it's a loss of profit for the EA.
In the case of a normal EA contract, there would be no agency fees payable as these are normally payable on CLOSING of the sale of a property. As the property has not effectively sold, then there are no fees due - there should be a clause to this effect in the contract. However, it is also normal to have a clause that all marketing fees are due to the EA which has been incurred on the client's behalf. This would be my experience of most of the larger EA chains in Ireland.

When we sold our house, the situation as mo3art outlined was made clear to us by the EA.
If we pulled out at any stage, we did not owe them any fees, but all upfront costs (advertising, myhome.ie, sign) were due, which seems very fair.

Not giving you your key back seems very harsh.