Estate agent fees advice req'd

Estate agent fees advice req'd

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afzala

Original Poster:

157 posts

201 months

Saturday 18th April 2015
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Im in the fortunate position to be considering a second house purchase as a buy to let investment. A while back my neighbour mentioned that they may be selling up and that i would get first shout over it if interested when the time was right for them to move on.
Im really keen to buy it, as in the long run it may prove useful for parents to live in as they get older so that i can care for them, so buying it would tick a number of boxes. The neighbours recently told me what they thought it was worth, and it happened to be £200k more than i anticipated, but i was not put off. I told them my limit and said they should seek valuations to get a fair value and then i would consider the offer. Today they told me that they had now listed the house through an agent at a price about £100k more than i had valued it.

My question is how i should play this to get the best outcome. Its clear i really want it, but i have my limit. If i approach them directly and simply say that i will beat any offer they recieve via the agent, would they save estate agent fees if they sold to me directly without any agent involved? Would this give me a stronger position, or would the agent always get a slice. Im really tempted to visit the agent to lay my cards down in respect of offers, but this would rule out me having the upper hand of offering the neighbour a daving of agent feès. What do you think i should do?

spikeyhead

17,222 posts

196 months

Saturday 18th April 2015
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I'd just wait, unless you're prepared to pay an extra £100k.

If it has been overvalued then it won't sell, your neighbour will become annoyed with the EA and you'll then be in a good position to do a deal.

Jasandjules

69,825 posts

228 months

Saturday 18th April 2015
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Is it overpriced compared to similar local properties?

afzala

Original Poster:

157 posts

201 months

Saturday 18th April 2015
quotequote all
I am correct in thinking that if i buy directly from the neighbour, then they would save on the estate agent fee, even though the neighbour has now listed the house with one agent? I want to be able to use this saving as a bargaining tool if it is possible.

elanfan

5,516 posts

226 months

Saturday 18th April 2015
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Think your neighbour may be in difficulty not paying an agent they are contracted with. However it is clear that the EA did not introduce you to your neighbour and there was prior interest in purchasing the property. Perhaps your neighbours should clarify the position with the agents maybe excluding you as a purchaser should they agree selling yo you.

Jasandjules

69,825 posts

228 months

Saturday 18th April 2015
quotequote all
afzala said:
I am correct in thinking that if i buy directly from the neighbour, then they would save on the estate agent fee, even though the neighbour has now listed the house with one agent? I want to be able to use this saving as a bargaining tool if it is possible.
Quite probably, you were not introduced by the EA.

anonymous-user

53 months

Saturday 18th April 2015
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Neighbour should have agreed with EA that your prior interest was outside the agreement and that if you end up buying it, no fees due

If EA does get them £100k more than your valuation, then EA has earnt her corn

If EA is flying a kite, it won't sell and you will have your chance - but £100k is a fair whack to move once that number is in the seller's head

NDA

21,485 posts

224 months

Saturday 18th April 2015
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It depends on the contract that the vendor has with the agent.

I bought a house from a neighbour who had, just one day before, put the house with Hamptons (I didn't find the house through the agent). There was no way of avoiding the Hamptons fee unfortunately - they hadn't even advertised it or produced a brochure either.

blade7

11,311 posts

215 months

Saturday 18th April 2015
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afzala said:
I am correct in thinking that if i buy directly from the neighbour, then they would save on the estate agent fee, even though the neighbour has now listed the house with one agent? I want to be able to use this saving as a bargaining tool if it is possible.
Why would the vendor pass on the saving to you and risk being sued by the EA rolleyes.

Sir Bagalot

6,463 posts

180 months

Saturday 18th April 2015
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Those sort of differences mean a high value house. Are you sure it will pay in rental yield terms?

scenario8

6,554 posts

178 months

Saturday 18th April 2015
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FWIW if it ever got as far as the Ombudsman the agent would have next to no hope of recovering any part of their fee if they genuinely made no contact whatsoever with you about your neighbours' property as described above.

If you're prepared to outbid any offer through the agent (and I can only assume you don't want to make a bid ahead of your neighbour exhausting the open market) I guess you're in for a waiting game now.

There's not much in this for the agent, is there...?

On the wider point it sounds like you're considering making an investment of a very large sum of money so I'd like to think you're putting an awful lot of thought into this venture.

Best of luck.

dave_s13

13,813 posts

268 months

Saturday 18th April 2015
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afzala said:
The neighbours recently told me T what they thought it was worth, and it happened to be £200k more than i anticipated,

Today they told me that they had now listed the house through an agent at a price about £100k more than i had valued it.

?
How can you be so far apart? One if you is being very unrealistic.... Unless were talking about a (very) above average property price.

afzala

Original Poster:

157 posts

201 months

Saturday 18th April 2015
quotequote all
The return on investment is decent enough. The property prices in my neck of the woods have seen crazy price rises in recent years (East london) so I don't see much risk on that front. The value is also sizeable enough (over 600k) for the valuations to be all over the place.
looked out the window this morning and there was a road block caused by viewings lined up by the agent. I think this will be a bidding war at this rate at which point I may well have to bail out..

afzala

Original Poster:

157 posts

201 months

Saturday 18th April 2015
quotequote all
I do have email exchanges with my neighbour going back several months where we have discussed the potential sale to me, so I can evidence this in this way. It would be best avoided though to end up going down such a root as it is not in my comfort zone.I would only consider it if it is clear cut that I am ok to do as I mentioned. The feedback so far suggests that it may be possible but agents may try to get their hands on a slice either way

smashie

685 posts

150 months

Saturday 18th April 2015
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When I sold my last house I put it on the market with an estate agents, however I told them that one of my neighbours was interested (did not say which one). My other neighbour (not the one I originally thought would buy it) bought my house and I was not charged by the agents. I did not get any hassle from the agents as it was all made clear prior to signing contracts.
If they have not declared your interest to the agent, then the agents may want that proof or they will want to charge the sellers.

crankedup

25,764 posts

242 months

Saturday 18th April 2015
quotequote all
Our last house we sold a couple of years ago we looked at several agents before settling for one. All much of muchness TBH, however one did stand out and the reason was deep down in the small print. A clause inserted that if the agent found a buyer and we agreed to sell then the agents fee's are payable in full in the event we pulled out of the sale. That is if we changed our mind or some other reason. Obvious get out's included bereavements, lose of job and so on. So cold feet would be extremely expensive.

JQ

5,691 posts

178 months

Saturday 18th April 2015
quotequote all
crankedup said:
Our last house we sold a couple of years ago we looked at several agents before settling for one. All much of muchness TBH, however one did stand out and the reason was deep down in the small print. A clause inserted that if the agent found a buyer and we agreed to sell then the agents fee's are payable in full in the event we pulled out of the sale. That is if we changed our mind or some other reason. Obvious get out's included bereavements, lose of job and so on. So cold feet would be extremely expensive.
That's a pretty standard clause for most EA contracts. They are paid on commission, if they do their job and secure a sale, I don't see what's wrong with them getting their commission. It's there to stop timewasters and dreamers. Cold feet would also be expensive for the purchasers.

surveyor

17,767 posts

183 months

Sunday 19th April 2015
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JQ said:
crankedup said:
Our last house we sold a couple of years ago we looked at several agents before settling for one. All much of muchness TBH, however one did stand out and the reason was deep down in the small print. A clause inserted that if the agent found a buyer and we agreed to sell then the agents fee's are payable in full in the event we pulled out of the sale. That is if we changed our mind or some other reason. Obvious get out's included bereavements, lose of job and so on. So cold feet would be extremely expensive.
That's a pretty standard clause for most EA contracts. They are paid on commission, if they do their job and secure a sale, I don't see what's wrong with them getting their commission. It's there to stop timewasters and dreamers. Cold feet would also be expensive for the purchasers.
Ready, willing and able......

Gnarlybluesurf

263 posts

175 months

Sunday 19th April 2015
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If you're certain it's overpriced and you're happy to miss it if it goes then hold out.

Depending on how much you trust the neighbours and how quickly they need to sell you could always agree that you'd match any figure they got confirmed in writing from the agent via a private sale... Hence getting them an extra few thousand.

If you're not sure and it'll be pretty hard to prove it's not one of their friends offerering then you'll have to hold out and risk losing out as a 'friend offer' will not come to fruition.

I don't see the issue with the agent... If you don't register with them, then the seller can just withdraw it from sale 'as they can't afford to sell at that price and want to do the place up a bit before putting it on the market again or easier just to say they've changed their mind and don't want to sell'

Then they sell it privately to you.

At the end of the day the agent will be after them for the fee not you and it will rely on them monitoring the property for removal vans/ the land registry and then getting information off you as to what happened. Which you won't give.

blade7

11,311 posts

215 months

Monday 20th April 2015
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surveyor said:
Ready, willing and able......
I'd heard of this when I sold my last place 10 years ago, none of the EA's I spoke to back then tried to include that.