Always, always, always thoroughly read any document before signing!!
The standard RESI contract between a seller and an agent always contains a clause which entitles the agent to deduct from the deposit the entire commission if a sale falls through after the contract of sale is signed by a purchaser.
In my extensive experience, agents will always delete this clause if a seller requests it prior to signing the agreement. Your signature on the agreement with the agent is an acknowledgement by you that you have read the document and agree with terms.
The commission agents charge is also negotiable, down to 50% or less of the standard commission, for a property of high value.
Not reading the document thoroughly, given the large amount of money involved would, in my view, Iâm sorry to say, be regarded by a court as clearly negligent, and I would be very surprised if you would get any return on investing in lawyerâs fees to recover funds from the agent.
Fair comment, Bill, although if agents are always prepared to delete the clause if requested, it makes one think about its legitimacy. From the agentsâ point of view it is a successful sale, but not the sellersâ.
My brother had a similar experience, except he was the purchaser who after consideration decided not to proceed with the purchase. It was a distressing time and he was advised at the time he would be responsible for any and all monies that were due and/or incurred including the agents commission and any fees the vendor had incurred for advertising, conveyancing, legal expenses etc.
The estate agent, unless he had engaged in deceptive or misleading conduct in relation to the sale, is entitled to the fee for the services he provided and defined in the contract. This could be verified by determining (or obtaining a statement) why the purchaser withdrew. Deposit monies are not a bonus, but are sought to ensure the bona fides of the purchaser to commit and to ensure should they seek to withdraw, the efforts and costs of time and investment are covered so there are no out of pocket expenses. At the end of the day you still retain the âassetâ and can relist.
The purchaser is the primary person at fault, their penalty is loss of their deposit, if the deposit did not cover the agents commission then the agent should be seeking it from the purchaser.
If I were in your position I would be seeking some clarification from the estate agent regarding the circumstances for the buyers change of mind, verify whether the agent acted in an ethical and due diligent manner in sourcing potential buyers.
Hi JAS
You wrote: âThe purchaser is the primary person at faultâ. Agreed, and they paid in excess of $90,000 for not proceeding with the sale after the exchange of contracts. For them, it has been a bitter lesson as well.
The facts are as the seller, it is also very stressful, given the cost of renting and being prevented from looking at a new home for the future.
The agent received payment well in excess of the costs incurred and for the agent it is almost the same as a successful sale. For the buyer it is a disaster. In fact, given online sale options these days, and the ease of uploading photos and video clips onto real estate sites that allow this, one might be tempted to bypass the agent in the sale process, given the amount of profit on the sale this agent received.
I understand the costs of advertising, maintaining office staff, travel, time, and the network of customers that many agents have built up over years etc, but this particular case study raises many issues.
