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Letting Agent's estate agency fees

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davedoolan | 19:44 Thu 18th Sep 2008 | Civil
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I am about to rent out our house, but a clause in the letting agents T&Cs state that they are entitled to 1.5% commission +VAT if we eventually sell to a tenant. I object to paying them twice - for the letting and then for a sale I haven't specifically requested nor for which they have done no work or incurred any expense. How common is this clause and how enforceable - especially if it was say 3 months after the letting.

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this clause is common and is enforceable if you sign the agreement.
I mean God dont sign a contract with an intention of never abiding with some or all of the clauses

crazy

I would have thought you could negotiate. If they think you will otherwise go elsewhere, it would be sensible for them to cut out the clause. I'll try to find out from my nephew who is a letting agent what he thinks about it.
Sorry for the delay but I've got the answer, straight from the horse's mouth�


Regarding the agent, it would be standard practice for any agent to charge for selling a house. Their principal role is one of introduction and they have done exactly what any other agent would have done - marketed the house and found a buyer.

1.5% is a fairly good rate - some London agents would charge as much as 3%. If your friend had instructed an estate agent to sell the property they would likely have paid at least this, if not more. Having said that, I suspect they would be happy to negotiate the percentage on the basis that it has hardly taken up a lot of their time!! My experience is that most agents are reasonable and if they have not been involved in the price negotiations for the purchase, or overseeing the progress of the sale then part of their job has been done for them.

Two things to do:
1. Carefully check the agency terms. They must clearly state all fees in the terms of business. If they have not been clear about the sale fee, then contest it.
2. Investigate what the typical sales percentage in the area is by calling 3 or 4 sales specialists. I would assume it to be between 1.5% and 2%+VAT. If so, offer the the letting agent 0.75% of the purchase price and I suspect they will either agree or settle at 1% rather than sour relations. Top tip: when speaking to the agent, approach someone you know in a friendly manner and explain the deal simply. If they are approached with aggression they will dig their heals in.

Hope that helps!
Question Author
Thanks for the replies.
I have no problem paying a commission but not at the full estate agent rate when there has been no marketing or extra expenses. I have since found that most will negotiate on that commission.

Of course I have no intention of signing a contract I intend to break, but this question overlaps similar questions on other threads - how long is the agreement enforceable for after the end of the contract? Eg someone views the house, but doesn't proceed to an offer, but comes back a year later and offers to buy the house. Is a fee still payable? 2 years later?

Is there any difference between a sale and a letting contract in this respect?


Thanks again.

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