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Estate Agents Commission


Lascoux
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I have a

contract (sans exclusivite) with an estate agent and am also trying to sell

privately via internet etc. A potential buyer initially contacts me directly

and I send them many photos, plans, inventory etc, but when this buyer wants to

view I am back in England. This buyer then (unbeknown to me) views via the

estate agent who now wants to claim they are his clients and says they have

signed a ‘bon de visite’ with him. I thought an estate agents commission was

payable only if they had ‘introduced’ a client directly to the property. In

this case my work had resulted in the buyer becoming aware of the property. In

fact I had ‘introduced’ the buyer to the property myself. The estate agent

seems to think that I have nothing signed to this effect, but he has a signed

and stamped ‘bon de visite’. I only have email proof that I have dealt with

this buyer directly before they became involved with the estate agent. So can  the estate agent legally claim these buyers to

be his clients and be entitled to his commission in this case ?

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It seems perfectly reasonable to me if he took them and showed them round the property, has un bon de visite and a signed mandate from you, I would say that he has earned his money in as much as any French immobilier does, not many seem to think that they are responsible for marketing the property.

Would the situation be any different were this to have happened in the UK?

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If you were available to do the visits then it would be different, but you are using the estate agent services. Also the people who are buying know that it is they that will pay the agent and have chosen to do so.

I don't see what you are getting so upset about.Your being available is the key here.

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Surely you don't expect the estate agent to show the clients around and then not earn the commission?

After all, they have an office with all attendant costs and their time, car, etc to facilitate the sale.

Sometimes, purchasers don't like to deal with owners direct and don't like to discuss money and they like to buy through a third party.

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Thanks for comments. I agree that normally the buyer pays the estate agents commission, so there would be no problem. Unfortunately, what has happened here is I had another buyer who approached me privately and offered to pay the full asking price. I naturally accepted this and the same afternoon we all met in the notaires office where details were taken, but nothing actually signed. The estate agent is claiming that if I sell to my private clients, then he is entitled to his commission even though at the time his clients did NOT offer the full asking price. In the time taken for the Compromis de Vente to be drawn up for my private buyers, the estate agent has been able to get his clients to raise their offer to the asking price. So I am now piggy in the middle. If I sell to my private buyer (who was the first to offer the sale price), then the estate agent has threatened to come after me for his commission. On the other hand, if I sell to the Esate Agents clients, then my private buyers are threatening legal action. When I see the notaire I have more or less decided which buyer I want to sell to, but I am very interested in hearing comments, suggestions.

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One other point. I agree with peoples comments that if the estate agent does the work he is entitled to his commission, but as far as I can tell from a legal perspective, this commission is payable if the estate agent 'introduces' a client to a property. Everything seems to depend on what is meant by 'introduce'. I would have thought that my paid for advertising and sending photos, plans, inventory and answereing questions about a property and saying exactly where the property is, amounts to 'introducing' someone to a property. This whole thing would not be an issue except for what has happened as explained in my previous post.

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If I were you, I would sell to the private clients, pay the agents' commission and let the agents deal with their own prospective clients, explaining that the other offer came in first, pacify them, buy them a drink, whatever.  In other words, let them take the flack.

Now, this might not be what you want to hear but, from my point of view, I'd just be glad I have managed to sell at a price that I would have been pleased with before all of this and not try to save the commission and end up with no end of hassle and bad feeling.

Put it this way, if the private clients hadn't come along and you were getting your asking price from the agents' clients, you would have been happy, wouldn't you?

So, just get the sale wrapped up so that you can have the money in your bank and can move on to do other things.  Looking back in a couple of years' time, that commission would not seem such a big deal and you might be glad of opportunities and other good things that could be just waiting round the corner.  In fact, you might be thankful you didn't waste time in which you could be doing any number of things than be engaged in arguments and bad feeling.

In the context of the sale, the commission is what, a maximum of 10 per cent?  Pay it and plan the next big "to do" thing on your list.  

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Is this the sequence of events?

The clients who the agent brought round offered under the asking price which you refused.

Your privately found buyers viewed and offered full asking price which you accepted.

You went to the notaire with the privately found buyers but nothing was signed.

The estate agents viewers upped their offer to asking price.

If that's it, then I don't see that you have any obligation to pay the agents fees. The notaire can presumably back you up in confirming that you'd accepted a full price offer from the private buyers before the agent's customers increased their offer. The only possible difficulty could be if there was a delay in you telling the agents that you'd accepted another offer.

I'd think that your notaire would help and advise.
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Yes, this is the sequence of events. We had an offer from the estate agents only 5000 euros under the asking price. We had not accepted this offer at the time, but were considering it. Then out of the blue came private buyers in response to one of my internet ads. The rest is as you have stated. The notaire has seen all emails etc and has come round to saying it's up to us which buyer we choose. But he does point out that the losing side could pursue it further. Basically notaire not wanting to commit himself. The estate agent stands to loose 12000 euros commission if we go with our private buyers, so he is trying all tactics to coerce us into accepting his buyer, although under our english 'first come first served' it's our private buyer who offered the full asking price first. We informed the agents by registered letter as per the contract that we had found a buyer, but estate agent seems to be saying that since no Compromis was actually signed at the time, then an actual sale did not take place. This appears to have given him the time to get his buyers to increase their offer. Under our contract, if the estate agent finds a buyer at the price we were asking, then we are obliged to complete the sale with them. Yes they did eventually find a buyer at the price we were asking, but AFTER our private buyers who got in first with the offer at the asking price, but nothing was signed at the time.

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12000€ in commission, wow you must have one expensive house.

I had thought that nothing was set in stone until the compromis had been signed. That is why it is signed, to seal the deal, what value has a handshake in legal terms? Also are these cash buyers, if not, then personally I would go with the one who didn't need a mortgage, it'll be quicker.

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No it's not an expensive house, it's just the very high fees charged by French estate agents to sell a house. This is really the cause of many problems, because the commission is so large, it leads to a lot of unscrupulous tactics. Paying a commission of up to 10 per cent is not unusual in France. In UK we are looking at 1 to 1.5 per cent commission.

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I understand that you are worried about your house sale and I don't want to be rude to you but it's no good talking about "in the UK" and according to English practice, etc etc.

I need hardly remind you that this is France and the rules for house transactions are not the same?

I, too, understand that no compromis means no obligation.  I seem to sense that you have already made up your mind and so I won't waste any more time contributing to this topic.

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I negociated the estate agents fees when we were selling and they were 7000 euros. No way was I having the potential buyers paying more, as far as I was concerned if they paid them, they weren't paying us and people usually have a budget don't they? 
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[quote user="Lascoux"]No it's not an expensive house, it's just the very high fees charged by French estate agents to sell a house. This is really the cause of many problems, because the commission is so large, it leads to a lot of unscrupulous tactics. Paying a commission of up to 10 per cent is not unusual in France. In UK we are looking at 1 to 1.5 per cent commission.
[/quote]I think you are a little out of touch with the UK situation. We have been quoted by several estate agents a fixed fee of approx £800 straight up to pay for brochures etc plus 1.6% on the sale price once the propery is sold for an exclusive deal.  I suspect that estate agents are raising their fees to make up for the slow down in the property market.
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I don't think you negotiated very hard Rabbie, or maybe Newcastle is an oasis. We had 4 agents round to our house in the UK, all keen to sell it and all but one offered a deal well under 1%. We eventually settled on just under 0.75% plus vat. Advertising was £300. We had an offer within days and have sold within 8 weeks.

What gets me is just how cr*p French immobiliers are for their 4, 5 or 6% + TVA. No marketing, abysmal websites and appalling (and often irrelevant) photos. If you ask me they all need a rocket up the backside, I mean, some property photos I've looked at online looked more like exhibits from the Tate Modern, unmade beds, litter and clothes everywhere...... Compared to that, proper marketing, a good brochure (pdf and hard copy) and a bit of effort is great value in the UK at a fraction of the cost. And I know someone will say that social charges are high in France and blah blah blah but come on, some of these guys seriously need to go out of business!

We've got an apartment to sell next year and it worries the you know what out of me putting it in the hands of a French agent, lets hope I can get to take some decent photos meanwhile!!
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I was also quoted 1,7% in the UK or a fixed fee which worked out at more than that. I had 3 agents in and tried hard to negotiate with all of them but they wouldn't budge so assumed it was agreed between all the agents. They all quoted the same percentage.

Maybe it does vary in different areas - I am in the south west.

Laurier
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[quote user="Daft Doctor"]I don't think you negotiated very hard Rabbie, or maybe Newcastle is an oasis. [/quote]I assure you I did. See Laurier's post. I am also in the South so thing may well be different in the North. It may alsobe affected by the type of property being sold.  As it is a property with land I have to use a specialist Agent which reduces the amount of competion.
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[quote user="Rabbie"]It may also be affected by the type of property being sold.  [/quote]

IMHO this has a lot of bearing. We had valuations from 3 estate agents and their commissions varied from 1% to 1.25%. We chose someone whose team I felt comfortable with, their commission was 1% and advertising at £250 maximum, though we didn't use all of that as the house sold in less than 5 months. All 3 agents said the house would sell easily even though the market was tough at the time.

Sue

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[quote user="idun"]I negociated the estate agents fees when we were selling and they were 7000 euros. No way was I having the potential buyers paying more, as far as I was concerned if they paid them, they weren't paying us and people usually have a budget don't they? [/quote]

How I wish that was possible here as the local estate agents are extremely greedy. Their idea of a discount on their fees consist of dropping them from 5% to 4.5% - if you are lucky. With average house prices here being circa 300 000€ we have an abundance of well-heeled agents.

Sue

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And if you are selling a lower-priced property the percentage is even higher. [:(] Acquaintances are selling a small property near us and out of the 141,700 euros asking price (already reduced twice) they will get 130,000.  That's 9% for the immo.  When we bought our very cheap renovation project in 2003, we paid 10%. The local Discount Immobilier announce proudly in their adverising that they 'only' charge 3.75%!

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Point taken Rabbie, I was advised to stay away from big national chains in favour of locally based agents. Also our house is in a very popular area so I think all the agents were confident of shifting it. I stand by my comments on French immo's though, someone really needs to shake that lot up. Imagine if one of them was brave enough to cut fees to say 2%, they'd corner the market overnight or force others to follow. Even if one of them decided to do a better job of it that would be something.
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[quote user="KathyF"]  Acquaintances are selling a small property near us and out of the 141,700 euros asking price (already reduced twice) they will get 130,000.  That's 9% for the immo.  [/quote]

Gosh that is verging on robbery. What some internet savvy sellers are doing here is using a local agent immo but not on an exclusive contract, then marketing the house themselves on the free site le bon coin. This means that the seller benefits from the advertising/exposure of the immo but a buyer who sees the house on le bon coin can buy circumventing the agents fees. Some agents are not too happy about this but there you go ... in a buyer's market it must be expected IMV.

Sue

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