Agent Fees

Ealier this year we listed our home for auction with a local estate agent.
We had the property valued by three different agents.
We decided to go with the one that valued the propery considerable more than the other two agents.
A couple of weeks after signing the contract we were told that the property was worth far less (in line with the other agents).
We would have been happy selling the property at the price that was first quoted, but decided to remove it from the market when they said the property was worth far less.
We are now due to pay advertising fees and dont want to pay them as we feel we have been deceived to gain our business.
We also made it clear our reserve was going to be 70k above what they were going to quote but they said that is fine, there response was start down low and watch it grow.
The agent has sent us a letter saying if advertising cost are not met they are going to put caveats on the property as well as charge a high interest rate.
This is my first post, I hope you can help.
Regards Jason west.
 
Hi Jason

I am presuming you didn't sell the property. how much has it now increased since the time when you were going to sell it?

you may have to cop the advertising fee but the capital growth may make you feel better:)
 
Sadly many agents "buy" listings by giving the owner a high estimation. As soon as paperwork is signed they then "crunch the vendor" by saying that "market feedback" indicates that a lower price is more appropriate. Usually that price is close to what ethical agents quoted in the first place but lost out to the higher quoting agent.

So lesson #1 is to do your own research to establish an appropriate price. When quotes are obtained average them all out and choose the agent you felt most comfortable with.

What to do?

This will depend on what you have signed. If you agreed to pay for advertising then you will have to pay for any advertising done before you withdrew the listing. I would ask the agent to produce invoices to prove the advertising costs have actually been spent.

A phone call to the Real Estate Agents Board in your state will clarify things further.

Just look on this as a lesson in life.
Marg
 
The capital growth has been great, about 20%. Yes I sound greedy but I have always purchased property never sold, and now I have a better understanding how agents work.
I hope one day we can do with out the agents and buy and sell on e-bay.:)
 
The capital growth has been great, about 20%. Yes I sound greedy but I have always purchased property never sold, and now I have a better understanding how agents work.
I hope one day we can do with out the agents and buy and sell on e-bay.:)

lol why ebay? doesn't ebay take a commission aswell? i would rather use an agent then ebay any day but otherwise some other website which is not commission based.
 
The capital growth has been great, about 20%. Yes I sound greedy but I have always purchased property never sold, and now I have a better understanding how agents work.
I hope one day we can do with out the agents and buy and sell on e-bay.:)

I hope not, i'm trying to become an agent!!!!!

For the record, i plan on being an ethical one at that!
 
I respect ethical agents, unfortunately they sometimes miss out on listings for been honest.
Ebay is ok, yes they charge commision but I dont think it the way to sell property yet.
 
We had the property valued by three different agents. We decided to go with the one that valued the propery considerable more than the other two agents.
First off they "appraised" your property. Only valuers can "value".

A couple of weeks after signing the contract we were told that the property was worth far less (in line with the other agents).
Old RE trick. They "bought" your listing. Then tried to "condition" you down or "crunch" you down - to the real market worth.

We are now due to pay advertising fees and dont want to pay them as we feel we have been deceived to gain our business.
Pay what you owe, would be my advice.....and write off the no-sale as experience.

As a side note, they probably did you a favour - since you held and made another 20%.
 
I respect ethical agents, unfortunately they sometimes miss out on listings for been honest.
Ebay is ok, yes they charge commision but I dont think it the way to sell property yet.

I understand that, but one thing about ethical agents, is people go okay this one was an idiot, let's try this one instead they seemed to be honest.

Ethical gets repeat business, more important than a one off. ;)
 
When I do an appraisal, I give a figure that I think people will take the money out of their pocket and pay in the current market. Oft times lose the listing to another agent who has "bought" that listing but I know that I can live with myself. And as generally happens, the seller comes back after a couple of months, because he was trying to sell his overpriced property ....
 
Perhaps a politely written letter of complaint to the offending sales office documenting what you feel was a bought listing, including any data to back up your claim, mention that perhaps the agency might be prepared to negotiate or waive the fees as an act of good will.

Possible leverage would be a further complaint to the head office and the real estate institute. Also it might be worth your time examining the original documents and seeking some qualified advice, a large percentage of them are not completed correctly and that might be a window of possibility.

In the end things have worked in your favour by holding so I wouldn't be looking for too much of a fight, though it would be good to challenge possible unethical behaviour.
 
jason west - If you've signed a contract to the effect of having to pay the advertising/other costs if you don't sell then I would say you don't have a leg to stand on.

I recently went to sell a property, one agent quoting $40-50k (around 10-15%) higher than the second. I had a good idea of what properties were selling for, so went with the second agent that wasn't over-quoting. Was looking for a quick sale to get it through before Christmas and didn't want our agent to be stuffing around potential buyers trying to get more than it's worth. We advertised for a realistic price and got one.

End of the day it's your decision what the house is advertised for, should have done your research on market value/sales in the area...
 
I don't think you have much of a case either. You assumed the agent was over quoting when you entered the agreement. Would be far easier and safer and maybe even fairer to pay the amount owing - how much is it?

On the other hand I don't think they have any basis to lodge a caveat and if they do lodge one you should seek legal advice of getting it removed and costs.
 
Top