This one is more of a moral question rather than a legal question. In these circumstances, should I offer to pay anything to the agent and if so how much should I offer to pay them:
I owned a property, it was rented via a rental management agreement.
The tenants wanted to buy the property and informed the agent.
The agent phoned me and told me the tenants wanted to buy the place.
I contacted the tenants and spoke to them. Initially I was not going to sell it. I paid to get a valuation, then changed my mind, contacted the tenants and sold it to them. The contracts have just been exchanged.
I know the agent and I like them a lot, I phoned them to let them know what was going on and offered them a case of champagne or some money as a finders fee. They have suggested that the right thing to do would be to pay them 1.8% of the $280,000 sale price as a 'reduced' commission.
A few things here:
I was (naively) surprised at the above. My thoughts had been that under a rental management agreement they are acting simply as a managing agent. ie, as it says on the front of the agreement: My-Name Landlord, care of managing agent, their address-and-contacts. Thus, if the tenant requested them to contact the owner and they passed this on, if they got the business, all the better for them. But otherwise they have no *entitlement* to it. As to the exact legalities of this I have no idea. Can anybody add any comments on this? I had honestly not even considered that I was under any obligation to do anything. Hence why I was surprised.
After talking to them I got legal advice. The Lawyer told me that I "was not to pay them a single cent under any circumstances" and pointed to item 55 in the Property, Stock and Business Agents Act 2002. I was already reasonably clear that I had no legal obligation to pay them and to the agents credit he had told me that they likely have no legal way to extract the money from me.
So the final and most important question is this. Morally, how much should I pay these guys? I like the guys, and do I feel for their waisted effort. I don't want to feel that I am ripping them off, and I certainly don't want to feel ripped off my self. Approximately what portion of the effort or cost of a sale did they put in? If I can come up with some 'non-emotional' figure, that would make me happy and make it easier to present to them. Here is approximately what they did:
Tenants contacted them, they contacted me, I said had to think about it.
They mentioned a ball park range, ie 'under 300,000'. (I later got two valuations (that I paid for) one at 270,000 and one at 245,000).
They called me again, I had not had a chance to think about it properly, and said that I still had to think about it.
They never called me again (I think the specific agent had gone on holiday).
They drove the tenants around to look at other similar properties.
They had no advertising costs, no legal costs or major paper work, did not take any photos and they did not utilise their database of clients to find other interested clients that may have driven the price up.
So considering that their full price commission would have been $10,920, what approximate portion of that value did they actually do?
Cheers! -alex
I owned a property, it was rented via a rental management agreement.
The tenants wanted to buy the property and informed the agent.
The agent phoned me and told me the tenants wanted to buy the place.
I contacted the tenants and spoke to them. Initially I was not going to sell it. I paid to get a valuation, then changed my mind, contacted the tenants and sold it to them. The contracts have just been exchanged.
I know the agent and I like them a lot, I phoned them to let them know what was going on and offered them a case of champagne or some money as a finders fee. They have suggested that the right thing to do would be to pay them 1.8% of the $280,000 sale price as a 'reduced' commission.
A few things here:
I was (naively) surprised at the above. My thoughts had been that under a rental management agreement they are acting simply as a managing agent. ie, as it says on the front of the agreement: My-Name Landlord, care of managing agent, their address-and-contacts. Thus, if the tenant requested them to contact the owner and they passed this on, if they got the business, all the better for them. But otherwise they have no *entitlement* to it. As to the exact legalities of this I have no idea. Can anybody add any comments on this? I had honestly not even considered that I was under any obligation to do anything. Hence why I was surprised.
After talking to them I got legal advice. The Lawyer told me that I "was not to pay them a single cent under any circumstances" and pointed to item 55 in the Property, Stock and Business Agents Act 2002. I was already reasonably clear that I had no legal obligation to pay them and to the agents credit he had told me that they likely have no legal way to extract the money from me.
So the final and most important question is this. Morally, how much should I pay these guys? I like the guys, and do I feel for their waisted effort. I don't want to feel that I am ripping them off, and I certainly don't want to feel ripped off my self. Approximately what portion of the effort or cost of a sale did they put in? If I can come up with some 'non-emotional' figure, that would make me happy and make it easier to present to them. Here is approximately what they did:
Tenants contacted them, they contacted me, I said had to think about it.
They mentioned a ball park range, ie 'under 300,000'. (I later got two valuations (that I paid for) one at 270,000 and one at 245,000).
They called me again, I had not had a chance to think about it properly, and said that I still had to think about it.
They never called me again (I think the specific agent had gone on holiday).
They drove the tenants around to look at other similar properties.
They had no advertising costs, no legal costs or major paper work, did not take any photos and they did not utilise their database of clients to find other interested clients that may have driven the price up.
So considering that their full price commission would have been $10,920, what approximate portion of that value did they actually do?
Cheers! -alex