Tenants want to buy property

[outbackjack]

Hi all,

A few months back I asked the real estate agent who manages my property to do a valuation. I was aware that the tenants wanted to buy the property and was just checking on price.
The tenant told the agent he was intrested. I was already aware of this. The agent valued the place at 265K. I told the agent thanks, however I am going to hold on to it.
The agent then proceeded to show the tenants other properties etc. However the tenant are set on the place I own. They finally moved up to 297k. I told the agent I would accept if they would do the commission for 5k. They went on to say how hard it was to get the sale, that they spent a lot of time showing the tenants other properties. That the place was not worth etc.
The agent rings me back and the tells me that they will do the commision for 7k. Although I still wasnt happy, I accepted. I then go to sign everything and the commission is 7800, I was told that the 7K was ex GST, because I can claim the GST.
Anyway, am I being to unfair? The agent had the sale giving to them on a plate. I think 7k is a lot of money for little effort.

Can I approach the tenants myself? Is this legal?

OK thanks. Rant over.

 

[boomtown]

........

Have you actually signed an agency agreement with the REA?

If so, doesn't mean you can't try to renegotiate but yeah

 

[troyhunt]

I then go to sign everything and the commission is 7800, I was told that the 7K was ex GST, because I can claim the GST.
Anyway, am I being to unfair?

I seem to recall there is a legal obligation to quote all prices inclusive of GST or at least disclose the GST on top of the represented price. You might want to check that.

You also might want to check your ability to deduct the GST depending on the entity holding the property.

Finally, how does $7k + GST = $7.8k? Something wrong there.

Sounds like the agent has the deal in the bag and doesn't need to commit much further effort to it. I'd stand my ground.

 

[Collector]

Don't know about your situation and the commission + gst etc.


I don't know why you did not sell it privately to the tenant. Unless you had the property for sale and you and the agent had an Agency Agreement - contract there was no need to pay the agent anything.

The agent was only entitled to a fee after you had an agreement and managed to find a buyer.

I refer to a court case between a vendor and L J Hooker at Carlingford - Makes interesting reading:

http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/nsw/NSWCTTT/2004/151.html?query=formosa%20and%20realty%20and%20pty%20and%20ltd

 

[INVSTOR]

You can buy a form to sell from some post offices and have your solicitor/conveyancor help fill it out.

 

[Jodie701]

When we went to sell our house. The agent wanted $10k regardless how long it would take to sell. The house actually sold the day after the sign went up on the front. It wasn't even advertised anywhere. Easy $10k I recon, but a sale is a sale and I was happy that it happened quickly.

 

[oracle]

How about firing the property manager advising him you intend to self manage. Once he is out you can privately sell it to the tenant. No commissions.

Don't know the legalities but I reckon if the property manager lied to you about the fees you should teach him/her a lesson by firing him as the property manager. That will teach him/her a lesson to be more truthful and ethical next time he deals with anyone.

Cheers,
Oracle.

 

[outbackjack]

I havent signed any forms yet in regard to the sale.

However I was aware of the tenant wanting to buy. I went with the PM real estate for a value as it was easier to get access etc.

The commission was as follows

"My principle mentioned he would give you a discount of 10%, which was not on the 22a sorry, and the commission on the 22a was for a $290,000.00 sale.
The commission on $297,000. is naturally higher than $290,000. it would work out to be $7,875.00 less 10% $7,087.50 plus G.S.T $7,789.25. There for we will make a further discount then the commission would be $7,000.00, with gst it would be $7,700.00 and you can claim the g.s.t.
part. Ok.
You can change the amounts where the commission is and initial any changes you make.
I will send the contract to you once I receive the 22a."

I think its a bit rude to ask for 7k for deal that no works was really required, they have been the PM for a few years.

Maybe I am being to greedy?

 

[Collector]

I havent signed any forms yet in regard to the sale.

However I was aware of the tenant wanting to buy. I went with the PM real estate for a value as it was easier to get access etc.

The commission was as follows

"My principle mentioned he would give you a discount of 10%, which was not on the 22a sorry, and the commission on the 22a was for a $290,000.00 sale.
The commission on $297,000. is naturally higher than $290,000. it would work out to be $7,875.00 less 10% $7,087.50 plus G.S.T $7,789.25. There for we will make a further discount then the commission would be $7,000.00, with gst it would be $7,700.00 and you can claim the g.s.t.
part. Ok.
You can change the amounts where the commission is and initial any changes you make.
I will send the contract to you once I receive the 22a."

I think its a bit rude to ask for 7k for deal that no works was really required, they have been the PM for a few years.

Maybe I am being to greedy?

I would be checking with fair trading in your state...



In NSW it is illegal for an agent to act for you with out an agreement.

I would use this as a bargining tool - tell the agent that you only wish to pay $7,000 as agreed on a take it or leave it basis


The agent did not introduce a buyer to the property, he introduced a tenant, the tenant then wanted to buy the property - tell the agent such - also talk to your solicitor.

 

[eternit]

The agent did not introduce a buyer to the property, he introduced a tenant, the tenant then wanted to buy the property - tell the agent such - also talk to your solicitor.

You must have already paid a letting fee being first weeks rent + gst so I if it was me then I would not give them anything.....

 

[Collector]

You must have already paid a letting fee being first weeks rent + gst so I if it was me then I would not give them anything.....

Depends on the law in your state, i can only advice on NSW, read the link provided in my previous post, L J Hooker Carlingford wanted to sue the owner for commission because the tenant that they located and was living in the property for a period of time ended up buying the property directly - please read it.

Talk to your solicitor and Office Of Fair Trading they will give you more acurate advice.

It is my OPINION that you do not have to pay the agent anything - But i would be doing the right thing and paying him the amount you agreed to; ie. $7000 - not a penny more

 

[eternit]

But i would be doing the right thing and paying him the amount you agreed to; ie. $7000 - not a penny more

I wouldn't and the reason being if they have tried to get $7.8K out of the OP when they agreed on $7K then I would give them some of there own medicine and not give them anything at all.

 

[outbackjack]

Thanks for your comments.

They have sent me the form 22a. They did state that it was illegal to act on my behalf before it was signed. I asked them to send both the 22a and the contract. However they wont send contract until to 22a is signed.
I also offered them 5k. My thoughts it was money for jam, they where giving the sale on a plate. I thought 5k was fair for them to sign it up etc etc.

Sorry to any RE estates here, but I think 7800 is a lot of money for which probaly adds up to no more than 3 or 4 days?

 

[boomtown]

Is the 22a the agency agreement? And you havent signed it?

LOL. Go hire a conveyancing solicitor (you are going to need one anyway). I bet the conveyacing solicitor will tell you that you can pay ZERO commission. Just deal with tenants directly. Dont sign the 22A !!! You dont need an REA if you have already found a buyer. They skanked themselves by being greedy and causing you to question it on this forum.

Get professional advice first though.

 

[Collector]

Is the 22a the agency agreement? And you havent signed it?

LOL. Go hire a conveyancing solicitor (you are going to need one anyway). I bet the conveyacing solicitor will tell you that you can pay ZERO commission. Just deal with tenants directly. Dont sign the 22A !!! You dont need an REA if you have already found a buyer. They skanked themselves by being greedy and causing you to question it on this forum.

Get professional advice first though.

Spot on!!

You don't need an agent if you have aready got the buyer - get your solicitor/conveyancer to draw up the contract and leave the agent out of it.


[/QUOTE]Sorry to any RE estates here, but I think 7800 is a lot of money for which probaly adds up to no more than 3 or 4 days? [/QUOTE]

Im an agent - no need to be sorry, as you said this agent is being greedy, you had an agreement and they then wanted to push for more, i said to do the right thing and pay them the $7000 because you seemed ok with that but if i were in your shoes i would not like to pay them one penny

 

[sparky23]

Yes I would also agree that if you have signed nothing with the agent you have no obligation to him but you can clear things up easily enough if you speak to your solicitor, I would also have no more dealings with the agent from here on in and do anything that needs doing with your solicitor.

 

[tubs]

I can't understand why people are suggesting you pay $7,000 - as if its not a lot of money.

Lets not be too flippant over...
7
THOUSAND
dollars. That's a LOT of money.

And anyway, why would you consider paying somebody so much money for doing something that you never asked them to do in the first place!!!

I'd sell the house through a solicitor (NOT A CONVEYANCOR) because they can deal with any legal crap from the agent. Do not communicate with the agent any more. Do not accept any forms or documents from them. If they ask you what's going on, tell them you're checking a few things but dont be drawn on what they are.

 

[BayView]

There is no Sale Authority with the agent to sell. They cannot sell without a signed Authority from you.

All they have done is make you aware of the offer by the tenant.

You have no obligation whatsoever to the agent, but if you feel as though you owe them something for bringing it to your attention, offer them whatever you feel is fair.

$1,000?

 

[Collector]

I can't understand why people are suggesting you pay $7,000 - as if its not a lot of money.

Lets not be too flippant over...
7
THOUSAND
dollars. That's a LOT of money.

And anyway, why would you consider paying somebody so much money for doing something that you never asked them to do in the first place!!!

I'd sell the house through a solicitor (NOT A CONVEYANCOR) because they can deal with any legal crap from the agent. Do not communicate with the agent any more. Do not accept any forms or documents from them. If they ask you what's going on, tell them you're checking a few things but dont be drawn on what they are.

I believe you are refering to me...

You would be better off reading all my posts in this thead - not just yhe one that said to pay the amount that he agreed to pay...

go back and read the whole thing

 

[csc]

If no agreement has been signed with the agent its a very simple answer.........FLICK the agent and sell direct to the renter wanting to buy..........

I have no time for agents that wont be reasonable and flexible...

Your not obligated legally to sell through him if you havent signed anything anyway........

unnecessary evil, agents are anyway, vultures that cant lay straight in bed any of them...........

Never trust any agent cause at the end of the day good $$$ are involved and all they want is comissions anyway.....its the only thing that drives any of them.