Tenants want to buy property
- Thread starter outbackjack
- Start date
As i said read the whole thing and don't take what i wrote out of content.
outbackjack said that he had agreed to pay $7000. The agent in his wisdom then did some fancy calculation and the $7000 turned into $7,789.25.
This was what I wrote in full:
10-02-2009, 08:27 AM
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/si...ty and ltd
10-02-2009, 04:16 PM
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.
10-02-2009, 04:37 PM
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
10-02-2009, 07:46 PM
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.
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
Now lets look at the original post:
10-02-2009, 07:23 AM "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.
Outbackjack was willing to do the deal for $7000, when it was time to do the paper work this price changed. I said that if he should pay the $7000 as it was agreed, I also said It is my OPINION that you do not have to pay the agent anything and that if i were in your shoes i would not like to pay them one penny.
You sure the tenant isn't pulling your chain to sway you from putting up rent ?
Update
Hi All,
Sales agent rang me today. She asked why I had not sent any thing back to her. She was refering to the 22a form. Which is the agreement for the agent to sell the property on my behalf.
I told her that my offer was for 7k and that they then wanted that plus GST. She explained that I would get the GST back etc etc. I told her I would agree to the 7k, but I felt they where being a bit too greedy given the situation of not actually have to do any work. She then got quite irrate, stating she would have to ring the tenant and tell them I wasnt selling. That they would have to stop doing the repairs they where doing etc etc. I told her that I had not authorised any repairs. If anything was not tradesman like then they would have to make good.
Anyway after getting off the phone and hunting around for tenants number, name etc I rang them.
They told me that agent rang them a few days ago stating that they had to offer 310K. They also told me that agent asked them to sign a contract about 3 months ago when things started. I asked him if he was real with his offer. He stated he was, that it would be 30 day settlement, with 14 days to get finance and have pest inspections etc done? They live in the place, so if there was any major pest problems they would know.
So I am going to think it over for the next few days. I dont believe I can get in trouble with the agent, they didnt have a signed agreement with me. They went to the tenants work for them to get a signed contract etc.
Silly them have now lost 5k to 7k.
Cheers
Hi All,
Sales agent rang me today. She asked why I had not sent any thing back to her. She was refering to the 22a form. Which is the agreement for the agent to sell the property on my behalf.
I told her that my offer was for 7k and that they then wanted that plus GST. She explained that I would get the GST back etc etc. I told her I would agree to the 7k, but I felt they where being a bit too greedy given the situation of not actually have to do any work. She then got quite irrate, stating she would have to ring the tenant and tell them I wasnt selling. That they would have to stop doing the repairs they where doing etc etc. I told her that I had not authorised any repairs. If anything was not tradesman like then they would have to make good.
Anyway after getting off the phone and hunting around for tenants number, name etc I rang them.
They told me that agent rang them a few days ago stating that they had to offer 310K. They also told me that agent asked them to sign a contract about 3 months ago when things started. I asked him if he was real with his offer. He stated he was, that it would be 30 day settlement, with 14 days to get finance and have pest inspections etc done? They live in the place, so if there was any major pest problems they would know.
So I am going to think it over for the next few days. I dont believe I can get in trouble with the agent, they didnt have a signed agreement with me. They went to the tenants work for them to get a signed contract etc.
Silly them have now lost 5k to 7k.
Cheers
I am may be a tad greedy too.
I have just looked at properties in the same are. I am wanting 295k. A house on the same street is on the market for 275k. However it doesnt have a double bay shed or pool. Also my place has two undercover garages. Mine has about 200sqm more land. Apart from that the houses are indentical layouts etc. They where built by same builder and sold around the same time.
So if I do sell it the tenants, they might not get finance if the valuer thinks its over priced.
So bit of a risk if they dont get their finance, then look elsewhere etc.
Any one know of a good conveyancer down Beenleigh way?
I have just looked at properties in the same are. I am wanting 295k. A house on the same street is on the market for 275k. However it doesnt have a double bay shed or pool. Also my place has two undercover garages. Mine has about 200sqm more land. Apart from that the houses are indentical layouts etc. They where built by same builder and sold around the same time.
So if I do sell it the tenants, they might not get finance if the valuer thinks its over priced.
So bit of a risk if they dont get their finance, then look elsewhere etc.
Any one know of a good conveyancer down Beenleigh way?
I used Conveyancing Works for purchasing and thought their services were fantastic. They were really helpful with questions. The real estate agent was pressuring me to settle sooner and put down a bigger deposit and sign changes on the contract but they sorted it all out for me. I would run through your situation with them that your selling privately and get a quote. My friend who is a solicitor in Bris put me onto them as they are a lot cheaper than solicitors.
Your price seems reasonable, and if someone is willing to pay it then I'd go for it.
Your price seems reasonable, and if someone is willing to pay it then I'd go for it.
You can always leave the top up in the deal on a vendor finance basis and get a 2nd mortgage to cover it.
Cheers
That's classic asdf......if you sprinkled that with a few choice swear qords, that could have easily have come out of my lawyer's mouth.
Hey this is interesting. Is there any chance your tenant works in a tyre fitting place in Beenleigh as I was having my tyre changed recently and this situation sounds remarkably like the property he was taking about buying but said the RE wasn't telling him what was going on and that he was going to try and find out who the owner was!!
PS the property was at Eagleby
So how did this turn out?
Good agents are worth the money but these people were just trying to rip you off, I wouldn't pay them a cent as in this case they really aren't doing a damn thing to earn the money.
When you sign an agreement for an agent to sell your property you are legally entitled to pay the agent fees if they introduce the buyer to you. The agent can even claim the fee if you sell after the agreement period is over.
I'm not sure about your situation though and that link that was previously posted is coming up with a 404 but you should definately get some quick legal advice if you haven't already sorted this out.
Good agents are worth the money but these people were just trying to rip you off, I wouldn't pay them a cent as in this case they really aren't doing a damn thing to earn the money.
When you sign an agreement for an agent to sell your property you are legally entitled to pay the agent fees if they introduce the buyer to you. The agent can even claim the fee if you sell after the agreement period is over.
I'm not sure about your situation though and that link that was previously posted is coming up with a 404 but you should definately get some quick legal advice if you haven't already sorted this out.
This is not nessasary the case ANYMORE, sure on most if not all NSW sales agency agreement there is a clause which state what you are saying; however there has been court cases and precidents that have been about this very thing.
The agent may no longer be entitled to the commission if a person that has been introduced to the property later buys the property directly from the owner or the newly appointed agent. What the agent will need to prove to the court is that he/she has effected the sale.
From REINSW website:
The general principle is that you must be involved in getting the deal over the line in order to be entitled to a commission.
Torquil Murray from TressCox Lawyers provides a practical guide to what constitutes an effective cause of sale.
What happens in a situation where a purchaser is introduced to a vendor by an agent but the contract is not completed, only to have the same vendor sell the same property to the same purchaser through a new agent?
Unless you are the effective cause of sale, you’re not entitled to commission.
This basically means that you must be involved in actually getting the deal over the line to receive the commission.
Let’s examine the current legal environment by taking a few simple, yet common, hypothetical examples.
Scenario one:
First agent enters into an exclusive agency agreement with the vendor. First agent introduces eventual purchaser to the property.
Vendor changes agent.
Second agent sells property to original purchaser. Is the first agent entitled to a commission?
For example
In March 2006 Richards Realty was engaged by Ms Moore to sell her property. An exclusive agency agreement was entered into between Richards Realty and Ms Moore.
In June 2006, Richards Realty introduced the purchaser Mr White to the property during an open house.
Ms Moore subsequently engaged Carlos Real Estate Pty Ltd to sell the property.
The property was sold to Mr White.
Question
Is Richards Realty entitled to a commission for the sale of the property?
Answer
It depends.
What did Richards Realty do once Ms Moore left and went to the agent down the road?
If Richards Realty played no further part in the sale of the property, according to current case law, it is unlikely that they will be able to claim any commission from the sale.
Simply showing someone to a property does not automatically entitle you to commission if that same person eventually ends up buying the property from another agent.
However, if the first agent continues to have some involvement in the final deal – for example, helping the buyer in negotiations – then they may be able to claim some commission.
It all depends on whether or not the agent has effectively caused the sale, ie whether the agent was involved in the final deal.
Scenario two:
First agent introduces a purchaser to the property. Contract executed but rescinded due to lack of finance.
Vendor engages a second agent who is able to arrange finance for the purchaser. Property sold to the purchaser. Is the first agent entitled to a commission?
For example
Peter White Real Estate (first agent) introduced purchaser Mr Gates to a property and a contract was executed. However, Mr Gates was unable to obtain finance and the contract was rescinded.
Subsequently, Mr Gates signed another contract with Reality Realty, who was able to arrange finance for Mr Gates – finance that he would otherwise have been unable to obtain.
The contract was completed.
Question
Is Peter White Real Estate entitled to a commission for the sale of the property?
Answer
Peter White Real Estate must demonstrate that its involvement was the effective cause of sale to Mr Gates.
The High Court decision of Ramussen and Russo Pty Ltd v Gaviglio [1982] Qld R 571 involved a similar set of facts to those above.
It was decided that there was a complete cessation of the requisite nexus between the first agent’s actions and the sale that eventually took place.
So it is likely on the facts above that Peter White Real Estate would not receive a commission as its involvement was not the effective cause of sale to Mr Gates.
Scenario three:
Agent introduces a purchaser to a property and a contract is drafted. Contract never completed. The vendor and purchaser then enter into a new contract, with no mention of the agent. Is the agent entitled to a commission?
For example
Ray Smith Realty (agent) was engaged by Williams & Co Ltd (vendor) to sell a six hectare block of vacant land.
Ray Smith Realty introduced DCH Developers Pty Ltd (purchaser) to the land. DCH Developers Pty Ltd made an offer, which was accepted by Williams & Co Ltd.
The contract was not completed and there was no commission payable in relation to it.
Some time later, and by way of a new contract, DCH Developers Pty Ltd purchased from Williams & Co Ltd two thirds of the land that was the subject of the first contract.
The new contract made no reference to Ray Smith Realty.
Question
Is Ray Smith Realty entitled to a commission on the sale price under the second contract?
Answer
In order for Ray Smith Realty to be awarded a commission it must demonstrate that the work completed in relation to the first contract was an effective cause of sale.
The facts above mirror those in Moneywood Pty Limited v Salamon Nominees Pty Limited [2001] HCA 2.
The High Court held that the agent’s work in respect of the first contract was not lost once the parties rescinded that contract. What the agent had done in securing the first contract ‘flowed through’ and remained operative upon and influential in the formation of the second contract between the same parties.
So as long as the work done by Ray Smith Realty in securing the first contract flowed through and was influential in DCH Developers Pty Ltd entering into the second contract, Ray Smith Realty will be entitled to a commission.
Not settled yet.
Tenants are real slow in getting things back to me. They have only signed the contract. I should have it next week to sign, I hope.
They have sinced had a property inspection and apprentaly the place is not well presented and was messy etc.
They suggest to kick them out or sell to them.
PETAL. Small world same guy. Funny how he was talking to you about it? Whats your line of business or how did it come up?
Tenants are real slow in getting things back to me. They have only signed the contract. I should have it next week to sign, I hope.
They have sinced had a property inspection and apprentaly the place is not well presented and was messy etc.
They suggest to kick them out or sell to them.
PETAL. Small world same guy. Funny how he was talking to you about it? Whats your line of business or how did it come up?
Hi Outbackjack,
I was talking to this fellow while he was patching a hole in my tyre and the talk turned to property prices in our general area (Beenleigh) and that is when he mentioned to me he wanted to buy the house he was renting, but he was concerned that the RE agent was not passing on his requests to the owner (you) that he wanted to buy.
By the way, I found him a very decent chap, so I am surprised he is mucking around with the contracts as he was very keen to purchase.
Will the agent be getting a commission on this or are you now dealing directly with the owner??
I was talking to this fellow while he was patching a hole in my tyre and the talk turned to property prices in our general area (Beenleigh) and that is when he mentioned to me he wanted to buy the house he was renting, but he was concerned that the RE agent was not passing on his requests to the owner (you) that he wanted to buy.
By the way, I found him a very decent chap, so I am surprised he is mucking around with the contracts as he was very keen to purchase.
Will the agent be getting a commission on this or are you now dealing directly with the owner??
I think he is new to buying a house. His conveyancer is far away. So it has been slow. I hope to get it back to sign this week, as I am away then for 3 weeks.
At this stage the agent will be not getting any commision. I am completing the sale myself.
Once all signed we have to get the bank to agree to the price. Being a private sale the valuer might not agree with value. I am not sure how they work.
At this stage the agent will be not getting any commision. I am completing the sale myself.
Once all signed we have to get the bank to agree to the price. Being a private sale the valuer might not agree with value. I am not sure how they work.
Buy them a bottle of red to drown their sorrows. At least they'll get something out of it. Then do it privately (via solicitor).
BTW maybe something from the middle shelf as you don't want to appear to cheap but not the top shelf as it's not like your 1st born getting married, 1st grand kids or 1st child.
BTW maybe something from the middle shelf as you don't want to appear to cheap but not the top shelf as it's not like your 1st born getting married, 1st grand kids or 1st child.
Interesting thread,
I was considering approaching tenants of mine and asking them to contact me if they ever wished to buy the property. I was under the impression that the PM could claim commission for introducing them to the property despite that it was only for a rental agreement. Sounds like I was totally misguided?
I was considering approaching tenants of mine and asking them to contact me if they ever wished to buy the property. I was under the impression that the PM could claim commission for introducing them to the property despite that it was only for a rental agreement. Sounds like I was totally misguided?
