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Estate Agent's out of pocket expenses?
21 Answers
After 14 months with very little interest in my house, I decided to change estate agents. I know it is a difficult time for selling houses, but I am unhappy with the service the estate agents have given.
Before making a decision to try another agent, I asked how much I would be charged for withdrawal, and was told "roughly £350". To be fair, this was from a staff member who is not full-time and only covers when needed, and she did say that it wasn't an exact figure.
The bill arrived for £563. On it there is an item listed as "out-of-pocket expenses - £250". There are also charges for internet, brochures and advertising, all listed separately and in addition to the £250 OOP expenses.
In the small print it states that I agree to pay charges incurred, plus £250 out-of-pocket expenses, if I cancel the contract. What I am wondering is, do I have to pay the £250 without question because I signed the contract, or am I entitled to a breakdown of the £250 charge?
And also, would I have a case for offering to pay this at £100 per month, rather than pay the whole bill in one go? The small print does say the account should be settled within 14 days of the date of the invoice, but it is quite a bit higher than anticipated.
Thanks very much for any help/advice.
Before making a decision to try another agent, I asked how much I would be charged for withdrawal, and was told "roughly £350". To be fair, this was from a staff member who is not full-time and only covers when needed, and she did say that it wasn't an exact figure.
The bill arrived for £563. On it there is an item listed as "out-of-pocket expenses - £250". There are also charges for internet, brochures and advertising, all listed separately and in addition to the £250 OOP expenses.
In the small print it states that I agree to pay charges incurred, plus £250 out-of-pocket expenses, if I cancel the contract. What I am wondering is, do I have to pay the £250 without question because I signed the contract, or am I entitled to a breakdown of the £250 charge?
And also, would I have a case for offering to pay this at £100 per month, rather than pay the whole bill in one go? The small print does say the account should be settled within 14 days of the date of the invoice, but it is quite a bit higher than anticipated.
Thanks very much for any help/advice.
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Thanks redcrx. We bought the HIPS separately. The estate agent did offer to appoint a company to provide it, but we looked on the internet and found that we could book them directly, at a much better price.
If we've incurred £250 worth of out-of-pocket expenses, then we will shut up and pay up, but it just sounds rather high to me. I know they would have to pay the person who comes to put a For Sale board up, and administration costs for the office making viewing arrangements/answering enquiries. I wonder what else the charge would cover though.
If we've incurred £250 worth of out-of-pocket expenses, then we will shut up and pay up, but it just sounds rather high to me. I know they would have to pay the person who comes to put a For Sale board up, and administration costs for the office making viewing arrangements/answering enquiries. I wonder what else the charge would cover though.
http://www.reallymoving.com/property-advice-page/113/Iandrsquo;m-not-satisfied-with-the-work-my-current-e.aspx
good advice here about previous viewers etc too http://forums.moneysavingexpert.com/showthread.html?t=911795
good advice here about previous viewers etc too http://forums.moneysavingexpert.com/showthread.html?t=911795
but they take those charges and absorb them, usually making their money from the fee for sale.
You really need to find out what they are claiming, most companies would only tie you into the contract for a short period 2-3 months. if youd pulled out in that time then it would be fair to say you'd oew the money
You really need to find out what they are claiming, most companies would only tie you into the contract for a short period 2-3 months. if youd pulled out in that time then it would be fair to say you'd oew the money
The house has been on the market since July 2008. We have had four viewings. One of the four viewers told me they had tried many times to get hold of the estate agent, without success, and asked for my contact details so that they would not have to try to get hold of the agent in the future. Another of the viewers advised that we should think about changing agents, as this particular one "was never open".
Part of the problem is that, due to the slow market, the EA has cut the opening hours. People wanting to call in and pick up a brochure find it closed. It only opens for about half a week. We ourselves have called round to have a talk with them but found the premises closed. When the office is closed, they can switch their telephone calls through to another town, but that's not the same as being able to speak to someone in the area.
I feel that we haven't been given much service for our money, to be honest, but I'm not an unreasonable person and if we have caused them £563 worth of costs, then fair enough. I would like to hear another estate agent's view if possible though. I'm obviously looking at it from a different perspective than an agent.
Part of the problem is that, due to the slow market, the EA has cut the opening hours. People wanting to call in and pick up a brochure find it closed. It only opens for about half a week. We ourselves have called round to have a talk with them but found the premises closed. When the office is closed, they can switch their telephone calls through to another town, but that's not the same as being able to speak to someone in the area.
I feel that we haven't been given much service for our money, to be honest, but I'm not an unreasonable person and if we have caused them £563 worth of costs, then fair enough. I would like to hear another estate agent's view if possible though. I'm obviously looking at it from a different perspective than an agent.
What does your contract say? - does it bind you to pay if you withdraw? That's really unusual and unnecessary. Most contracts bind in a no-sale-no-fee basis provided you give them a minimum number of weeks - perhaps 8.
If you signed something which commits you to paying OOP expenses, of course you are entitled to request a full breakdown. Ask for their receipts for every one. OOP implies what it says - expenses unrelated to running the office for which they ought to have had receipts from whoever incurred the expense. That should stump them. Then they might withdraw that element.
If you signed something which commits you to paying OOP expenses, of course you are entitled to request a full breakdown. Ask for their receipts for every one. OOP implies what it says - expenses unrelated to running the office for which they ought to have had receipts from whoever incurred the expense. That should stump them. Then they might withdraw that element.
If you mean 'give them no time in which to rummage around and find the receipts, no, I don't reckon that's fair.
OOP expenses is a bit of an unusual thing when employing a service business. They could interpret it to mean anything. Equally so could you. If you employ an individual (such as a surveyor) OOP typically means persoanl expenses directly associated with delivering the servic - mileage, receipted sandwich for lunch perhaps. It is not photocopying, costs they have incurred in procuring services from other organisations such as board erector companies. IMHO.
OOP expenses is a bit of an unusual thing when employing a service business. They could interpret it to mean anything. Equally so could you. If you employ an individual (such as a surveyor) OOP typically means persoanl expenses directly associated with delivering the servic - mileage, receipted sandwich for lunch perhaps. It is not photocopying, costs they have incurred in procuring services from other organisations such as board erector companies. IMHO.
Requesting a breakdown of costs seems a reasonable request.
In contracts, there are 2 types of damages- either penalty clauses, or liquidated damages. Liquidated damages are a 'genuine estimation at the loss of one party'. These clauses, which are generally calculated on a case by case basis, rather than imposing a set amount, are enforceable in contracts. In some cases though, there are easily quantifiable amounts that can be preset. For example, a mobile phone company would know that if you cancel your £20, 12 month contract after 6 months, liquidated damages would be £120 (the remaining 6 months x £20).
The other type of damages, penalty clauses, are not enforceable in contracts. This is the crux of the major bank charges case that's in the High Court as we speak. If the banks cannot prove that their standard £30 fee for being overdrawn is a genuine assessment of loss (rather than an arbitrary amount), then they cannot enforce them and many people will be claiming refunds. Also, you'll notice that newer signs warning about clamping charges include a breakdown of costs (clamping, towing and storage etc.), rather than a (seemingly random) lump sum. This is to make their charges more likely reasonable and thus enforceable.
I say this as it may be that the £250 is a penalty clause that is unenforceable. However, the estate agents may know from experience that they incur this amount, so it could go either way. Without seeing the contract and a breakdown of figures, it's impossible to say. Buy if I were you, I'd ask for the itemised invoice, and then take it from there.
In contracts, there are 2 types of damages- either penalty clauses, or liquidated damages. Liquidated damages are a 'genuine estimation at the loss of one party'. These clauses, which are generally calculated on a case by case basis, rather than imposing a set amount, are enforceable in contracts. In some cases though, there are easily quantifiable amounts that can be preset. For example, a mobile phone company would know that if you cancel your £20, 12 month contract after 6 months, liquidated damages would be £120 (the remaining 6 months x £20).
The other type of damages, penalty clauses, are not enforceable in contracts. This is the crux of the major bank charges case that's in the High Court as we speak. If the banks cannot prove that their standard £30 fee for being overdrawn is a genuine assessment of loss (rather than an arbitrary amount), then they cannot enforce them and many people will be claiming refunds. Also, you'll notice that newer signs warning about clamping charges include a breakdown of costs (clamping, towing and storage etc.), rather than a (seemingly random) lump sum. This is to make their charges more likely reasonable and thus enforceable.
I say this as it may be that the £250 is a penalty clause that is unenforceable. However, the estate agents may know from experience that they incur this amount, so it could go either way. Without seeing the contract and a breakdown of figures, it's impossible to say. Buy if I were you, I'd ask for the itemised invoice, and then take it from there.
Thanks very much for replies. Here is how it is worded on the contract:
"Withdrawal from Agency - Properties may be withdrawn from our agency at the end of the Sole Agency period or thereafter, by either party by giving 14 days notice in writing at any time from the end of the 8th week. Advertising that has been pre-booked will still be charged for, even if it takes place after the notice has been given to terminate the agency.
If giving notice to withdraw from this agency agreement, unless we are in breach of our obligations to you, we will expect our advertising and brochure account, together with any other chargeable expenses plus £250 out of pocket expenses to be paid within 14 days of the production of our account".
They have listed costs for the advertising (£90) and brochures (£50) but have not given any indication of what the £250 has been spent on, so I will definitely ring them up and ask about this.
Thanks again.
"Withdrawal from Agency - Properties may be withdrawn from our agency at the end of the Sole Agency period or thereafter, by either party by giving 14 days notice in writing at any time from the end of the 8th week. Advertising that has been pre-booked will still be charged for, even if it takes place after the notice has been given to terminate the agency.
If giving notice to withdraw from this agency agreement, unless we are in breach of our obligations to you, we will expect our advertising and brochure account, together with any other chargeable expenses plus £250 out of pocket expenses to be paid within 14 days of the production of our account".
They have listed costs for the advertising (£90) and brochures (£50) but have not given any indication of what the £250 has been spent on, so I will definitely ring them up and ask about this.
Thanks again.
Sorry red, I'm not sure what you mean.
They have already paid for 2 adverts in the local paper at a cost of £45 per ad, and they have had 50 brochures printed at a cost of £50. These are costs that they have already incurred so I don't have any objection to paying for them.
They've got lots of spare brochures of my property, but of course they will be no good to them now that I have pulled out, and they will have to be scrapped. They told me they usually print 200, so I suppose I am lucky that they didn't (I would have had a brochure bill for £200 in that case).
I have given them the required 14 days notice. By this time the property would have been on the market with them for nearly 15 months.
They have already paid for 2 adverts in the local paper at a cost of £45 per ad, and they have had 50 brochures printed at a cost of £50. These are costs that they have already incurred so I don't have any objection to paying for them.
They've got lots of spare brochures of my property, but of course they will be no good to them now that I have pulled out, and they will have to be scrapped. They told me they usually print 200, so I suppose I am lucky that they didn't (I would have had a brochure bill for £200 in that case).
I have given them the required 14 days notice. By this time the property would have been on the market with them for nearly 15 months.
youire kidding? they have 200 brochures purely on your property? Most EAs will print individual details as and when requested. what if it had sold from the firast brochure given out? would they have charged you for them all?
What i was trying to say was ask when the brochures are being sent out and when the advert is going in the press and then say from 7 days after that date you are dispensing of their services. If they sell it from those brochures then sobeit, if not then they made the decision to advertise and it didnt work. tell them not to book any more ad space
What i was trying to say was ask when the brochures are being sent out and when the advert is going in the press and then say from 7 days after that date you are dispensing of their services. If they sell it from those brochures then sobeit, if not then they made the decision to advertise and it didnt work. tell them not to book any more ad space
No red, they only had 50 brochures printed, but said that it usually takes around 200 brochures for a property to sell. They get 50 printed, then when they are getting low, get another 50 printed, and so on. This did sound rather a lot to me but I now realise they are a very small agent.
I imagine a bigger agent would not need to send brochures off for printing, they would have their own printer.
I imagine a bigger agent would not need to send brochures off for printing, they would have their own printer.
I would have no qualms at all about paying for the services rendered- that would be the advertising and brochure account(s), plus "any other chargeable expenses". Those would be the liquidated damages, given that the estate agents have seemingly not set a fixed lump sum, so that the amount to be paid is fair and reasonable in each case. This of course presumes that the chargeable expenses are reasonable.
It does seem to me that the £250 is an arbitrary amount. There can be no way that the agents would know in advance what the expenses incurred will be or what the value will be. In that way, I just can't see how it's a genuine estimate of their losses, especially not without itemisation of the bill. I'd say it's more a penalty clause- if I were in your position, it would stick in my throat if I paid it. Until they breakdown the bill, offer payment minus the £250, with commensurate and reasonable expenses to follow.
There's no obligation on the agents to accept your offer of £100 p/m, but something is better than nothing! There's no harm in asking.
It does seem to me that the £250 is an arbitrary amount. There can be no way that the agents would know in advance what the expenses incurred will be or what the value will be. In that way, I just can't see how it's a genuine estimate of their losses, especially not without itemisation of the bill. I'd say it's more a penalty clause- if I were in your position, it would stick in my throat if I paid it. Until they breakdown the bill, offer payment minus the £250, with commensurate and reasonable expenses to follow.
There's no obligation on the agents to accept your offer of £100 p/m, but something is better than nothing! There's no harm in asking.
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