When Using Multiple Estate Agents – Who Gets Your Commission?

Dealing with one estate agent seems frightful enough, but dealing with multiple… not for the faint hearted.

When you’re using multiple high-street estate agents to sell your property, it’s relatively straight forward. Generally speaking, you need to do the following:

  • Inform all agents involved that you’re using multiple agents.
  • Sign a ‘multiple agency’ agreement, as opposed to a ‘sole agency’ – this typically affects the commission rates i.e. you’ll pay a higher fee to go multi-agency, usually between 2% – 3.5
  • Commission goes to the agent that makes the sale.

May the best chump win, right?

However, what happens in the unlikely event that both agents end up showing the same prospective buyers around, who then end up making a purchase? Who gets the commission? The agent that introduced the buyers to the property, or the agent that sealed the deal.. or both?

Of course, it should come to no surprise that Foxtons take a lead role in this pantomime. I mean, how could they not?

Using another estate when the first failed to sell, sell, sell!

So, let me set the scene…

A Mrs Bicknall had a rather expensive house that she wanted to flog, which in hand came with a rather attractive commission tag to the agency that got the sale. Needless to say, eyecandy to any respectable agent.

Her initial plan was to prosper through the competence of Foxtons sales team. But when they failed to sell, sell, sell with in Mrs Bicknell’s idealistic timescale, so she then decided to appoint Hamptons Estate Agents to join the rat chase. To make the situation legit, she had to change Foxtons agreement from sole agency to multiple agencies.

During the time Foxtons were sole agents, they had shown the property to a Mr and Mrs Low. However, unfortunately for Mrs Bicknall, the Lows’ hadn’t shown enough interest to make an offer.

When the second agent gets the sale…

I don’t know how or why this occurred, but the Lows’ also viewed the same property again under Hamptons supervision. Perhaps Foxtons repulsed the Lows’. I wouldn’t be entirely surprised.

So then, through a dramatic turn in events, the Lows’ decided to make an offer and exchange contracts after viewing the property with Hamptons, meaning they snatched the handsome commission from Foxtons.

Foxtons had heard of the sale, and insisted that they were entitled to the commission because they initially introduced the Low’s to the property. To emphasise their point, Foxtons pointed to a clause in their contract that stated that Mrs Bicknell would be held liable if she sold the house to “a purchaser introduced by them”

Essentially, this meant that the vendor was potentially liable for paying double commission! OUCH!

Foxtons being Foxtons stuck to their words whole heartedly, and proceeded to take poor Mrs Bicknell to court.

Well, you didn’t really expect Foxtons to let a buck or two slide by, did you?

In great disappointment, Foxtons won their case.

Understandably, Mrs Bicknell was not satisfied with the result, so she decided to appeal.

To Mrs Bicknell’s joy, the decision was eventually overturned. The appeal judge based his decision on the definition of “purchaser”

A “purchaser” is only a purchaser when he decides to purchase.

When Foxtons introduced the Lows, they weren’t purchasers. They became purchasers afterwards, when Hamptons had also put up a sales pitch, and pushed through the sale.

That makes sense to me. What do you think?

I mean, if I had taken a liking to a shirt in store A, but decided to buy it from store B because their shop looked cleaner, then surely store B made the sale. Right? Right.

This seems like a classic case of, “Let’s sue people over dumb shit, just like the Americans do”

Foxtons Mini

Rather interesting story.

I’d be curious to know why exactly the Lows’ didn’t bite the bate when Foxtons had shown them the property, or why they insisted on seeing the same property through another agent.

Either way, the point is, Hamptons pushed through the sale and the Lows’ agreed to buy through them. Perhaps the agent handling the case at Foxtons put up a lousy sales pitch, or perhaps his general snake-oil swagger combined with the notorious go-karts they zip around in was all too overbearing, hence the betrayal.

Final Conclusion / Key takeaway

I’m not sure how often this scenario occurs. My gut tells me rarely, but I wouldn’t be surprised if it happens more often.

Either way, I’m not sure if this case has set a legal president, but I’m going to assume it has and it is, so that means that when using multiple agents, the agent that pushes the sale creates the “purchaser” – a “purchaser” is only a purchaser when he decides to purchase, not before.

What are your thoughts?

1 Comments- Join The Conversation...

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Linda 17th December, 2013 @ 13:54

I used this agency for my current flat. Although I was reluctant to work with them, as they didn’t really listen to my needs, I let their letting agent, Davis Martens; convince me to show me some properties. As expected, he showed me properties I wouldn’t like, but the last one seemed to be perfect, as it was newly refurbished, and Foxtons was the agency that sold the flat to my landlord. I trusted it, and let Foxtons rent the flat to me, and pressured me to come up with almost £5000 in 2 days.

As a foreigner from the Netherlands, where apartments, especially in the high end ranges, are built according to safety measures and high standards, I didn’t know I had to check this with Foxtons before signing the rental agreement.

When I moved in I didn’t have lights and heating for two weeks, there were leakages, furnitures hadn't arrived (took 3 weeks), the flat wasn't cleaned (took more than a month), smoke came out of the oven etc. When the specialist electrician came, he found out that the Electricity was wired wrongly, and that it had burned through. If it had gone further, it would have caused fire. Furthermore, until now (two months down the road), I’m Lucky if I get water to shower, and even more lucky if it’s hot water; when I told the landlord about this, he said that the water has difficulty getting up to the third floor, and that the pipes are old (obviously my jaws were on the floor the moment he mentioned this. To make things worse, he said London is an old city. I mean come on; in 2013, water can’t get into a three floor story building? Amsterdam is an old city too, but we don’t have the issues you have in London). Next to that, when I turn the dishwasher or washing machine on, the place fills up with smoke and the smell of burnt rubber, and other issues such as the fact that the windows can’t open because they have been painted shut and the cords to open them, are missing (totally forgotten by the specialist that built it).

When I told all of this to Foxtons, their only response was that they don’t manage the flat, and that I should deal with it with the landlord. And, this is the agency I paid almost £400 for the one minute they showed me this flat, their horrible service; the landlord had to pay them two months’ rent to find a tenant for him and draft up this agreement that I could have done myself. And, they sold this property to the landlord, which has unverified safety certificates as it turns out now. I wouldn’t be surprised if the gas blows up the building one day.

I’m still waiting for the landlord to fix everything before these two months are over. As the landlord is oblivious and never checked the flat before I moved in (he literally bought it two weeks before I moved in), I'm convinced that Foxtons was aware of the issues. Obviously I would never recommend FOXTONS to anyone.


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