Do I have to pay the sales commission if I pull out of the sale?

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11 Apr 2015 19:57 by Rosanna Star rating. 1 posts Send private message

I am new to this discussion forum and new to selling a property in Spain.Please can anyone tell me if the Sales Commission Agreement that I have signed with my estate agent when he found me a buyer is legally binding as I have decided that I do not now want to carry on with selling my property as I think the exchange rate has gone against me.I do not want to let the buyer down but cannot afford to lose 15,000 Euros because of the weak Euro.When the agent first valued it and put it on the market the Euro was much stronger.What is my legal position.The buyer deposited 3000 Euros with the esate agent but no contract has been signed yet.

 





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11 Apr 2015 20:07 by scubamike Star rating in Murcia province . 220 posts Send private message

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Depending on the contract wording If the agent has introduced a buyer ready willing and able to enter into a contract the agent has done the job you asked him to do and he is entitled to payment I suggest you take legal advice if he presses for payment preferably with a lawyer not connected to the agent Depending on the commission payable it may be cheaper to continued with the sale even though the currencies have fluctuated 





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12 Apr 2015 00:07 by camposol Star rating in Camposol. 1411 posts Send private message

It is normal for the seller to pay the buyer double the deposit if he pulls out. What is written in your contract?

If the buyer pulls out he loses his deposit

I agree that the exchange rate is a nightmare when selling now, but its going to get worse by the way things are going, so perhaps you have to put up with it.

Sorry, I should have paid more attention about the agents commission.

With our estate agent, the buyer gives them a deposit of 3k euros to show hes serious about buying. If it  goes ahead its deducted from the amount of commission owed by the seller.

If it doesnt go ahead, I think the estate agent just keeps the deposit.

If the buyer gives the seller a deposit, then the situation is as described in the first part of the post.

However procedure varies between estate agents.

 

This message was last edited by camposol on 12/04/2015.


This message was last edited by camposol on 12/04/2015.


This message was last edited by camposol on 12/04/2015.



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12 Apr 2015 08:09 by acer Star rating. 1365 posts Send private message

The sales agreement is most likely to be legally binding, but you must check the exact wording of the agreement.  It probably says that the sales commission is payable if the agent has introduced a buyer who is willing and able to proceed with the purchase at a specific price.  If the purchaser has not offered the full price or cannot get a mortgage you have a let out.

Right now most would be property vendors would love to have a buyer!  You may want to check that you really don't want to sell, rather than wished the deal had worked better for you.





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12 Apr 2015 10:13 by scubamike Star rating in Murcia province . 220 posts Send private message

scubamike´s avatar

We need to know whether the buyer is paying the asking price or the seller has accepted an offer It is unlikely a buyer would be persuaded to pay a deposit unless either of these criteria is met 





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12 Apr 2015 12:00 by windtalker Star rating. 1670 posts Send private message

I don't understand stand how you have come to the conclusion that you are going to pull out of the sale because the pounds euro's rate is not in to  you're liking the pounds to euro exchange rate is the strongest against the euro since Spain went bust back in 2007 so you should take the money and run before the value of the pound drops again the high exchange rate is the resone you have a buyer I am right in thinking the the buyer of you're property is British l wouldn't think theirs to many Spanish buyers with the money to buy when you take into consideration that the Spanish can find it extremely difficult to get a mortgage.

 


This message was last edited by windtalker on 12/04/2015.



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12 Apr 2015 12:44 by newworld Star rating. 917 posts Send private message

The OP is right she is going to to loose alot of money if she sells her house  and wants to turn her money back into £££( if thats what she is doing ). If she had have sold about 2 years ago when the £££ was nearly 1 to 1 with the euro , that would have been best for her,she might have thad to give 1.10euro  or a £££, but now she might be giving 1.40 euro for her £££----- Big loss ----If she is keeping the sale of the money in euros no loss
 





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12 Apr 2015 13:50 by camposol Star rating in Camposol. 1411 posts Send private message

If the buyer pays the vendor a deposit , and loses it if he pulls out , I think the estate agent will claim their commission on it.





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14 Apr 2015 14:34 by mariadecastro Star rating in Algeciras (Cadiz). 9294 posts Send private message

Legal Questions? Speak to Maria Direct

The most reasonable contract to be signed when a deposit is paid is the one we describe below. Treating the initial deposit amounts as part of the price and the contract as a sales contract will put you in a weak position if contract is breached by the seller and you want to recover your deposit:

Once you sign a deposit contract for the purchase pof a house, you are tied to its conditions which might impact the full acquisition, so....pay good attention:

 These are all details contained in that agreement:

1.- Personal identification of seller and buyer

2.- Enough, official and clear identification of the property (Nota simple required,click here for more information)

3.- Definition of the contract which is being signed ( very important as this impacts refund rights if you withdraw) agreed price, method of payment (expressing if any amount is delivered as a deposit or on account of the price)

4.- Expenses and Taxes payer.

5.- Time within the public deed needs to be signed

6.- Implications of cancellation agreement: submitting it to provision 1454 of the Civil Code

The more in detail and tight, the more peaceful your purchase process will be.

 

 



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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14 Apr 2015 15:56 by Roberto Star rating in Torremolinos. 4495 posts Send private message

Roberto´s avatar

"The buyer deposited 3000 Euros with the esate agent but no contract has been signed yet."

Surely, even if a verbal acceptance of an offer was given by the seller (the original poster), since no contract has actually been signed yet, there IS no sale to pull out of? The estate agent will just have to return the deposit to the buyer, and can sing for his commission. Sh1t happens. My heart bleeds for the poor agent.



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"Politicians and diapers must be changed often, and for the same reason"

Mark Twain

 

 

 




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14 Apr 2015 16:27 by starfox Star rating. 58 posts Send private message

As far as I know a verbal contract is binding so at the very least once they have agreed to sell to you they can't accept an higher offer and pull out. It would likely need to be proved that all reasonable measures were being taken to get to the next step however like signing a pre contract and making a deposit. It depend what has been put in emails and such.

I think you are only paying the agent as a buyer to remove the house from their website, so I'm not entirely sure of the real need to pay an agent anything as a buyer. I may be wrong though.

A contract has been made though and the buyer is at the least entitled to their money back, possibly double which will no doubt be covered by what ever penalty payment is mentioned in the contract between to seller(OP) and agent.

We did not do that and the sellers were still taking visits and really were rushing us with the pre contract and deposit. Once the bank and lawyer where happy with the situation then we paid the deposit and signed the contract.

Now  if the sellers decide they don't want to sell, can't get the house's paperwork in order and legalise things or can't make the date to sign at the notary then they must return twice our deposit back to us as per the contract. Sounds great but I have no idea of the practicalities of getting that sort of money off of someone not in Spain. It's likely a big mess and would much rather everything went smoothly to begin with.

 

All in all the way I see it, it is just another reason to use a qualified legal representative when selling or buying as with the amounts of money you could stand to lose at the very least a lawyer will have professional indemnity insurance. A gestor, agent or property consultant may not offer any protection.

 


This message was last edited by starfox on 14/04/2015.



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15 Apr 2015 10:57 by baz1946 Star rating. 2177 posts Send private message

I am new to this discussion forum and new to selling a property in Spain.Please can anyone tell me if the Sales Commission Agreement that I have signed with my estate agent when he found me a buyer is legally binding as I have decided that I do not now want to carry on with selling my property as I think the exchange rate has gone against me.I do not want to let the buyer down but cannot afford to lose 15,000 Euros because of the weak Euro.When the agent first valued it and put it on the market the Euro was much stronger.What is my legal position.The buyer deposited 3000 Euros with the esate agent but no contract has been signed yet.

I cant help thinking how would you like it if the shoe was on the other foot? you bought a house and the sellers backed out due to the massive drop in the Euro some months back,  and no one can say without reading your agents agreement you signed as to how much, or if any fee's you will have to pay to this agent, after all is said and done the agent has done his job...Which got you the buyer.

It's no good thinking "Tough on the estate agent" just because some believe estate agents deserve this type of  treatment, after all you did accept the terms of the agent when you wanted to sell, and perhaps /  maybe you tried to sell your house privately, failed to get a buyer, thats why you went to an estate agent.

From the buyers point of view they probably looked at many houses and decided on yours, hence the deposit paid, so now the buyers have waited a while to get paperwork in order only to be told, perhaps weeks or months later you wont sell, look at it from the buyers situation, how could they go out and buy another house while in the process of buying yours, no doubt make many plans, and yet still get let down.

Everyone knows the money markets fluctuate up and down and this should have been accounted for from the onset, if this is to be taken into account by sellers (UK sellers who wish to move back) then many house sales could now be on the point of falling through. Sorry but a deal is a deal in my book come what may.





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15 Apr 2015 12:44 by Hephaestus Star rating in The Peak District Na.... 1237 posts Send private message

Shouldn't the OP's lawyer be able to answer this after liasing with the buyers lawyer? I'm presuming that lawyers have been instructed, in which case they will require payement for their time, otherwise the estate agent is the only recourse.



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15 Apr 2015 14:56 by srs Star rating. 136 posts Send private message

On the face of it from a moral standpoint most definitely, the agent has no doubt invested a lot of time and expertise in getting you the result that you appointed him/her to obtain on your behalf and now you don't want to pay for that service simply because you have changed your mind. Hopefully he/she will pursue you through the courts to recover what appears to be rightfully theirs.

I am not connected with any agents in any way shape or form.





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15 Apr 2015 17:43 by Hephaestus Star rating in The Peak District Na.... 1237 posts Send private message

Logic imples that the agent should not end up out pocket by the OP pulling out of the sale, in the UK they would wish to recover EPC, floor plan, photos and advertising costs, I've just sold a property and had to pay for these up front, they amounted to just under £500, this was obviously to cover the possibility of me pulling out of the sale.

I don't buy the morality issue, an agent should recieve their agreed fee on completion of the sale, there are many twists and turns between instruction and completion, the seller pulling out of the sale being one of them. 

 


This message was last edited by Hephaestus on 15/04/2015.

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16 Apr 2015 09:22 by johnzx Star rating in Spain. 5241 posts Send private message

Surely, it must depend on the wording of the contact signed between the seller and the agent.

If the commission is to be paid for introducing a buyer, then if a buyer is found and the only reason the sale breaks down is that the owner pulls out, that would seem the seller is liable.

However, if it states the commission is payable upon a successful sale, then no sale no fee.

 

SRS  On the face of it from a moral standpoint most definitely, the agent has no doubt invested a lot of time and expertise in getting you the result

 I would not agree with that based on my experience over 30 years in Spain. And if the agent has reached new people in the process,  they are still 'hot' potential buyers for another property.


 


This message was last edited by johnzx on 16/04/2015.


This message was last edited by johnzx on 16/04/2015.



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16 Apr 2015 15:22 by Roberto Star rating in Torremolinos. 4495 posts Send private message

Roberto´s avatar

I agree with John.

Hephaestus"an agent should recieve their agreed fee on completion of the sale"

Exactly. There has been no sale, therefore no commission. Simple. No contract has been signed between the buyer and the seller, a deposit was paid to the agent, NOT the seller. It's tough on the agent, perhaps, but this kind of thing can happen. When a sale does complete, he'll make plenty.

Back in the boom days, I had more than a few offers accepted (often the actual asking price) and then subsequently had the seller pull out because they thought they could get more. Very frustrating, but who was I going to sue? Buyers at the moment feel like they hold all the cards, but if sellers get squeezed any further, maybe the tables will start to turn.



_______________________

 

"Politicians and diapers must be changed often, and for the same reason"

Mark Twain

 

 

 




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16 Apr 2015 16:21 by starfox Star rating. 58 posts Send private message

You should of sued them, god knows how long it would take but a verbal contract is binding in Spain. A seller simply can't just pull out because they choose to and I imagine a quick threat of a denuncia and trip to court would of put everything back on the table. Might not be worth the hassle but then again it might be.

The buyer in this case has clearly entered into a contract to purchase the house, you don't just pay 3 grand for nothing and that will prove on their case more than a verbal contract has been established. I hope to hell they have a good lawyer and get everything they are entitled too. Which with any luck is twice the deposit they have paid depending on what contract they have entered.

 

As for the OP you need a lawyer quickly, I wouldn't necesarily trust an agents ability to write a contract that doesn't breach some type of law and your issue is with them for now. But you have signed a contract with them and clearly by your post at one point have agreed to the sale of the house so you need legal advice. As does the buyer.

 

http://belegal.com/questions/showQuestion/11-Are-verbal-agreements-enforceable-in-a-Spanish-Court-of-Law-

 


This message was last edited by starfox on 16/04/2015.



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17 Apr 2015 09:45 by baz1946 Star rating. 2177 posts Send private message

As far as I can see the house selling and buying in Spain is pretty easy, you chose the house, you check the paperwork, you pay your deposit, the seller backs out they pay back double the deposit, the buyer backs out they lose the deposit, of course as it might be pointed out a number of other considerations are to be taken into account well before you move in, but the basic first steps are easy.

This system of losing your deposit or paying back double...Full legal law or not... Is good and about time we had this in the UK, I understand Scotland has something similar also, might stop all the messers and tossers just wanting to look at your decorations, perhaps putting in offers only to back out with no recourse to them 5 months down the line, as it seems to be Spains way of doing things it has absolutely nothing to do with comparing it to the UK's way of letting messers get away with the problems they cause.

Signing paperwork or not, again if this is Spains legal house sales law, then tough, you back out expect to lose, you buy and sell in Spain, then get used to the way it works. 

Accept the Sunshine...Accept the Clouds. 





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17 Apr 2015 09:59 by Hephaestus Star rating in The Peak District Na.... 1237 posts Send private message

Just an attempt to get the thread back on track, the OP asks the question "Do I have to pay the sales commission if I pull out of the sale?"



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