Hi there, hoping someone has some advice.
I'm on the brink of purchasing a property that I have viewed twice with two different agents, and now I'm on the brink of closing with a third! It's a bit of a mess but what happened was that after looking at this flat with one agent, we wanted to look at other apartments in the same estate. But a second agent took us to the SAME flat. Then the second agent got me to sign some kind of agreement. He was way too pushy about it so we dropped him.
Then, a THIRD agent, who we had engaged to show us another yet flat in the complex (which eventually fell through) actually managed to negotiate the first flat down to a level that we can afford (which I didn't really expect her to be able to do!). My worry now is that I'm going to be stuck paying commission to both of these agents because I signed that damn form! Anyone out there know whether those little forms are binding or not? For what it's worth, both agents are from the same agency (ricacorp)
I had a look on the Real Estate Agent Authority website and on there they had a sample agreement that was drawn up like a proper contract, nothing at all like what I signed. Can I just move forward with the purchase and hope the second agent doesn't notice, or do I need to bring it up?
Such a weird situation--hope someone can help!
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Not an ideal situation indeed.
You were suppose to sign already the viewing form with the first agent,
Which means, you were suppose to sign the viewing form also with the 2nd agent,
Then if you finally take it with the 3rd agent and yet signed the viewing forms of the 1st & 2nd agent, you can end up paying commission of 1% to all 3 agents !
If agent 1 and 2 have not signed you on the viewing form because they trusted you (or did not do their job correctly), if from a moral point of view you do not find it disturbing to sign with #3 what agent 1 have showed you, then not sure what else can be said here.
If I were you, I'll apologize to agent #3 and say that you checked your record and viewed this a short while ago with another agent, same applies for agent 2 and you should really go back to agent 1 if you want to sleep in that apartment with good karma.
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Thank you both for the tips.
Softy, I think that's probably the way forward. I need to tell Agent 3 the situation. I wish I had a copy of the agreement because I just don't know exactly what I have signed.
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How much did you get the flat for and how much cheaper was the property with agent 3?
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To be honest. If you don't pay the other agents, you are cheating them out of their day's work which is unjust.
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Yep. Same agency shouldn't be a problem but two agencies, you'll probably end up having to pay both. We had a similar dispute with an agency. Someone agreed to rent our place but we pulled out as landlords when we discovered the tenant was measuring up the flat and was going to start drilling (the joys of being a landlord in Yuen Long). We ignored their demands for about 6 months but as it was Midland, and owned by Li Ka Shing, they had unlimited resources. So we paid up.
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If they have your signature and ID card then they will win. Very simple.
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first off, get a copy of what you have signed.
most likely you have signed twice the same agreement, i.e. your legal counterparty is the same agency, in which case you would pay once only
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RCD
12 yrs ago
I think if you talk to the agency all agents involved can split the commision,,, you might have to pay a bit mor however good luck
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hi lloyd, agent 2 didnt even get us to negotiation stage. The vendors originally wanted 7.38 and he basically tried to push me into making an offer the same day we saw it when we weren't ready to. So I absurdly lowballed him with 5.5. and he backed off. I haven't heard from him since. I don't think he even made the offer to the vendors. Agent 3 managed to negotiate down to 6.5!
Malka, we only signed this agreement once, with Agent 2. But basically all he did was show us the flat. The form on the Real Estate Agents Authority homepage looks incredibly different to what we signed. i.e. it looks like a real contract as opposed to a "form" so not sure how binding it is. I don't remember getting a copy of the contract.
Luckily both agents are from the same agency. I think it won't be a problem having spoken to a lawyer friend and also an acquaintance who's in the property business.
Thank you all for the tips! I definitely don't want to find myself in this situation again! :P
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Hugie
12 yrs ago
i thought the agreement was that you didn't approach the owner and deal direct with them! I bought a hse in NT and used 3 agents! I just told the others i prefered the one I chose! Didn't cross my mind I had to pay commission!! Woops!
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Hugie, that could actually be the wording on this "form" that I don't have! Glad that you had a similar experience. If the other agents didn't close the deal then I don't really see what grounds they have to get a commission, but I just want to make sure that everything is above board.
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I wouldn't want you as a client.
In fact, I had a buyer like you make an offer to buy my flat a few weeks ago. Then, when I did not quickly take accept, I got the same offer from three more agents !
In the end, I said: "This is too confusing. Either there is more than one buyer, or this buyer doesn't know how to negotiate, and mistreats the agents. I would prefer not to deal with him/her."
Luckily, the market has moved up since then, and I now expect to sell at a higher price. But for a while I was not happy that both the buyer and the agents had handled their roles and negotiations so very poorly. The contracts are there for a purpose. You just have to know how to use them, and how to get the most from agents.
But, hey, I do agree that many agents are very clumsy when it comes to negotiating, and so the contracts do tend to put buyers into a straight-jacket.
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1% of a sale, or 1/2 month's rent is "too much for what they do"???
Have you seen the commission levels in other countries ?
Sure, property prices are expensive. But that doesn't necessarily make the agents job easier, since many potential buyers are experiencing "sticker shock"
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OffThePeak, I only made one offer, which was via agent 3, who wasn't even supposed to be showing us that flat in the first place! She was supposed to show us another place and then asked us to reconsider the flat in question, knowing that we had seen it already. I even told her that I wouldn't see it with her again because it would be a waste of everyone's time.
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Yeah.
I can understand your point of view- sort of.
You were lucky to find an agent who was a good negotiator, bad luck it was after the other two.
However, I think the easiest time to sort out the potential problem would have been before you agreed the final price.
Now, you might want to try to find the guy who is the common boss of both agents, and hope that he can see things from the customers point of view. Or just stay quiet and hope that it slips by. But you might be a weak position from a legal standpoint.
Nexus will have you as a client twice, so its a pity you didnt do the deal through him (haha)
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We have a friend who is an estate agent here.
Her salary, before commissions, is $5,000 per month
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"if you are going to see the same property twice, just refuse to go in the flat."
Or tell the agent*, you will only pay him a 0.5% commission, and even then, only if he can get the other agent to accept 0.5%, so your commission is 1.0% Total
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*(You will need to have this conversation BEFORE you agree a final price and sign the Sales Contract)
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Hugie
12 yrs ago
Just thought of something else. When I was looking to buy, one agent found out which flat I was looking at and offered to be my agent for that flat. I told him that another agent had shown me already. He said it doesn't matter. In the end I said I felt obliged to use the first agent even though I preferred him. Mind you once you sign, make sure you get yr money's worth. Get them to do all your running around solicitors paperwork etc. Njoy.
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vak
12 yrs ago
in essence it all depends on dates of the agreements and values.
The 1st form you always get to sign is the one which guarantees the comission to an agent if you were to take the place from someone else subsequently or deal with the vendor direct. So any agents you see after the 1st one for the SAME PROPERTY should be made aware that you have already seen the place.
As an example if you saw the same property every week through 4 agents and bought it through the second one, you will most like be obliged to pay the 1st one if he decides to go for it but not the 3rd and 4th as they were not the 1st to show you the property.
The only negotiation here is value. If the 4th agent here was the one who got you the best deal, you can allways argue that the 1st 3 did a shoddy job and did not represent your interests properly in the 1st place (and therefore do not desreve a comission). To get a price drop from 7.38 to 6.5 means the agents did not do their homework or the seller dropped the price overnight.
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ViaMind, your:
"OffThePeak, I think even the 2nd agent accept you to take 0.5%, you still better got the acceptance of the 1st agent before too. Isn't it?
I agree not to go in the flat is the best way, but, it should be when you did not sign yet.
Or , give an offer to any agent telling the offer is valid in how many days, together with the commission. or at the begining, make them agree. or change the "3 months" to "1.5 months". Usually if you like the flat you mostly sign the initial agreement within 1.5 months.
every terms is flexable before signing."
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I Agree.
And have added the following comment, as an asterisk:
*(You will need to have this conversation BEFORE you agree a final price and sign the Sales Contract)
Since they work for the same firm, you may be able to get the second agent to get the first agent to agree, as a condition for signing the Purchase Contract
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Agent, your:
"A little method of getting the best price, give an (very) low offer, lower than your thinking to buy, ( agent have to tell competitors offer if they know, before giving up yours ) with a check, a signed offer, and a limited valid date, say 1 or 2 days only, to push the agent, and saying if the agent can not make this price, you go through other agent with the same price ( the same price only you can try other agent, higher price you still have to the chance to the same agent )"
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That might work, if the seller can be cajoled into lowering his/her price. When agents have tried to suggest that to me (as a seller), I say: don't bother, I know what price I want, and there is no reason to flash a cheque to me when I can tell you that I will not accept it.
Here's what I do to get the best possible price, as I either seller or buyer. When we are getting close to endgame in a negotiation, I might say to the agent:
"My bottom price, to pay you a 1% commission is: $XXXX. If you want me to accept less than that, then every $10,000 I come down, $5,000 will come off your commission."
I have done this many times as Buyer and as Seller, and it usually results in me getting my "bottom-1%-commission" price, or not much below that
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thanks everyone for all the tips, but guess what--agent tells me today that all of a sudden, the vendors want 7M again, allegedly because of QE3! This is an impossible price for us so all this might be a non-issue now at the end of the day. Very frustrating to have greedy vendors dangling this in front of us and then snatching it away again. I don't know if it's a tactic to try and squeeze more out of us or what, but it's irrelevant because we cannot get a bigger mortgage.
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I am confused?
Did you sign a contract, and put down a deposit?
If so, you should get it back, plus the same amount again - as a penalty.
You seem to be dealing with some very dodgy characters
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"i know many people is doing the same, and it is encouraging/training people/agent greedy, forgot they are representing both parties" ??
What is greedy about giving the agent a monetary incentive to get you a better price?
It works well on either side, and I have used it about 5-6 times successfully
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Of Course, I set a "fair" price at which I am willing to sell my property. If the agent thinks it is too high, he can simply refuse to show the flat. If he finds a Buyer, and the Buyer pays my price, then I am more than happy to pay a 1% commission. And I may come down a little on price, and still pay a 1% commission.
But if an agent argues for a bigger price cut, then I tell they agent: "If I cut my price below $XXXX, you will have to share in the pain."
A buyer could do the same.
I have been in a negotiation not long ago, where both sides were using the same tactic. And the deal could have happened, but it would have left the agent with only a tiny commission, so the deal did not go through. Sadly.
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sorry offthepeak. Didn't mean to confuse. We were told by agent 3 that we had to rush to sign the provisional agreement and pay the deposit on friday and they then delayed to monday. When I called to arrange the time to pay the deposit, that's when they told me they wanted more. No money has changed hands at this stage.
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I don't understand that.
I have bought and sold over half a dozen flats in HK.
In my experience, the agents always hussle around (at any time of day or night), and get both parties to sign on the same day that the price was agreed.
Something has been abnormal about this transaction, it seems to me.
When I sign as a Buyer, I usually tell the agent, that my signature and contract is only valid for a very short period of time - to put pressure on them to get both parties to sign.
The legal framework in HK for selling flats is very fair, transparent, and logical. If you understand it, and work within it, it should work for you too. If you try to subvert it, you may discover some headaches.
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Well they're saying that it's because of the QE3 that they now want half a million more. The agreement was (allegedly) delayed on friday because the vendor was going to china for the weekend. I don't know whether to believe that or if it's a tactic by the agent to hook us in and then jack the price back up once we are mentally committed.
Thankfully they didn't make us hand over the deposit because this new mortgage restriction means that the bank may have turned down our mortgage request anyway!
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Yes.
Most likely a tactic.
In fact, don't be surprised if there are other buyers out there, and you are now in a bidding war.
The "third agent" who you thought was a "good negotiator" may well have decided to "game" you and anotehr buyer.
If I was you, I would look for another flat, and with luck, you will find something you like more, and you can tell him you have lost interest.
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vak
12 yrs ago
offf the peak, a signed contract even with a cheque is worrthless UNLESS the cheque has been presented. Typically if a seller cashes the cheque and then backs out the seller has to pay twice the deposit amount to back out.
A buyer on the other hand if backing out loses the deposit in full.
Here is how the HK sellers play the game as I found out when I bought my place.
They make you give them a cheque for a deposit. They then use the cheque to show other prospective buyers/tenants that they have got a deposit on a flat for say 6.5 mill but have not cashed it as they want 7. First come first served at 7 so the unsuspecting new buyer usually goes for 7 if v keen.
There is a second scenario if the cheque has been cleared. Assume the deposit was for 200000 on a property of 10 million. The seller stalls the rest of the deal and tries to get say 11 million. Seller is now more than willing to compensate the 1st buyer for 200000 as he still stands to gain 800k with the extra sale value.
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Ah, and you have to pay both sets of agents, plus potentially another 1% on 11m, plus who accepts 2% deposit these days - 5% please. At 5% you are up around 710k in additional costs (plus extra legal too), plus you are dealing with 2 buyers now, not sure I'd accept $300k for that hassle, though lots do.
And for the OP, please understand the system next time around and play by the rules. It ain't that difficult (I can do it). Ask if you are unclear, lots of people here will help.
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Vak,
Regarding scenario 1, when you say "they", do you mean the vendor or agent?
Does the vendor use the cheque to show other agents to try and get a higher price prior to signing. Or the agent (knowing too well that the vendor won't sell at that low price) uses this cheque (from the unsuspecting dummy bidder) to show his other prospective buyers to try and achieve a satisfactory price that the vendor will accept?
Ive known many people who unknowingly were played by the 2nd scenario. Sure they got double the deposit back, but some had already put down deposits on their next property, only to have to revoke the purchase as a result. Theres a lesson in that for everyone... wait for full payment before putting down a deposit on your next property (if you need the money from the sale to finalize the next one).
@ OTP, its interesting to note how many agents keep asking the vendor about commissions.. knowing too well that they are acting on behalf of vendor and buyer... supposedly..
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vak
12 yrs ago
rob , I was implying vendor not agent as we tried to buy a place 8 yrs ago and gave a cheque for hkd 200k with our side of the preliminary contract signed. Local seller said it was his brothers property and would have him sign and return the papers. Never happened and agent returned the papers and cheque a week later saying owner did not want to deal with expats.
Similar experience with a Friend who wanted to rent 3 years ago. Agent took a cheque for one months deposit and made the tenant sign their side of the form with the understanding that agent would take it to the Owners office the following day and get his side signed. After 4 days he returned the form and the cheque saying owner got a better offer. We can never find out who made the better offer and was our cheque used as a leverage for the better offer.
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"offf the peak, a signed contract even with a cheque is worrthless UNLESS the cheque has been presented."
I am surprised by that.
It happened to me once. I "bought" a flat, and handed over my $100K cheque, and just under a week later, I was told that the purchase would not go through.
I got my $100K back, plus another $100K penalty, which I used to buy a different flat.
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"fter 4 days he returned the form and the cheque saying owner got a better offer. "
If that happened to me, I'd have a word with my lawyer, and - at minimum - would report the agent to his company's president and the Estate Agent's association. It is unethical behaviour and should not go "unrewarded"
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Today's SCMP:
Flat Buyers need real-time sales information
Details of purchases will soon have to be on a database with 24 hours, but Consumer Council wants it faster
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What do you reckon... When does a Sale happen?
1) When the buyer signs and hands over his cheque?
2) When the Seller signs, and accepts the cheque?
3) When the Cheque is presented at the bank?
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Maybe Wendy Lam Yuen-mui, the Consumer Council's deputy CEO needs to think a bit more clearly along these lines.
BTW I would like to know the legal answer
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