Do I have to pay estate agent fees if I decide not to sell?
Reading time: 5 minutes | Posted: 9th Jan 2021
Selling your home can be an extremely exciting time. However, changes in your circumstances such as an unexpected redundancy or illness can change the trajectory of your plans, meaning you want to change your mind about selling or maybe even had second thoughts about selling your home at all. Whatever your reasons for doing so, as a seller you have rights and today we’re going to talk about what to expect and any fees that may come hand in hand.
This entirely depends on where you are in the process of the sale. The earlier you’re able to withdraw, the cheaper and easier it will be.
You can withdraw at any time (even if you have verbally accepted an offer from a prospective buyer) if you don’t want to sell your home anymore, and it's before you’ve exchanged any paperwork.
You are not legally bound to continue if you haven’t completed any paperwork with a potential buyer. However, if you back out unexpectedly and your buyer has started their arrangements for the exchange, you may wish to help pay towards their costs. These might include legal expenses, but this is completely optional.
It's unlikely that you will need to pay fees in terms of estate agent fees. High street agents usually operate on commission fees and only get paid when a sale of property has been completed.
However, you can expect to pay fees (if you haven't already) when you're using an online estate agent. A non-returnable fee is usually paid straight away among most online estate agents. They will keep their fee if you change your mind about the sale at any point - even if you haven’t agreed upon a sale with a buyer.
The process to withdraw after you've completed the necessary paperwork with your buyer. You are legally obliged to go through with selling your property once deposits have been paid and you’ve signed all of the necessary documents.
You may be prosecuted if you decide not to sell, and you’ll be required to pay any money the buyer has paid, including their deposits and legal fees.
Not only will your buyer suffer from the legal and financial implications of you pulling out of the sale, but it may bring other complications too such as letting down other buyers if your buyer was buying through a chain.
It’s worth noting that you must provide a substantial reason for pulling out of sale, as the fees you pay could be higher. You cannot pull out of a sale based on the buyers race, sexuality or gender.
If you decide not to sell, whether you’ll be expected to pay any fees depends on what kind of real estate agent you have chosen and the arrangement you’ve made with them.
You should expect to have to pay the full fee if you're using an agent that operates entirely online. High street agents operate on commission, so the circumstance here will be more difficult.
You can expect to shell out the costs of fees despite whether you sell or not if you're working with an online agent. This tends to be because a non-returnable fee system is used. Because of this, you have to pay them at the beginning of the process, and if they can't help you sell your home, or you decide you don't want to move anymore, you won't be refunded.
A 'deferred fee', or 'no sale, no fee' option is now provided by some online agents, and it’s important to check your contract before pulling your home off the market, because if they do have this, it will waive the fee.
The situation here is markedly different. You will be asked by most local estate agents to pay commission on the sale of your property. Your estate agent won’t get paid until your home has been sold, so if you change your mind or take your home off the market, you may not have to pay any fees.
You've made a legal commitment to sell your home after you've exchanged contracts, so here is when your situation can become difficult. Your estate agent may demand a full fee. Technically, by finding an appropriate buyer and moving the sale forward, the agent has fulfilled its role. At this point, your estate agent has rights to charge a full fee.
There may be other fees incurred if you pull out such as reimbursing your estate agent for marketing efforts, but this is all entirely down to the company. It’s always best to thoroughly read the contract you’ve made with them to find out about any fees. If you’re not sure what you’re looking at, speak to a solicitor who will be able to advise you.
Here’s what to look for in your contract:
If in an estate agent contract you find a 'ready willing and able' clause, you should be concerned. This is a strange clause that means that you have to pay their fee if your estate agent introduces you to someone who is 'ready, willing, and able' to buy your property - even if you don't want to sell this person your home.
Ask for this clause to be removed before you sign your estate agency contract, or work with a different agent.
This clause means that when you sell your home, regardless of who finds the buyer, you will have to pay your estate agent. Look for a 'sole agency' deal instead.
If your estate agent contract has a term that is longer than 6 months, or there is no mention of a contract term length, this is a red flag because even years down the line, they could find a buyer for your home and you would still have to pay their fee. Make sure the term length is clear and reasonable when reading through your contract.Share this: