September 8th 2008
We appointed a Queensland selling agent in 2006, believing they were the best agents for the job (as they all say). We eventually had a purchaser for the property at the end of 2007. The agent negotiated the contract of sale with the purchaser.
The contract was not going to be straight forward.
The purchaser wanted to take possession of the property on the agreed date of 15/11/07 and settlement was on 15/02/08 for $488 500.
The purchaser was to pay a deposit of $4985 and the balance on settlement. During this time he would pay us rent, that's ok. The contract itself was unconditional, no building and pest, no finance, etc. Everything was done by phone and fax.
One week prior to settlement the purchaser's solicitors advise us that he wants to extend the settlement date. Via the agent, he agreed to pay another $15000 for the property and increase the amount of rent until settlement on 01/04/08.
The purchaser also agreed to a further deposit of $20 000 paid into the agent's trust account. The extra deposit was to be paid by the 15/03/08.
It was by chance when my solicitor was checking with the agent that he discovered that the initial deposit of $4985 had not been paid into their trust account.
So the purchaser was advised he would have to pay $24985 on 15/03/08.
The agent advised me that the deposit was being transferred and everything was okay. With my mind at ease I then waited until 01/04/08 for settlement.
On the 01/04/08 the purchaser's solicitor advises us they can't settle and require a further extension until 15/05/08. This was not acceptable.
We thought, because we now held his $25000 deposit, he would settle or agree to my terms.
Instead the purchaser's solicitors advised us that he has withdrawn his offer to purchase and will immediately vacate the property. The solicitor referred to certain provisions of the Property Agents and Motor Dealers Act were not complied with and therefore the purchaser was withdrawing from the contract.
According to the Property Agents and Motor Dealers Act it is quite specific when a contract is being faxed to the purchaser that it is done in the correct order. The agent failed to do this and therefore the purchaser could just walk away after all these delays to settle.
If the agent had done what he was supposed to have done the outcome would have been completely different.
To make matters worse, in December 2007 we purchased another property and arranged settlement for 28/02/08, two weeks after the original settlement date for the sale of my property.
The idea was that the proceeds of our sale would pay for the other house we purchased. So to meet obligations with purchasing the other property we had to obtain finance from the bank.
We wouldn't have purchased the other property if we thought for a minute that the sale of my property wasn't going to happen.
We have pursued the agent for compensation via our solicitor with a less than satisfactory offer to resolve this dispute.
As we understand it, the agents are still entitled to their commission once a contract becomes unconditional irrespective of what happens after that time.
I feel we are being reasonable in asking for compensation of the deposit (which they should have collected) less their commission. Not much considering the financial losses we have incurred and the burden of a mortgage on another property.
We don't think it's too much to ask of an agent when they agree to sell your house and want a substantial commission for acting on your behalf, that they could at least do the correct procedures and ensure the purchaser meets his obligations with the sale.
I would appreciate your thoughts on this situation.