Real Estate Director Demanding Marketing Costs

PAOK11 on 20/02/2019 - 10:06
Last edited 20/02/2019 - 10:07

I had the director of a real estate agency attend my home and demand the marketing costs on Saturday. A bit of background is, the agent is still acting on my behalf in the sale and I was never advised when the marketing was required to be paid when I signed the sale authority.

The property has not sold in 4 months and I've been been putting off paying the marketing. Please understand, I'm not disputing that i'm required to pay the marketing. I understand that a service was provided and I'm required to pay. I have let the director know of this but he is very unreasonable and is now threatening me with legal action.

I plan to withdraw the property if it has not sold by mid march and I plan to pay immediately after. What worries me the most is the way the director is carrying on, he clearly has no faith in the property selling.

Am I overthinking this ? Any advice would be appreciated.

Financial

Comments

  • candle on 20/02/2019 - 10:10
    +44

    I would suggest that you have a thorough read through the contract you signed. My guess is that it will state when the marketing fee needs to be paid, and you should abide by that. If it doesn't, then I guess you might have room to negotiate the timing.

    • Musing Outloud on 23/02/2019 - 14:49

      Timing is everything!

      Having done this several times myself, payment has always been at settlement. What disturbs me is if the Principal is already on your back before settlement, he has cash flow problems.

      On top of this he guides his sales staff. So if you aren't selling and he chasing the money, and if he has guided his staff not to put an effort then you also need to change agents.

      I'd be looking at how soon you can get rid of this agent. Then pay him on the last day of his agency agreement.

  • holdenmg on 20/02/2019 - 10:14
    +3

    If you have an agreement it should clearly state if the marketing is to be paid as you go, on success or whatever…

    Surely you discussed a sign, being on Domain/RealEstate.com.au, Photos/Floorplans/Flyers etc, what would be paid and when???

  • QW3RTY on 20/02/2019 - 10:14
    +26

    I've been been putting off paying the marketing.

    I'm not disputing that i'm required to pay the marketing.

    /thread

    The Real Estate agent has paid for a service to which you've agreed to reimburse them. You haven't.
    Four months have passed and I assume they've been chasing you for it.
    Pay them what you agreed to and you won't be treated in a manner you consider "unreasonable".

    • abuch47 on 21/02/2019 - 18:33
      +1

      exactly drop your price to get it sold or take it off market for a month spend as little as possible to appeal to the largest market and reopen at the right price and LET IT GO.

  • HighAndDry on 20/02/2019 - 10:15
    +24

    I'm not disputing that i'm required to pay the marketing. I understand that a service was provided and I'm required to pay. I have let the director know of this but he is very unreasonable and is now threatening me with legal action.

    I don't see how the director is the unreasonable one and not you. You understand you owe money and you're refusing to pay.

    Am I overthinking this ?

    Yes. Just pay what you owe.

    • original15 on 20/02/2019 - 18:22
      +2

      ..And isnt having luck selling the place so is going to annoy the people tasked with selling it

      Sounds like a bold strategy

  • [Deactivated] on 20/02/2019 - 10:16
    +14

    If the marketing fee is due, you are required to pay. It is not your choice to pay at your convenience.

    It has nothing to do with faith. I'm sure everyone who isn't a hermit will have their reservations about the real estate market but even if this is a seller's market, it's the REA legal entitlement to demand payment when it is due.

    Ps. The REA may already be selling your property short at this point and I wouldn't blame him. I'm not going to talk up a property for someone who seems to be dodging payment. Heck, if I'm the REA, your open house would be something to remember and I'd be helping buyer's see the low end of the acceptable price (without doing anything illegal). Call it unethical but that's what life has in-store for pay-dodgers.

  • Baysew on 20/02/2019 - 10:24
    +71

    What worries me the most is the way the director is carrying on, he clearly has no faith in the property selling me paying.

    • Typical16-bitEnjoyer on 20/02/2019 - 15:14
      +1

      Alas, I am only permitted to give you 1 plus vote. I wish I could give you more.

  • geech on 20/02/2019 - 10:34
    +3

    Check the contract you signed with the agent/agency and pay the outstanding fees whenever it says they're due

  • [Deactivated] on 20/02/2019 - 10:37
    -1

    Just pay it, or risk getting a lien and the associated costs against your property. If you don't like the agent, that is separate and can be reported.

  • [Deactivated] on 20/02/2019 - 10:41
    +12

    stop being cheap

  • Hithere on 20/02/2019 - 10:46
    +7

    You obviously owe the money so pay it. It's 4 months already according to you and you expect to get away with yet another month.

    I'm sure that you expect to be paid for work you do in a reasonable timeframe so why not the real estate agency, not their fault it hasn't sold

    • Sensiekatie on 21/02/2019 - 08:43

      It could well be the agent’s fault it is not selling. There are good and bad.

      • JIMB0 on 21/02/2019 - 09:31

        Could also be an unrealistic seller who still wants top dollar.

  • GangGang on 20/02/2019 - 10:49
    +4

    Your situation is different because your house isn't selling.

    All the fees are usually taken out of the final sale price. Now that you're property hasn't sold, just read the T&C and it will indicate when to pay.

    • HighAndDry on 20/02/2019 - 12:19

      Very commonly, marketing fees are payable upfront, with the commission paid on settlement. That's because marketing fees are costs incurred by the real estate agent - they've already paid money to someone else.

      • GangGang on 20/02/2019 - 16:46
        +1

        Really? I've sold 2 houses (6 years & 1 year ago). Both times have been paid at the end.

        • [Deactivated] on 20/02/2019 - 17:43
          +3

          In a good market, the REA doesn't care. Signing on a new property is the sale itself. They likely had every right to bill you as two separate charged but they'd rather be known as the most relaxed REA so you refer a buddy.

          After all, signing a new property = instant cash. Back then…

        • HighAndDry on 20/02/2019 - 18:42
          +1

          Depends on the market as tshow said. Also depends on the market segment and on the particular agent.

        • cashie on 21/02/2019 - 23:57

          I’ve sold 4 houses and marketing has always been requested upfront.

          • Nebargains on 22/02/2019 - 08:50

            @cashie: Well there you go, maybe there isn't an industry standard and each agent does it differently.

            As such I don't see why we are giving this guy a hard time, perhaps this REA is completely amateur and that it is not specified in any contract. Wouldn't shock me considering it's been on the market for 4 months.

            For what it's worth in my last experience selling a house the marketing fee was taken at the end and not paid up front. There was also a clause in there that if it didn't sell in XYZ time frame that we didn't pay the marketing costs.

            Also - marketing was not paid up front in my case because they didn't know how much marketing to do and different places to advertise cost different amounts.

    • tik tok on 22/02/2019 - 15:10

      The OP not accepting reasonable offers can also be a reason for the house not selling.

  • JimmyF on 20/02/2019 - 11:28
    +12

    I've been been putting off paying the marketing.

    Why?

    I'm not disputing that i'm required to pay the marketing.

    Then pay it, they are due.

    I plan to withdraw the property if it has not sold by mid march and I plan to pay immediately after

    You don't choose when to pay it, the contract terms say when you need to pay it.

    Even if your place doesn't sell, you still need to pay the fees.

  • Ughhh on 20/02/2019 - 11:36
    +10

    threatening me with legal action.

    Sounds like a reasonable thing to do when you're owed money.

    • [Deactivated] on 20/02/2019 - 12:24
      +4

      Wait.

      Not bikies?

  • dasher86 on 20/02/2019 - 12:32
    +1

    This brings me to question - because you are not paying the marketing fee- has the agent not been provided you with full service?
    eg. he's not paying his fees, let's not waste any more resources on selling his property.

    • HighAndDry on 20/02/2019 - 12:34
      +1

      I'm thinking this too. OP is refusing to pay the agent, but apparently expects the agent to still be working their hardest to sell the property? Eh…

      • cheapjunkie on 20/02/2019 - 12:43
        +3

        If you employed them as you said, shouldn't you pay them too when it's due? The marketing cost is associated to this job you employed them to do and is a major aspect to them being able to do this job… I am sure there will be another post later saying "The REA did not sell my property after 4 months, should i pay them marketing costs due since they did not do their job?"

        • PAOK11 on 20/02/2019 - 12:53
          -2

          I was not advised when the marketing would be due at the signing of the contract. No, I'm not going to dispute the marketing, I know I need to pay.

          • geech on 20/02/2019 - 12:55
            +2

            @PAOK11: It doesn't stipulate it when the fees are paid in the agreement you signed with them? Might be different in NSW, but it's clearly stated how much the fees are, what they are for, and when they are due on my agency agreement

          • cheapjunkie on 20/02/2019 - 13:17

            @PAOK11: Ok if that were the case, you were told by the REA for the last 4 months to pay for it which seems to kinda stipulate it's due, but yet you havn't? What exactly are you waiting for then? A letter of demand from lawyers?

          • varunynr on 21/02/2019 - 08:08

            @PAOK11: Just read the contract mate. That's what they are for and they need to be read to avoid surprises like these. Good luck with this now. Having your only agent go rogue wont help you sell your property especially at the price range you want.

          • goraygo on 21/02/2019 - 18:19

            @PAOK11: @PAOK11

            Forget what they tell you or not, did you read the contract before you sign it?

            If you haven’t read it at the time you signed and think it is not your responsibility, then you need to understand you are seriously wrong.

            On the other hand, if the price is not on the contract, then you can argue.

          • Piranha2004 on 22/02/2019 - 08:54

            @PAOK11: Sounds like the payment is due now? Why make a fuss about it if you know you have to pay anyway?

            • PAOK11 on 22/02/2019 - 09:13
              -6

              @Piranha2004: Technically it's three months overdue.

              • Piranha2004 on 22/02/2019 - 09:41
                +3

                @PAOK11: I think you are letting your dissatisfaction at your property not selling cloud your judgement on this issue. REA has clearly performed a service (whether you are happy with it or not is irrelevant) and needs to be compensated. They have stated they are seeking the money now so I would just pay up.

      • [Deactivated] on 20/02/2019 - 12:46

        contrary to popular belief on Ozbargain…

        What is the popular belief on OzBargain?

      • HighAndDry on 20/02/2019 - 13:00

        Marketing and advertising is really part of selling.

      • Zonty on 23/02/2019 - 01:35

        I had sold property recently. Contract was said all, all fees will be paid end of selling, but in case if fail to sell writhing 3 months I was liable to pay marketing cost which include all board, photographer cost, real estate website and domain website listing which is very expensive. It's says on your appraisal.if you want keep going same agent it might cost less after 3 months. If you will go after new agents then will cost more because he have to do again all.
        Good luck now it's buyer market. Lucky me when I sold, market was swinging.

        • PAOK11 on 24/02/2019 - 10:41

          when did you sell?

          • Zonty on 25/02/2019 - 08:33
            +1

            @PAOK11: June 2018

            • PAOK11 on 25/02/2019 - 09:32

              @Zonty: Yep that's when everyone in my street was selling

  • ihbh on 20/02/2019 - 12:54
    +5

    What worries me the most is the way the director is carrying on, he clearly has no faith in the property selling.

    There's a saying in the real estate industry: you can control the price or the timing, but not both. Obviously the property will sell pretty quickly at a bargain price, but not for years if the seller has anchored his selling price at the last couple of years' peak. Have you done this?

  • AG_ACT on 20/02/2019 - 12:55

    I agree with your sentiment "I actually employed the real estate agent to sell my property. If I just wanted to advertise it, I would have done it myself." but unfortunately, the time to negotiate this would be BEFORE engaging someone to do a job for you.

    Pay the costs, and next time, make sure you have an agreement that states you will:
    1) not pay any costs if the property didn't sell
    2) only pay at the point of sale

    Obviously this will limit your choice of agents, but you can negotiate anything you would like. For now, pay the costs

    • Zonty on 25/02/2019 - 08:37

      It's not like that because to put advertisements on real estate website cost a lot. And none agent will bear that cost. 70% house sells because of realestate website. Also selling price sales decides no matter it's stupidly high reserve or not so agen have no power on selling price.

  • matt-ozb on 20/02/2019 - 14:43
    +3

    What is this thread all about?
    The OP had all the answers in his contract which he/she can't seem to read.

  • Typical16-bitEnjoyer on 20/02/2019 - 15:10

    I've been been putting off paying the marketing.

    Please understand, I'm not disputing that i'm required to pay the marketing.

    JUST PAY THE DAMN MARKETING INVOICE.

    /END THREAD

  • MITM on 20/02/2019 - 15:17

    Ask the agent if you can make a payment plan because you were relying on the sale to pay all costs.
    Maybe they can arrange "Ezypay" or similar.
    Last thing you want is a caveat on your property.

  • alanadallow on 20/02/2019 - 15:58
    +2

    Seems like you paid nothing so far and got exactly that.

    Move along, nothing to see here.

  • caramellokoala on 20/02/2019 - 18:53
    +2

    Interesting. It’s almost like you’re blaming the realestate for your unrealistic price expectations.

  • Sofie519 on 21/02/2019 - 01:13
    +2

    You need to check the 2nd page of your agency agreement it would clearly indicate what expenses and charges there are as well as when it is payable. As part of your initial negotiation, it might be "on invoice", "on sale or withdrawal" etc.

    Perhaps treat your Agent better (pay the invoice if obligated?). If you create tension or mistreat them, they wont go out of their way to help you either.

    Since the Agent has already invoiced you, I am assuming that they expect you to pay on invoice. If you didnt pay, it is not likely that they will continue to market your property, nor highlight it during sales meetings, so there may be a correlation between why your house has been on the market for so long.

      • ihbh on 21/02/2019 - 09:43
        +2

        my logic would be sell the house

        Obviously that would be the agent's logic. But seller might not be logical with price he will sell for.

      • Sofie519 on 21/02/2019 - 09:44
        +1

        But the LAW says, refer to your agency agreement on how the cost is recouped by the Agent and when it is payable.

        • PAOK11 on 21/02/2019 - 09:46
          -1

          Interesting you bring the price up, because I was overquoted at the appointment. Yes, I looked at the sale authority. Payment is required upon issuing of the invoice.

          • Sofie519 on 21/02/2019 - 09:57
            +2

            @PAOK11: The Agency agreement also indicates the Agents estimate price, but that is 4 months ago, and is generally based on PAST sales. In a declining market, I'm sure you can see how figures will decrease over time.

            Btw the agency agreement would also say how much the vendor wants to sell it for, and the property is listed at the Vendor's requested price, not the on the Agents estimate price.

            • PAOK11 on 21/02/2019 - 10:00
              -5

              @Sofie519: You sound like a real estate agent. It's illegal to overquote the price of a property.

              • Sofie519 on 21/02/2019 - 10:25
                +7

                @PAOK11: Lol, just because I actually read my agency agreements (before signing it) that doesn't make me an agent.

                Yes it is illegal for the agent to over estimate the price, but you would have been given a Comparable sales report(?) prior to listing to see what the recent sales prices are, and form the basis of their estimate. Again their estimate is based on past sales.

                • PAOK11 on 21/02/2019 - 10:29
                  -3

                  @Sofie519: I'm not sure my property can drop $50,000 in 4 months but i'm sure my agent would like me to believe so.

                  • Typical16-bitEnjoyer on 21/02/2019 - 11:14
                    +10

                    @PAOK11: Um have you not seen the drop in clearance rates in Melbourne and Sydney? Prices are dropping.

                    You admit it says payment upon issuing of the invoice.

                    You're clearly unsatisfied the property hasn't sold. Too bad. Pay what you owe. Stop wasting our time.

                    • PAOK11 on 21/02/2019 - 11:19
                      -3

                      @Typical16-bitEnjoyer: didn't realise I was forcing you to be here

                      • Typical16-bitEnjoyer on 21/02/2019 - 13:17
                        +3

                        @PAOK11: There is not a single post or a single person in this thread that thinks you're in the right withholding payment.

                        What does that tell you?

                      • Baysew on 21/02/2019 - 13:57
                        +7

                        @PAOK11:

                        didn't realise I was forcing you to be here

                        What happened to -

                        Any advice would be appreciated.

                        • PAOK11 on 21/02/2019 - 14:07
                          -2

                          @Baysew: oh yeh your right. He may be needed elsewhere to spread his infinite wisdom

                  • QW3RTY on 21/02/2019 - 13:26
                    +4

                    @PAOK11:

                    I'm not sure my property can drop $50,000 in 4 months but i'm sure my agent would like me to believe so.

                    Oh what a four second Google search can do these days.

                  • Hithere on 21/02/2019 - 14:40

                    @PAOK11: Don't be surprised if it drops another $50,000 in the next few months either.

                    The trickle of property prices dropping is turning into a full torrent.

                    As more and more owners start selling because they can't afford to pay for a house that they owe more on than it's worth 'you ain't seen nothing yet'.

                    • PAOK11 on 21/02/2019 - 14:43
                      -3

                      @Hithere: Been watching the news a fair bit haven't you ?

                      • Hithere on 21/02/2019 - 14:45
                        +8

                        @PAOK11: No, watching the property market, experience, advertisements, auctions etc. :)

      • ganymede on 21/02/2019 - 22:16

        So, what does the contract you SIGNED says?

  • [Deactivated] on 21/02/2019 - 14:08
    +13

    If this is your way of thinking, then id hate to imagine what sort of garbage you spew on your blog

    https://www.ozbargain.com.au/node/341749

    XD

    • PAOK11 on 21/02/2019 - 14:09
      -5

      lol stalker XD

      • Typical16-bitEnjoyer on 21/02/2019 - 14:58
        +13

        so I hope to educate a few people (about finance) along the way

        nek minnit

        Doesn't want to pay an invoice that's due and payable

    • geech on 21/02/2019 - 15:25
      +6

      Solid gold!

    • burningrage on 21/02/2019 - 19:07
      +1

      Alas, I have to agree with Jason.

    • abb on 22/02/2019 - 10:23
      +3

      You won't believe these 7 money-saving tips!

      1. Have you been invoiced for a service you agreed to? You can save heaps of money by… wait for it… NOT PAYING THE INVOICE!

      edit, the below is actually from his blog. Slow learner?

      https://ausfinancetoday.wordpress.com/the-bull-the-fox-and-t…

      Speaking from a merely technical point, here is where we made two critical errors. We signed an unconditional contract without a subject to finance clause & without having a lawyer to look at the contract.

  • chumlee on 21/02/2019 - 14:53
    +2

    Offer to pay half as the property didn't sell and your availabile funds is low.

    Real estate agents can only sell property in boom times. In slow times like today they don't realise they have to do more than open the door, take names down & bring an auctioneer on auction day.

    • PAOK11 on 21/02/2019 - 14:55
      -2

      ^This couldn't be more accurate. Along with the classic "it's not selling, drop the price"

      • HighAndDry on 21/02/2019 - 16:06
        +5

        Do you know literally nothing about the current property market?

  • Donaldhump on 21/02/2019 - 15:42
    +2

    why did you agree to pay a real estate money to market, there is no incentive to really sell then…..

    you should have said no, you can take it out of the commission.

    real estate agent will tell you all sorts of cr*p trying to get you to buy the most expensive marking package, they are sales people…

    how much we talking here, and why you delaying, you will achieve nothing

    • PAOK11 on 21/02/2019 - 15:46

      Good-luck negotiating that. The marketing stuff is ingrained in the industry. People are happy to pay it, so they keep charging it.

      • Donaldhump on 21/02/2019 - 15:48
        +2

        use a jenman agent, never had a problem

        • ihbh on 21/02/2019 - 16:27

          The system has its strengths and weaknesses, and some agents have evolved their approach over time, but others haven't.

          Out of interest, what kind of markets did you sell in when you were exposed to the Jenman agents?

          PS: Jenman sold out to Pittard.

    • [Deactivated] on 21/02/2019 - 16:01
      +2

      I've tried that and 9/10 REA courteously told me to get flucked. Silent L.

      Still, that's where the 1/10 has their place.

    • HighAndDry on 21/02/2019 - 16:31
      +3

      Lots of interesting ideas here, but just firstly:

      why did you agree to pay a real estate money to market, there is no incentive to really sell then…..

      Marketing is usually a few thousand at most. An agent usually stands to make tens of thousands in commission. I'd say that constitutes fairly strong incentive to sell.

      But more interestingly:

      real estate agent will tell you all sorts of cr*p trying to get you to buy the most expensive marking package, they are sales people…

      Since you want a good salesperson as your agent, would you really trust a sales agent that couldn't even sell you on a few thousand dollars worth of marketing, to sell your property worth hundreds of thousands of dollars?

  • sheepzpal on 21/02/2019 - 16:03
    +1

    "The property has not sold in 4 months": This is good news for first home buyers?!?!? Prices will need to be dropped further! I don't really care about your payment issues. That's not my interest atm.

    • PAOK11 on 21/02/2019 - 16:05
      +2

      its not all good news for the first home buyers. Tightened lending standards

      • Herbse on 21/02/2019 - 18:12
        +4

        That is good news. People who can't prove to be able to pay their loan in case of a recession or countrywide job losses shouldn't get big loans.

      • burningrage on 21/02/2019 - 19:04
        +1

        Thats the first +1 for you as at 7.02pm after probably multitudes of negs you are getting.

        I think you should pay the marketing cost when asked. The agent has done the work it is only just to be paid even if the property is yet to sell.

        Thats why if I own properties I wouldn't sell but in VIC, you will be taxed more for vacant properties.

      • virhlpool on 23/02/2019 - 13:50

        Tightened lending standards affect investors and multiple property owners far more than struggling first home buyers. It's still good news for the first home buyers as competition will be low.

  • Traveller107 on 21/02/2019 - 16:10
    +1

    I've had many properties sold with marketing to be paid upon successful sale of the property in special clause. None of these have been jenman approved agents but your usual raywhites, place and some boutique firms.

    Only ever had one agent decline the condition(just last year), still gave her the business as she had a monopoly in the suburb and she's the only agent whose ever failed to get us a contract. Relisted with another agent with our usual marketing to be paid on sale clause and sold in two weeks above asking.
    I've realised REAs care factor becomes 0 if they're not personally(financially) invested in the sale. Cheers!

  • ChatCPT on 21/02/2019 - 17:33
    +8

    OP getting rekt. OzBargain never fails to entertain

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