Real Estate Director Demanding Marketing Costs

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.

Comments

  • Depends what your Sale agreement says my friend.
    What did you agree with the agent?

    Sale agreements usually state that marketing costs are only be payable upon sale of property or on withdrawal by the vendor before the agreement period exires.

    However if the property does not sell within the sale agreement period because offeres were not received within the agreed sale price range then the contract ceases and no marketing costs are payable.

    Again I must stress to review your sale agreement as this will stipulate if and when marketing costs are payable and exactly how much is payable.

    OP may wish to scan and upload the sale agreement so we can check the agreed conditions (remove agent, OP name and address first for privacy reasons)

    • Payment is required upon issuing of the invoice. Approved form by the REIV

      • Well then you are obligated to pay marketing costs to the agent.
        The invoice will have payment terms….Maybe 7 days, 14 days or 30 days.

        I doubt the agent will take legal action against you for paying late but its best to work something out with the agent.
        Suggest paying at the end of the contract period if the property does not sell.

        You can always force the issue by suggesting you will withdraw the property from sale if you are required to pay the marketing costs before anything comes to a conclusion.
        That the way agent shoots himself in the foot because he loses the sale and unlikely you will sign up with him again.

        Note however you cannot sign up with another agent until the sale agreement period expires.

        I should add that standard sale agreements run for 60 or 90 days so you are well past that and the agent is probably entitled to his costs.

        • +1

          Thanks for the detailed response. You are spot on.

          • +4

            @PAOK11: Next time negotiate the following terms regarding marketing expenses:

            Either the agent pays 100% of the marketing expenses

            OR

            Marketing costs are only be payable upon sale of property or on withdrawal by the vendor before the agreement period expires.
            If the property does not sell within the sale agreement period because no offers were received within the agreed sale price range then the contract ceases and no marketing costs are payable.

            And never enter a sale agreement for more than 60 days

            Yes you can do that!

            And commission is also negotiable so BE BOLD!

            • @Amayzingone: Thanks I'll refer back to this when i'm negotiating with my agent. I guess these agents get you anyway. If they are going to lose money on marketing all of a sudden the property is worth 10% less

              • +1

                @PAOK11: They are more realistic on valuations when its thier marketing money on the line!
                So maybe YES! But a higher probability of selling too.

  • +1

    These days marketing is often at a fixed cost, in part as the relationship between the agents and the advertising outlets can be quite complex (dependent on volumes by the entire franchise etc). In those circumstances the marketing is usually payable immediately.

    If the contract doesn't state a timeline for payment, a "reasonable" time would be implied, and 4 months is way past reasonable.

    Pay the money ya muppet - i'd be cranky too.

  • -1

    Should have gone with purple bricks

    • +1

      Um, Purplebricks upfront fee payment structure doesn't seem compatible with OP's "views" on paying invoices when they are due and owing lol

      • You can actually defer the full amount until settlement. I recently sold via Purplebricks and had the option to do this. Did not pay them a cent until settlement.
        Although personally I don't recommend Purplebricks based on my experience with them.

    • FULL Upfront payment with Purple Bricks whether you sell or not.
      Bad choice!
      Especially in a soft market such as we have where vendor expectations may exceed buyer expectations.
      Plenty of people getting burnt with Purple Bricks at present

      • You're right, i was only joking.

      • Plenty of people getting burnt with Purple Bricks at present

        What should sellers do, let the agent incur the costs, while they kick some tires?

        Sellers could be burnt in a much bigger way: e.g. Seller wants $1m, buyers only offer $800k, buyer pulls out of sale and hangs on and thinks his property is worth $1m, but puts it on the market a year later and only gets offers for $700k. Obviously if he holds on for years or even decades, he can the price he wants, but there are significant holding costs.

  • Coming from a diff country so not only do you have to pay a pretty high % you have to pay for the marketing too .. blimey!

    How much is it ? surely its the cost of photographs and advertising on RA .. unless you got pamphlets etc printed up as well ?

    • +1

      Ever seen those big colour photo signs in front of a house for sale? They aren't printed with a $60 inkjet.

    • Not necessarily…..
      Its all negoatiable.

      Just that people fail to compare and negotiate the best deal for themselves.
      I put my property up for sale last year.
      I let the agent call the shots on the price.
      The agreement stated marketing costs ($1,000 in my case) were only payable upon settlement of the sale OR if I withdrew the property from sale before the sale agreement period expired - and the period was negotiable too!

      Neither occurred so i paid nothing!

  • +1

    Most of agents require marketing upfront these days. Some still charge when they sold the house or when you decided to pull out from the market or as agreed between you and the agent.

  • I've engaged 3 agents in my life (QLD). All 3 required marketing costs to be paid prior to the marketing campaign commencing.

    Unless you are using some backwater agent the timing of payment will be in your contract.

    Even if your agent did not require payment up front, I'd be shocked if payment did not fall due inside 4 months.

    Pay up OP.

  • +1

    I imagine that your place not selling is largely due to the real estate agent not giving a rats clacker about your place because you have not paid!!!

    • bit of a leap as they'll miss out on commission. In fact if it sold the marketing saga will also go away.

  • From reading the other comments it seems clear that you need to pay this amount - I would also assume that perhaps you are unable to as you were assuming you could use the funds from the sale that doesn't seem to be happening. Take this as a lesson not to engage other parties for services if you do not have the funds to pay them upfront or to include this as part of the contract for said services (conditional upon the source of funds).

      • +5

        You came onto a public forum asking for advice. What kind of "lawyer" did you think you were going to get?

  • +1

    Link on realestate.com.au or it never happened.

    • -1

      lmao no way

      • +1

        I really don't understand why all the continued comments & energy are going into this thread. Just read your contract in future before you sign like millions of us do & pay up the monies owed. Stop wasting everyone's time looking for a way out. Seriously……..

  • Where are you trying to sell your property? Which country? In most European countries they don't take any money upfront for their work. For example if I want to put out property for sale in Côte d'Azur, France nobody will charge me anything before it is sold officially. They take either fixed price or certain % from the total price. And it doesn't matter if they showed the house once or 100 times.

    • I'm curious about other arrangements in other countries. What % of total price, for particular price range?

  • -1

    If anyone threat me with legal action for anything less than 10k,I will stop any negotiation and let the person to proceed with anything he wants. Based on the past experience, persons threats legal action always get nothing from me.

    In your case, I think you can ask the agent to delay the marketing fee invoice until SOLD or March 19.

    • invoice until SOLD or March 19

      Take a step back and look at it this way. It's less than a month that you suggest he has to pay the marketing costs. Why put the agent offside when you want him to be working in your best interests?

      • Did you read the post? The agent and director are both clearly offside, based on them coming to my house and threatening me with legal action.

        • I meant based on his suggestion pay now or pay earlier of (when sold or March 19), it's less than 1 month. You'd save nothing in interest, but there would be better goodwill.

  • -3

    It depends on the sales agreement normally you pay the marketing once the property sells or if you terminate the sale.

    If i was you i wouldnt pay jackshit until those terms where met but if there is a clause that says you have to pay marketing regardless of time of sale or sale termination then you really have no choice

    If anything i would be more reluctent to pay the prick if i terminated the sale let them take you to VCAT and argue he didnt do a good job, over quoted etc you will still have to pay marketing but he will have to pay VCAT and chances are you will be given some sort of discount on the serviceyou sale just pay s if you can argue they didnt do the job right

    IF you sale then just pay them what you owe

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