Hello,
I’m new here and was reading through the forum already for 2 hours now, but still can’t find a definite answer.Thing is, our house is for sale as open listing with an agent and now there is a guy, who asked us, if we sell do a option to buy contract with him.
(1) Is it ethical to sell “behind the back” of our agent? I mean… The guy saw the sign on the house and asked us and it was because of the agents sign there – what do you think?
(2) He explained it like that: He is no agent and he does not want to work for us / sell the house for us. But instead of buying from us and selling it further to somebody else (additional taxes/stamp duty he said – is this right?), he is looking for a buyer and the new buyer makes the real estate contract then with us. So he said, the “Purchase Option Agreement” is to give him the ability to search for a buyer and sell the option to the buyer (his profit) and the buyer then buys the house form us through a “normal” real estate transaction with us, like if the new buyer had come directly to us, he just paid to be able to buy. To me it sounds like what agents do, is this legal????
(3) Is the only disadvantage we do have really, that in the period the option is valid, we cannot sell to somebody else without paying him a little fee for breaking the option contract? (it’s included in the option) If so, it’s just like if we agree and he sells it, we get the price we want now and if he doesn’t sell it, the option becomes valid and we still have the house and paid nothing, but he had the trouble searching for a buyer? I mean, he doesn’t want any fees from us for marketing / searching like an agent – what do you advice please?
So please be nice and give us your advice, it sounds pretty interesting, as the house is for sale since 8 months now and we had not really many inquiries… So if he sells it, we are happy and don’t care if he earns good money – the agents would do also, if they would sell, so thing is just, is it legal to do this for him? I thought only agents can sell houses, but I have no big idea about real estate laws I must say. And if he does not sell, he had his expenses, but not a cent from us (sounds the best part nearly to me, as our agent always wants something
) and we still have the house then to sell – please I have written very much, but it is really a thing we want to do, but in advance get your opinion, because this forum seems so full of informed people.IN ADVANCE: THANK YOU FOR YOUR HELP!!!
Monique
Queensland near Brisbane (does it matter for legality of this option thing?)PS: In short I understand it like this: we make a contract to sell the house in a certain timeframe with the option agreement and he can decide if he wants it until the end of this timeframe or not – so no risk beside waiting for us – right? not? legal?
HELP!HI there
in relation to your first question – whilst you can source a buyer from anywhere – you will still be liable to pay the Agent’s commission, particularly whilst the sign is out the front – you need to check the agency agreement you signed.
As to your second question – it is possible for a buyer to nominate another party as the buyer – provided it is in the option contract – your solicitor can organise that for you.
As to your third question – the only possible problem is if you have a boom in property where you are and you are stuck with the option – you have to sell at the nominated price. It sounds as if that is not likely to happen in the foreseeable future – so up to you – when you talk to your solicitor about the option contract – talk to them about a put and call option – so it is not only this chap who calls the shots – you can also “put” to him that he buys the property.thank you first, I’m still confused (sorry):
(1) we have a standard open contract with the agent, I thought only sole/exclusive contracts implement paying commission, when they are not involved in the sale
(2) I understand, well in the option contract it is mentioned, but isn’t it still the same like an agent? kind of? Or are agents not allowed to do options? he mentioned something like this, that an agent can’t do what he does because of the trade act or something (totally confused, sorry)
(3) I understand, yes this is right, if it rises we only get the price from him he says, but like said, it’s on the market for a long time already, so we are happy to get our price
What do you mean a put option? so he has to buy or what do you mean? but that wouldn’t make sense, maybe I don’t understand, what you want to advise to us, sorry – if you could make us understand better? please?
thanks however, hopefully some others maybe can advice too – what do you think?
Thanks Monique!
Hi again
just check your agreement that you don’t have to pay a commission – sometimes even open agreements can have some nasty tricks – but yes it is usual for the sole/exclusive agencies to have the commission requirementit is definately possible to nominate a different buyer if the contract permits it – even an agent could source a buyer who wanted to enter an option contract with you. I believe all the agent needs to do is comply with his disclosure requirements – to let you know about any commissions payable etc.
It may be a call option where the buyer has a right (but not the obligation) to buy the land from the seller, or a put option where the seller has a right (but not the obligation) to sell the land to the
buyer. So, in a call option the buyer has a choice whether to exercise the right and compel the seller to sell, or not. The reverse operates in a put option: the seller has a choice whether to exercise
the right and compel the buyer to buy, or not.Call options over land are the more common. They are often used in development contracts where a developer is seeing if the Council will allow his development and the developer won’t actually buy the land unless he knows that he will get approval for what he wants to do. I have seen a ‘put’ option in a contract by a seller who was an elderley chap and wanted to be able to push the sale along if he planned to leave his home (which was the subject of the development application) and move into a retirement villa. The developer then would have to make a choice if he was going to buy the land regardless.
) and we still have the house then to sell – please I have written very much, but it is really a thing we want to do, but in advance get your opinion, because this forum seems so full of informed people.
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