Double settlement

[Stoney]

Hi Guy's, wondering if somone can help with this question.
I have mate(Dave) that is buying a property and will be doing a double settlement on the same day. No banks involved, cash deal.
The Vendor(Tom) has signed a Real Estate contract with a clause that states that he can sell to the neighbour(Jeff) if he wants it with no commission to pay the agent but Jeff can't buy at the moment.

Jeff is also a friend of Dave and he told him about that the property was up for sale. The vendor has said it is ok for Jeff to sign the S&P agreement and that Jeff can then on sell to Dave on the same day, Dave will put the funds into the Tom's account on that day. There is no assigment fee as they are doing it because they are friends.

I was wondering are there any legal implications of doing this. Does the agent have any rights to any commission. It has only been on the market for just over a week.

Cheers
Stoney

[Bluekiwi]

Sometimes you just have to go with your instincts, this triggers "POTENTIAL FOR DISSASTER" in my mind.

You need to run this concept through your lawyer.
Dont believe anything the agents say.

[graemeh]

I was wondering are there any legal implications of doing this. Does the agent have any rights to any commission. It has only been on the market for just over a week.

Well it's risky. If Tom knows Dave it will be hard to prove they didn't set this up to avoid paying the agent's commission.

The key probably is to have Jeff either pay no deposit or pay the deposit direct to Tom's solicitor to hold in their trust account.

If any deposit is paid to the agent you run the risk that they will take the commission and Dave will have to fight to get it back.

[PC]

When does the exclusive listing end?
Even then the agent may still be due a commission.

[Davo36]

The things people do to avoid paying a real estate agent...

It really depends (IMHO) on whether the agent has introduced Dave to the property or not. If they have told him about it and especially if they have taken him there, then he should be buying via the agent. And the agency would have a genuine reason to claim commission.

If Dave has not dealt with the agent at all, then this may be doable - but if it's a sole agency and Jeff does not end up the owner then really commission is still payable and the agency would have grounds to sue.

I dunno, why do people sign up with an agent and then try to go around them. If they want to sell the house themselves they should simply do that.

[Stoney]

Thanks Guys, Yes Jeff is not paying a deposit, and the funds are going straight into the Vendors lawyers account on settlement day.

Dave knows of Tom as they are neighbours so this could get a bit tricky alright. Dave has not been shown the property by the agent but was told by Jeff. Might be better to come clean with the agent and work on a deal for the commission.

And yes I agree why didn't the vendor approach Jeff in the first place without an agent. Duh !

[fpl]

What could go wrong or not the way your mate may want it to go?

Did he consider tainting?

[Stoney]

Hi Daniel, what do you mean by tainting ? he will be buying under his own name.

I don't think he has a company or trust

[Davo36]

Dave knows of Tom as they are neighbours

Is this right? Earlier you said Tom and Jeff were neighbours??

[Stoney]

Yes they are they have holiday homes next to each other