# who pays the auctioneers fees



## 60watt (25 Jun 2007)

I have recently been approached by an auctioneer who wants to buy 3.5 acres of my farm land on behalf of a adjoining business. I  never had any intention of selling this land, however I have decided to accepted this offer.  Today I got a letter from the auctioneer charging me 1.5% of the sale price. Considering that he approached me and there wasn't even a for sale sign erected , surly the purchaser should pay the fees. Who pays the auctioneers fees ?


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## CCOVICH (25 Jun 2007)

Normally the seller.  You should really have asked about fees upfront.


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## ClubMan (25 Jun 2007)

Did you ever sign anything engaging the auctioneer to provide a service? Have you queried the invoice with the auctioneer? Is s/he a member of the IAVI or IPAV who have codes of conduct for their members?


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## 60watt (25 Jun 2007)

My point is I never engaged the auctioneer, I never event dreamt of selling any land until he came knocking on my door. And now he wants me to pay for something I dont even want to do. Nothing has been signed yet. I can still refuse to sell.


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## CCOVICH (25 Jun 2007)

He offered to find you a buyer and you accepted their offer, no?

I'm not sure if there are professional guidelines for auctioneers against cold calling?

Of course you can still refuse to sell-but are you not cutting off your nose to spite your face somewhat, i.e. losing out on a (potentially) significant gain for the sake of 1.5%?  

It might be no harm to ask for a reduction in the fee at least.

The IAVI have some interesting reading on r, but of course they are a vested interest.


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## ClubMan (25 Jun 2007)

I assumed from the original post that the auctioneer him/herself was the buyer! Maybe the original poster can clarify?


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## 60watt (25 Jun 2007)

The auctioneer is not bying the land, he made the offer on behalf of the businessman who apparently wants to expand his business.


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## ClubMan (25 Jun 2007)

Ah - that's different then and I would expect you to be liable for some costs so. However it really should have been made clear to you at the outset that this might be the case. Did this not happen?


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## Murt10 (26 Jun 2007)

The cheek of them. Hese's something that may be of interest from the ALDI.ie site

"Corporate Property....

We are actively seeking sites:...

We offer:

1.5% introductory commission to agents (terms and conditions apply); 50% on exchange, 50% on completion......"

ALDi are actively looking for sites. They pay the person who finds the site a commission of 1.5%. This is exactly the same type of senario as the OP described. I'd be dammned if I would pay their auctioneer anything in this case. In fact, I'd go further and go straight to the seller and tell them that I was not prepared to have anything further to do with their greedy auctioneer and would deal with them directly myself or not at all. 

They want something particular that only you have. You are the only one that can supply it to them. Its not a generic good like a car where one is much the same as another. They need your particular piece of land and the sale cannot proceed without you.

Also you might consider going to another auctioneer and getting him to put it up for sale for you maybe by by auction. As you said there were no for sale notices on your property and no advertisements in the papers etc. Would it be be possible that someone else, other than the original purchaser, was not aware that  your land was for sale and might make an offer that would cap the previously agreed price. Have you had an independent valuation carried out on your land. are you looking at the agricultural value or would you be in a position to know what the true market value if the land were put to a different use

I would imaging that at the very least this will result in the auctioneer getting a very sharp slap for being too greedy.  Charging both the seller and the purchaser 1.5%. Nice work if you can get it, but then again when it comes to greed and auctioneers, they are inseperable.



Murt


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## gonk (26 Jun 2007)

Murt10 said:


> The cheek of them.


 
Agree 100% Tell the EA to whistle for it.


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## Bronte (26 Jun 2007)

I was in the same situation as you, auctioneer contacted me as he had a buyer for a property I was not selling.  Negotiated price back and forth and then he said I'd have to pay his fees of x.  I said ok as long as you get me price y which he did and I was very happy to pay him having made sure the price I got was sufficient to include his fees.  Don't know if the other side paid him for getting the property as well - it was a builder, as far as I'm concerned that's between them.  The auctioneer may have approached me first but I was willing to sell and the auctioneer is not going to work for nothing.  I recommend your selling price include the auctioneers fees and then you won't be at a loss.


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## gonk (26 Jun 2007)

Aileen2 said:


> I recommend your selling price include the auctioneers fees and then you won't be at a loss.


 
Doesn't this amount in a roundabout way to the same thing as saying the buyer must pay? And if done this way, the buyer will also have to pay stamp duty on the OP's payment to the EA.

The EA has absolutely no right to expect to be paid a fee without ever having mentioned it, still less the scale of fee in question, prior to presenting his invoice.


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## CCOVICH (26 Jun 2007)

Murt10 said:


> I'd be dammned if I would pay their auctioneer anything in this case. In fact, I'd go further and go straight to the seller and tell them that I was not prepared to have anything further to do with their greedy auctioneer and would deal with them directly myself or not at all.


 
That's all well and good, but the auctioneer would still be looking for fees anyway-see the IAVI link above-and I'd imagine they would be willing to sue to get it.


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## CCOVICH (26 Jun 2007)

gonk said:


> The EA has absolutely no right to expect to be paid a fee without ever having mentioned it, still less the scale of fee in question, prior to presenting his invoice.


 

If someone called to your door, and offered to clean your windows, even though you weren't actively seeking to have your windows cleaned, would you be shocked when they asked you to pay when finished?


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## gonk (26 Jun 2007)

The EA had no agreement with the OP, written or oral, to pay any fee. In the absence of such agreement, it would have been perfectly reasonable to assume the prospective buyer was paying. As Murt10 has pointed out, this would not be at all unusual. The EA is obvously trying to have it both ways. How could the EA sue to enforce a non-existent contract?

The analogy with a window cleaner is weak. If someone called asking if I wanted my windows cleaned, it would be obvious they weren't acting for some third party who thought my windows looked a bit dirty. The first thing I would ask (assuming I might want them cleaned) is "How much?"


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## CCOVICH (26 Jun 2007)

I'm not a solicitor, but it certainly looks like there may be implied offer and acceptance in this case-I'll leave it for someone with a legal background to give their opinion.

And the seller may have a list of interested buyers on their books-that's not unusual at all either. There is no cost to me (the buyer) if I approach an auctioneer/EA and tell them I am interested in any land in the area that's not actually for sale. So I wouldn't necessarily assume that the auctioneer is being paid by the buyer.



> The first thing I would ask (assuming I might want them cleaned) is "How much?"


 
Yes, as would I-but that didn't happen in this case, did it?

The established practice is that a seller pays auctioneer's fees-no harm in challenging that of course.


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## sheena1 (26 Jun 2007)

My interpretation of this would be that the adjoining business wanted to buy this land as it is adjacent to thier existing premises. They asked the auctioneer to approach the OP. While normally auctioneers are asked to sell property, in this senario they were asked to negotiate a purchase for the adjoining business so they were hired by the business. The OP did not ask them to sell their property and imo an implied contract cannot be implied IMO. I would not pay them. Can the OP clarify if the auctioneer is also getting paid by the purchaser as I would imagine that he is? If the OP refuses to sell should he still be liable for the costs of the auctioneer? The established practice is that the seller pays the fees however the normal senario is that the seller engages an auctioneer to sell their property. In this senario the purchaser engaged the auctioneer to effect a purchase (and not a sale).


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## money man (26 Jun 2007)

The auctioneer was hired by a client ( adjoining business) to purchase land on their behalf. He is representing them in the transaction and is obliged to get them the best deal possible. He approached the neighbour and purchased the land on behalf of the business for the lowest price he could negotiate. He did not represent the vendor, was not hired by the vendor and did not have the vendors interests on his mind while purchasing the property for his client.  It would be a clear conflict of interest in this case for the auctioneer to represent both parties and be paid by both. He may be chancing his arm on behalf of the purchaser  but he is liable for all fees (generally including legal fees too as you did not seek to sell the land) . It is ridiculous to simplify this down to a similar service as cleaning windows. Where clearly the person is engaging the services for a fee. If they agree to have them done then they pay. Im sure if you ask the IAVI they will tell you that there would be a conflict of interest if the auctioneer was trying to represent both parties. If the OP threatens to pull out of the transaction if it is not too late im sure this bill would not be long disappearing.


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## therave (26 Jun 2007)

i would agree that the auctioneer should not be paid by you but by the purchaser in this case..
i would suggest approaching the purchaser and asking what their arrangemnet is with the auctioneer and aslo advising the auctioneer that the deal will not be proceeding because of the fee,mentioning after all that this was an unsolictied approcah from him to you..
the auctioneer has some cheek


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## money man (26 Jun 2007)

Is this a rip-off? (sssssshhhhh!! quiet!!)


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## Ham Slicer (26 Jun 2007)

CCOVICH said:


> If someone called to your door, and offered to clean your windows, even though you weren't actively seeking to have your windows cleaned, would you be shocked when they asked you to pay when finished?



If someone called to your door and told you a local businessman would like all the windows in the area to be clean and would you mind if he cleaned your windows, you be shocked when they asked you to pay when finished?  

I would.


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## CCOVICH (26 Jun 2007)

I would ask _who_ was paying.  Beware Greeks bearing gifts etc.


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## money man (26 Jun 2007)

The fact of the matter is that both the vendors and purchasers interests cannot be served by the same auctioneer. I would tell the auctioneer to get his fees paid by his client who hired him and whos interests he served by acquiring the land. Its easy see why your local businessman is expanding and acquiring more land if he is able to get others to pay professional fees for him! He is chancing his arm by telling the auctioneer to bill you!!


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## gonk (26 Jun 2007)

CCOVICH said:


> I would ask _who_ was paying. Beware Greeks bearing gifts etc.


 
I'm a self-employed consultant and in some cases the service I provide is on a results-oriented basis with a percentage based fee. In no case would I proceed to provide service without having explained in detail the fee structure face-to-face with the client and then having a signed service agreement in place detailing the agreed fee. If I didn't do so, I would have no great expectation of getting paid for my work.

Assuming the EA is not just plain stupid, he was chancing his arm in presenting an invoice without making clear in advance for whom he was acting and what the scale of fees would be. He is trying to present the OP with a _fait accompli_ and hoping the invoice will stick. I also agree with the other posters that there is a glaring conflict of interests.


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## smurf (26 Jun 2007)

Some very good advice here so far......Chancer. 

Has the business owner the opportunity to expand on 'the other side' or can they only expand on your side. If its the latter you are in a strong position to stall the sale, engage your own EA and place the land on the open market and let the market dictate the price you may have more than one potential purchaser, healthy competition = healthy price

play hard ball, with the EA, open a communuication channel with the business owner highlight your concerns and that this is not the way you do business. Then wait. I imagine that soon after this interaction the EA will come back apologetic ........... tell him/her the deal is off, put it on the market


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## money man (27 Jun 2007)

60watt could you let us know how you get on...you have got some pretty good advice here.  Dont forget to come back and let us know how it finished up. If you tell him to do a runner you will hear no more about it.


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## smurf (2 Jul 2007)

Any update?


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## waxer (5 Jul 2007)

gonk said:


> The EA had no agreement with the OP, written or oral, to pay any fee. In the absence of such agreement, it would have been perfectly reasonable to assume the prospective buyer was paying. As Murt10 has pointed out, this would not be at all unusual. The EA is obvously trying to have it both ways. How could the EA sue to enforce a non-existent contract?
> 
> The analogy with a window cleaner is weak. If someone called asking if I wanted my windows cleaned, it would be obvious they weren't acting for some third party who thought my windows looked a bit dirty. The first thing I would ask (assuming I might want them cleaned) is "How much?"


 
Gonk, this is a top class demolition of a poor analogy...priceless ! ;-)


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