Dodgy Phuket Estate Agent?

[wordchild]

had a rather unusual experience recently trying to sell a condo I own in Phuket. One of the agents involved, not one of the big ones ( farang owned I believe) came up with a buyer.

After a fair bit of haggling (conducted via the agents Thai staff not with the buyer directly) I agreed on a price, lower than I had wanted but, as I have found, its not a sellers market right now esp for higher priced condos.

The agent originally wanted to handle everything to do with the sale but I insisted I use my regular Bangkok lawyer to do the contract. When my lawyer contacted the agent to go through the contract, he was told that the price on the contract should be stated as higher than the agreed price (about 10% more). The agent said something along the lines of this was because the buyer was a special client who they had done a lot of work for and who was happy to pay the higher price to them as commission! However I was still to get the lower price that I had verbally agreed minus the agents (already ludicrous) 5% commission. So on the face of it the agent seems to be trying to take 15% out of what is quite a large transaction amount.

The agent also tried to convince my lawyer that I had pre agreed to all this, but as this lawyer has known me for more than a decade he knew that would be unlikely. My response, via the lawyer, was fine but the price I agreed to has to be what I get net and I will not pay any additional commission to them from my side. And also that the contract must clearly state to both parties (ie the buyer as well) that this is the basis of the deal. Yet to hear back from them on this.

I have sold properties in Bangkok in the past and never come across anything like this before, anyone else come across this? is it common practice with Phuket agents?

Edited April 16, 2016 by wordchild

[grumpyoldman]

How is your lawyer in Bangkok paid in the transaction?

[Pib]

Yeap, sounds extremely dodgy to me and when the dust settles it will most likely bite "you" in the pocketbook.

Now it's not uncommon that a "seller" will want to reflect a lower sales price on the sales contract due to property tax transfer purposes, but the buyer still ends paying the seller whatever amount the agreed to price was.

[The Big Mango]

Agree with you that it is perhaps unfair that the agent is trying to make so much.

But to play devils advocate , if you were happy to accept the final amount offered before you became aware of this , and the fact you can sell your condo in the marketplace at the moment would it not be fair to say just sell it and let the agent keep the difference and be happy that its sold and to also remember tou did agree on the figure before the additonal profit to the agent was apparant ?

Just sayin ,

But to repeat , I do agree its a con of sorts

Edited April 16, 2016 by The Big Mango

[BritManToo]

Contact the buyer direct, cut out the agent in negotiations.

I bet the buyer thinks you are paid the full amount.

[LivinginKata]

It's the same with agents in the rental market. I'll give my price to the agent and the agent comes in with a client who has been quoted a very much higher price and I am told to keep my mouth shut. I've always told the agent to bugger off.

Lost some rental deals but I'm not having the agent make twice - commission from me and essentially a commission from the client.

Edited April 16, 2016 by LivinginKata

[grumpyoldman]

Net listing, where you tell the agent what you want out of the deal, above that is what they make on the deal.

Curious to me is when the third party BKK lawyer came in is where the commission went from 5-15%, unless I'm reading that wrong.

Too many crooks spoil the soup..............

[Farma]

Curious to me is when the third party BKK lawyer came in is where the commission went from 5-15%, unless I'm reading that wrong.

I read it as the agent told the seller it sold for "x". Agent fee is 5%

BKK lawyer is told by agent it actually sold for "x" plus 10%. Agent tells lawyer the seller agreed but in fact seller knows nothing about the additional 10%.

Agent is trying to pocket the agreed 5% commission plus rip off the seller for the additional 10% sale price.

Unfortunately for agent the BKK lawyer notified the seller of what was happening.

[lemonjelly]

Could it be that the Thai staff working for the agent are trying to pull a fast one unbeknown to their boss?

[grumpyoldman]

Curious to me is when the third party BKK lawyer came in is where the commission went from 5-15%, unless I'm reading that wrong.

I read it as the agent told the seller it sold for "x". Agent fee is 5%

BKK lawyer is told by agent it actually sold for "x" plus 10%. Agent tells lawyer the seller agreed but in fact seller knows nothing about the additional 10%.

Agent is trying to pocket the agreed 5% commission plus rip off the seller for the additional 10% sale price.

Unfortunately for agent the BKK lawyer notified the seller of what was happening.

But we're not privy to that conversation, correct?

"Agent is trying to pocket the agreed 5% commission plus rip off the seller for the additional 10% sale price", only after Bangkok lawyer is involved, yes?

Thus my initial question of how the BKK lawyer was to initially be compensated, as I realize this lawyer is a "trusted advisor of ten years" but c'mon, we're talking lawyers, on top of that business in Thailand.

[wordchild]

Curious to me is when the third party BKK lawyer came in is where the commission went from 5-15%, unless I'm reading that wrong.

I read it as the agent told the seller it sold for "x". Agent fee is 5%

BKK lawyer is told by agent it actually sold for "x" plus 10%. Agent tells lawyer the seller agreed but in fact seller knows nothing about the additional 10%.

Agent is trying to pocket the agreed 5% commission plus rip off the seller for the additional 10% sale price.

Unfortunately for agent the BKK lawyer notified the seller of what was happening.

But we're not privy to that conversation, correct?

"Agent is trying to pocket the agreed 5% commission plus rip off the seller for the additional 10% sale price", only after Bangkok lawyer is involved, yes?

Thus my initial question of how the BKK lawyer was to initially be compensated, as I realize this lawyer is a "trusted advisor of ten years" but c'mon, we're talking lawyers, on top of that business in Thailand.

wow I had to give you a like for that, what a theory! However I really doubt that's whats going on, as I said I have been dealing with him for 10 plus years and he has helped on all sorts of stuff not just property. Like most lawyers he charges for his time and he normally just bills me at the end of the transaction and if the sale doesn't happen then he will probably just not bill me.

[grumpyoldman]

Curious to me is when the third party BKK lawyer came in is where the commission went from 5-15%, unless I'm reading that wrong.

I read it as the agent told the seller it sold for "x". Agent fee is 5%

BKK lawyer is told by agent it actually sold for "x" plus 10%. Agent tells lawyer the seller agreed but in fact seller knows nothing about the additional 10%.

Agent is trying to pocket the agreed 5% commission plus rip off the seller for the additional 10% sale price.

Unfortunately for agent the BKK lawyer notified the seller of what was happening.

But we're not privy to that conversation, correct?

"Agent is trying to pocket the agreed 5% commission plus rip off the seller for the additional 10% sale price", only after Bangkok lawyer is involved, yes?

Thus my initial question of how the BKK lawyer was to initially be compensated, as I realize this lawyer is a "trusted advisor of ten years" but c'mon, we're talking lawyers, on top of that business in Thailand.

wow I had to give you a like for that, what a theory! However I really doubt that's whats going on, as I said I have been dealing with him for 10 plus years and he has helped on all sorts of stuff not just property. Like most lawyers he charges for his time and he normally just bills me at the end of the transaction and if the sale doesn't happen then he will probably just not bill me.

O.K., just playing devil's advocate. Would you agree (from what I understand from your post) had you agreed initially with the agent and NOT contacted third party lawyer that the agent's commission would have stood at 5% above the price you wanted?

My only point is it seems things went south (regarding commission structure) as soon as you brought in BKK. But it's all moot anyway since you'll still get the price you wanted, yes?

[wordchild]

Curious to me is when the third party BKK lawyer came in is where the commission went from 5-15%, unless I'm reading that wrong.

I read it as the agent told the seller it sold for "x". Agent fee is 5%

BKK lawyer is told by agent it actually sold for "x" plus 10%. Agent tells lawyer the seller agreed but in fact seller knows nothing about the additional 10%.

Agent is trying to pocket the agreed 5% commission plus rip off the seller for the additional 10% sale price.

Unfortunately for agent the BKK lawyer notified the seller of what was happening.

Yes I am pretty sure (and so is my lawyer) that is exactly what is going on, the seller is getting legged over here as much as I am and I am sure he is being spun all sorts of nonsense by the agent. Funnily enough the price he has "agreed" to is just a little under my recently reduced asking price. what is very irritating to me as that I have had 6/7 conversations with the agent over the last several days as she tried to get me to lower the price as her buyer would just not move according to her, when all along he seems to have been prepared to pay a price I would have been happy with at the start. Sadly I cant contact the buyer direct no contact details although I do have his name.

I have lived in Thailand long enough to know you cant be too puritanical about this kind of thing, but they were supposed to be my agent. I was proposing to pay them a very generous 5% commission for finding me a buyer at the best price they could .

[LivinginKata]

<snip>

I have lived in Thailand long enough to know you cant be too puritanical about this kind of thing, but they were supposed to be my agent. I was proposing to pay them a very generous 5% commission for finding me a buyer at the best price they could .

But there lies the problem. Every agent want more than the 5% and they don't mind some behind the scene skulduggery.

I suppose if you get you agreed price then you should be happy. If the agent beats you down and you reluctantly agree only to find your reduction is enhancing the agant's cut ... then that is very annoying. Would be a dealbreaker for me ... just on principle.

Suppose it depends on how desperate you need the money ...

[wordchild]

I would always have found out the price because it would have to be declared at the land office on transfer day and anyway I would never do any property transaction in Thailand without a lawyer drafted contract with all the terms detailed. This is what puzzles me about the way the agent behaved here because they must have known I would be bound to find out in the end. maybe they thought I would just be so grateful and not want to disturb the sale

Since my original post this morning I have spoken to someone I know in Phuket who told me that there used to be a few years ago (when the market was hot) an agent that did try to get sellers to agree a net price with no or a smaller commission before they started to market the property, and then they would make profit on the difference between that pre agreed price and whatever higher price they could sell it for. apparently it didn't really work but at least, in that case, they were being upfront about what they were doing.

[The Big Mango]

So are you going to sell it or let the deal pass by ?

[wordchild]

So are you going to sell it or let the deal pass by ?

I have offered to go ahead with the transfer at the higher price, and the agent can have (out of the proceeds) the difference between that price and the lower price I had originally agreed to. however what I wont do is pay them the additional 5% they wanted from me. I am having my lawyer draw up a new agreement between myself and the agent along these lines stating exactly what they will earn from this transaction, if it goes ahead. So, in effect they will earn around 9% not the nearly 15% they wanted, and I will get the lower price I had agreed to but save myself the agents fee of 5%. I will not go ahead on any other basis so we shall see.

Edited April 16, 2016 by wordchild

[The Big Mango]

Seems a good compromise , post back and let us know if the agent agrees , would be interesting to know the outcome

Edited April 16, 2016 by The Big Mango

[wordchild]

the lawyer is sure they will agree as they don't really have any legal basis for their claim, and he thinks it was just a try on by the agent. we shall see

[DrDave]

<snip>

I have lived in Thailand long enough to know you cant be too puritanical about this kind of thing, but they were supposed to be my agent. I was proposing to pay them a very generous 5% commission for finding me a buyer at the best price they could .

But there lies the problem. Every agent want more than the 5% and they don't mind some behind the scene skulduggery.

I suppose if you get you agreed price then you should be happy. If the agent beats you down and you reluctantly agree only to find your reduction is enhancing the agant's cut ... then that is very annoying. Would be a dealbreaker for me ... just on principle.

Suppose it depends on how desperate you need the money ...

Exactly.

I haven't experienced this myself, but I understand it happens quite often. Unlike in our home countries, many agents here work both sides of the fence (which by the way, in the US is illegal and will cause the agent to have his license revoked). Not uncommon for an agent here to sell a property at an inflated price (over the seller's listing price), then beat the seller down on price, pocket the difference and collect a commission on top of that.

I agree with LiK, this would be a dealbreaker for me too, just on principle. If an agent wants to sell my house at an inflated price and pocket the difference, then let him put some skin in the game. Buy my house at the listing price, I'll deduct your commission from the sales price, and you're free to sell it on at whatever inflated price you think you can get. Good luck with that.

[Old Croc]

I don't think there should be a question mark in the thread title.

[LivinginKata]

I don't think there should be a question mark in the thread title.

Exactly ... I don't think there is any license required to be real estate agent or property broker. Not even sure if Thai laywers even need any sort of accredited license other than their academic credentials.

I see it as a jungle out there. My first month here I used a well know Phuket law office to draw up a simple power of attorney papaer ... I paid a fee much the equivalent in my home country. My new lady was horrified, I shrugged it off but learned fast.

Since that day 20 years ago I have never used a lawyer other than a civil case on behalf of a friend who died and I engaged representation for his daughter who lived outside Thailand. 13 years later that case has still not been resolved .

I have the same opinion about accounting offices after we got burned by the 'accountant' when filing our first year company accounts. Never again .. do it ourseves and engage a BKK charted accountant to audit our accounts for these past 15 years.

The fact is that so many of these agents, accounting offices, and lawyers operate with no code or ethics. And are not regulated.

Edited April 16, 2016 by LivinginKata

[Gutenberg]

The most foreigner targeted agents have just all the same properties. If you are a buyer, just visit the same condo/house multiple times with different agent each time. After a short period, you will know that most of them try to scam you in one way or another.

[wordchild]

unsurprisingly the agent agreed, pretty much, to my proposal. They are still trying to insist that they should be the ones who handle the deposit from the buyer, which is frankly laughable, and there in no way i will agree to this after the way they have behaved. The farang (owner?) of the agency called me to apologize and tried to give me some sort of explanation (missunderstanding of my instructions) for why his staff had behaved as they did. (I suspect he may have read,or been told about, the posts on here!) I wont post again on this topic as its reached some sort of conclusion, though the property has yet to be sold. I have bought and sold 3 other properties in Thailand (all in Bangkok) and never had any issue of this sort. I would certainly be cautious about involving a small, non established agency in any property sale i do in the future.

[The Big Mango]

^^ thats seems a fair point too.

Nice post

[Pinot]

I take two things away from reading this thread:

1. Never buy property in Phuket...rent

2. See #1

[grumpyoldman]

I take two things away from reading this thread:

1. Never buy property in Phuket...rent

2. See #1

Last year you could of gotten a heck of a deal on a Surin Beach restaurant/and or club !

Edited April 25, 2016 by grumpyoldman

[1FinickyOne]

Yes, I have seen this in other places in Thailand and good for you, that you recognize that you have no friend in this deal - you are just negotiating with 2 separate entities... I thought your compromise offer was fair and the agent should take it. Everyone benefits from the deal as you stated it and nobody benefits if the deal does not go through...

good luck. I hope it works out for you and sanity rules over emotion. keep your guard up as surely you will.