Auction Fall Through

The Sellers stated that they had not authorised the Agent to accept a conditional offer at auction. Furthermore, upon the Buyer’s withdrawal the Sellers were also unhappy that the Agent had not pursued the Buyer to obtain the deposit monies and accused the Agent of providing the Buyer with preferential treatment contrary to their best interests.

The Sellers argued that if the deposit had been taken this would have been split equally between them, the Agent and the Agent’s partner Agent, meaning they would have received £1,000 each. They requested the Agent pay them their share of the deposit along with compensation for the costs of selling to a different buyer. The Sellers also stated their view that had the deposit been paid, the Buyer would not have withdrawn from the sale.

In response, the Agent explained that on completion of the auction they requested that the Buyer pay the deposit, adding that upon refusal the Buyer also informed them that his offer was subject to completion of a survey, and that this was communicated to the Sellers at the time. The Agent pointed out that under the terms and conditions of the auction agreement the Buyer was not bound to exchange contracts immediately and could have only been pursued for the deposit monies of £3,000. As such, they had decided not to pursue the Buyer through the courts for the deposit as it would be commercially unviable and instead offered a goodwill gesture of £1,000 to the Sellers to reflect their share of the deposit.

The Sellers rejected the Agent’s offer and escalated their complaint to TPO.

The Investigation

The evidence provided indicated that the Buyer had secured the property under auction for the reserve price but did not pay the deposit of £3,000. In addition, the Buyer added the condition that his bid was subject to a satisfactory survey being conducted. The Agent then granted the Buyer access to the property and a survey was undertaken. The Buyer subsequently withdrew from the sale upon receiving the results of the survey.

The Agent’s file notes showed that the Buyer had informed them two days before the auction that their bid would be subject to a survey of the property and that this had been passed on to the Sellers. The file also showed that the Agent had sent two messages to the Buyer on the day of the auction requesting payment of the deposit but had also allowed them to gain access to carry out a survey.

The Outcome

Upon consideration of all the evidence, the Adjudicator was clear that it was the Buyer’s decision to withdraw from the transaction and that this was not caused by the Agent’s actions, and that, despite not taking the deposit, the Buyer had not received preferential treatment. Whilst the Buyer was compelled to pay the deposit, the Agent could not force the Buyer to do so unless they took legal action. Furthermore, due to the legal costs and time this would have taken, it was not unreasonable for the Agent to take a pragmatic view that this was not the best course of action.

In the circumstances, the Adjudicator concluded that had the Agent taken the deposit from the Buyer, the Sellers would have only received £1,000. As such, an award of £1,000 was made that reflected the goodwill offer previously proposed by the Agent. For the same reason, the Sellers’ claim of compensation for actual financial loss, after selling the property to another buyer was not supported.