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The Double Agent

8th October 2020

We are currently trying to navigate our way to get a deal.  The agent who was advertising it first gave the impression they were instructed agents, then when it came to agreeing the deal said they were not acting for the seller but would be acting for us!  They said they would need a fee from us, we agreed; then they came back and said they required proof of funds, again we agreed; and then they came back and said we may be required to pay for the sellers legal fees!

The goal posts keep changing.  It seems they do not have any control of the deal and instead are trying to control us.

Therefore, it’s time to get in touch with the actual owners or the agent who is in fact representing the owners.  Seeing as they were never acting for owner in the first place there shouldn’t be any issues.

It’s not something we like to do; I prefer to build relationship with agents.  The right ones can give you a lifetime of deal flow.

However, this doesn’t seem like the right one.  Or, perhaps it’s my approach.

Either way we want the deal, and the broker isn’t the broker, which leaves us with little choice.  There is little point in dealing with a party who doesn’t have a right to sell, or add anything to the transaction except to muddy the waters.

It is rare to meet an agent who actually knows exactly what they are selling, and secondly add value to the transaction.  Most of the time they simply push buyers and sellers together without really taking the time to understand or work with either party.

This is the typical profile of an agent – unfortunately.

Apart from the role of a pure introducer their role then becomes redundant.  This role becomes even more important when one is looking at purchasing developments, as it requires some knowledge of how a developer considers the deal when weighing up whether to purchase a deal.  I have come across agents who don’t know if they are selling a company or a property, and what the difference is to the buyer and the seller.

There is a major difference in the two.  The process for purchasing a company is far more cumbersome in terms of legal work, as you have the added layer of purchasing a company, this introduces more variables into the transaction, and therefore increases the chance of it falling out of bed.

There is the obvious stamp duty advantage for purchasing a company, however, on the flip side you will be inheriting a potential capital gain.

One does not need to be an accountant or a planning consultant, however, a basic grasp of these concepts needs to be understood by an agent in order to facilitate a sale and develop a little professional empathy for the buyer and the seller.

On the selling side, selling company shares in the right manner could save the seller a huge amount in capital gains tax.  The seller could be potentially only be paying 10% on the capital gains made.

However, from one perspective, the ignorance of the agent can be a bonus to the buyer, if the buyer understands the deal better than the agent; in other words, see angles the agent misses.

Suresh Vagjiani

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