Urgent help please!! EA wants to charge £6k!!

[HolidayHun2020]

Hello, so after months of searching we’ve had an offer accepted on our dream property. The Estate agent has asked for an exclusivity fee (£6k) otherwise they keep marketing the property and accepting viewings. Not sure if it’s a case of - we don’t pay it and then technically we no longer ‘have’ the property as all the paper work came through this evening on email so haven’t had a chance to ask yet. They’ve sent over the contract and if we pull out for any reason other then a RICS appointed mortgage valuation comes back low we lose the £6k - assuming this would be an independent one and not the person the bank sends round?! The money is also held in the EA bank account which feels odd.

There is a clause that says if we do not exchange contracts within the exclusivity period (50 working days) then we forfeit £6k

If we do not pay for searches within 7 days of the sales letter being sent out - we forfeit the £6k.

Has anyone experienced this before? We asked a friend of a friend and she said it is technically allowed but unethical. I now don’t know whether to proceed with this property as it makes me really uneasy - it was slightly over budget anyway so if the surgery threw up anything really bad it could be a disaster!!

There is nothing in the contract which says how the money will in theory be taken off of the sale.

As far as I am aware the Estate Agent, within reason, can set any conditions they want and charge what fees they want.
However, you don't have to accept them.
To me this sounds like something dodgy, especially as you have nothing in writing.
Personally I would walk away and then report them to TradingStandards.

How much is the house? How much do you love it.

Personally unless it is literally the dream home I’d walk away unless they dropped this. The only other thing you could do is ask your own solicitor for advice or to see if you can get some kind of insurance?

Or I suppose you could accept that you might just lose it and add it to the price. But what happens if you don’t jump through their hoops- do you lose the 6k and then the purchase proceeds, or does the house go straight back on the market and you’re barred from buying?

How much is the property? Surely this is what people are calling for, to stop the ridiculous situation in the UK where people can pull out of a property purchase at the last minute.

Either you want the property or you don't.

Jesus I'd tell them to piss off. And on a bad day I literally would swear about it. Fucking grifters.

The property is £575k - it feels ridiculous that we will most likely lose £6k for things outside our control? I.E how long it takes to exchange. We honestly don’t have it to lose!

I would try to make sure the sellers are aware of what the estate agents are doing. If you pull out, and others might pull out after the same treatment the seller might wonder what is going on.

So from what I can make out, we still proceed but we can be trumped until contract exchange and either way we lose the £6k

But if it is an exclusivity thing presumably they won’t be showing anyone else? So your only real risk is not making the exchange in time.

Is it marketed with Paul Carr?

Our house is on the market with them and they offered a similar product to us, I can't remember what they called it - guaranteed buyer or something?

But basically we would forfeit a few k of the selling price to lock in a sale and exchange. If the buyer didn't exchange then we would get the X number of k back

We said no as it would have put me off buying a property if I was told that by the EA so I figured others would feel the same

So yes, the biggest risk is not making the exchange timeframe which feels completely unrealistic as we are also selling!

It sounds like Modern Method of Auction - brilliant for agents, good for sellers, a nightmare (usually) for buyers...

It’s immoral

Yes that timetable sounds completely unachievable unless your sale is fairly well progressed. But so many things can go wrong, some at the last minute. The only way I would ever countenance this would be if I was already in a rental and even then I would seriously have to love the house. Worst case scenario you could end up 6k out of pocket with nothing to move to if someone swoops in at the last minute. I really think the stress of this would give me a breakdown.

I don’t know what the market is like around you but I’d be tempted to write a nice email explaining that you love the house and are very keen/ proceedable but can’t agree to their terms although you’ll obviously try to move things on as quickly as possible. Specifically request they give the email to the seller and maybe even put a copy through the door. Then I’d proceed with your sale and if necessary go into rental- if you genuinely can’t find something else then at that point you could consider going back to them with the money in the bank.

It might be legal but no way would I agree to that.

There is absolutely not a chance I would pay that.

Seconding. I have read these same terms before. Is it on the advert small print?

It's usually just a way for EAs to triple their fees through desperate sellers.

Drop a note through the door saying you have been asked this by their estate agent

Don’t do it. There is nothing to stop the EA doing this to several buyers at the same time and ripping them all off. Walk away.

Elsewhere in EU, it is a standard here to pay this kind of deposit (different to the mortgage deposit). A proper way to do it is a three sides agreement, so there is a specific responsibility of the seller as well (to proceed with all steps in a timely fashion, not sell anyone else, ..)

If you don't see the timeline as realistic, don't agree with it.

Exchange of contracts isn't entirely in your hands. The seller might stall! Personally I'd say arse holes to it. And let the vendor know why.

Good god £6k on a house that’s £575k??

There’s an agent near me that likes to do a reservation arrangement, and I assumed that would be say £1k (repaid on completion) with both buyer and seller being committed and tied in in some way, so less chance of the chain breaking down.

This arrangement sounds awful. I’d not pay it, the only thing different to a normal sale is they’ll continue to market it, so you do have to do your side as quick as possible. Bearing in mind the agent will still be hoping a sucker buyer comes along to pay the £6k, so they might not be acting in the seller’s best interests.

Absolutely not.

Agreed sounds like "modern method of auction" I.e capitalism gone mad. I immediately discounted all of these houses because it seems underhand and needlessly adds stress on to what is already a very stressful transaction

If it’s the house you want, and you can get it back if a survey shows issues, I would just consider paying.