Estate Agent withdrawal fees

[Flozzz]

How common are withdrawal fees in estate agent contracts? We received ours yesterday and it has a withdrawal fee of 50% commission fee if we pull out for any reason after agreeing a sale before exchange- this is in addition to costs for marketing, photographs and other charges (>£1k).

We have no intention of pulling out of a sale after a buyer is found but chain collapses happen and there is the possibility of other factors outside a seller’s control which would cause them to reluctantly pull out of a sale/cease marketing (Ill health, job loss etc).

We have sold before and a withdrawal fee has never featured in a contract.
It makes sense for estate agents to have this as a failsafe so that they can get back any costs on marketing and the other expenditure that they’ve had to spend if a sale doesn’t go through but this feels excessive (it would be over £6k for just the 50% commission alone plus £1k of other fees)…for a sale that can’t go through.

Is this a standard practice now?

Feels like a red flag to me.

I experienced this last year.

I had three agents out to value and all had ‘ready willing and able’ clauses in their contracts. One wanted to charge a 50% fee but the other two wanted 100% of the fees. They also wanted me to pay 100% of the photography and marketing costs up front.

In the end I decided not to go to market last year but would be very wary of signing up to such an agreement in the future.

Chains fall apart for all sorts of reasons.

I did ask on MN whether other people were experiencing this issue but the consensus seemed to be no. It made me wonder whether my local agents had got together and decided that if they all added that clause to their contracts, there would be no alternative for prospective clients but to accept it.

Yes I've seen this a few times. It's to protect the EA.

It's a symptom of the marketplace at the moment.

At the end of the day if an agent puts in a lot of work to sell a place and fulfills all the sellers expectations and then the seller withdraws on a whim is it right that they should get nothing as a consequence ?

I think not.

The alternative is of course that all agency commissions get higher as a result, as the cost to the agent of withdrawals is spread across the paying customer base, which means that people who don't withdrawal on a whim end up paying more.

Find another estate agent.

My estate agent tried to pull this ready, willing and able crap with me. They wanted the sale to go through just before Christmas and rudely told me if I didn’t exchange contracts that day I’d be liable for more than their commission. They hounded me aggressively.

The buyer wasn’t ready. Didn’t stop my EA insisting I pay £3500 in full by end of the day. I had to get my conveyancer (that ironically they had recommended) to tell them we could not exchange that day.

I do wonder whether they needed my house sale confirmed for their Christmas bonus. Fuckers.

When local people ask for EA advice I tell them this tale and warn them about their contract. I’m up to 15 people taking their business to other EAs instead.

Oh and on the actual move day their shop shut at 1pm so they wanted me to hang around for the new people to arrive. They had let slip earlier that they weren’t due until 10pm! Needless to say I dropped the keys off by 12noon as required.

Never heard of this before in our area. I would definitely go with another estate agent

Then they need to operate on a fixed charge for services model (as some already do).

Charging full traditional agent commission and then adding on a whole bunch of charges for the core service (eg photographs/brochure), plus fees if a sale fails through would have me looking for alternative agents. Demanding money if it isn’t completed by their choice of date is ridiculous and I would be surprised if it conforms to their standards body requirements.

I’ve lived through more than one property crash and this type of racket didn’t occur then. Some agents moved to fixed fee up front which was transparent.