Estate Agent charging buyer finders fee?

Jaybo10

Hi all,

We are in a situation where we viewed a house that requires work but decided that we liked it enough to put in an offer. We have offered just over the asking price (not money saving I know but the market is crazy here!) in order to move swiftly and put ourselves in a good position.

We got a call from the estate agent today saying ours was the preferred bid and he will be recommending our offer to the vendor though there have also been other offers.

He then said that the agreement they have with the vendor is that they do not pay the fees, but that the fee is charged to the buyer as a finders fee. This is 1% + VAT.

I have never heard of anything like this and we are quite taken back!

We have of course asked that they send us an explaination in writing and we have not agreed to anything. However, I just wanted to find out if anyone has ever come across this before?

A search on the internet has drawn a blank though this practise does exist for 'property finders' whiich I can understand as you are paying for a service which is clearly detailed.

The amount involved is a hefty some, particularly when its not budgeted for and I am stuggling to see what I am paying for.

Further more, and this is where is gets even more strange, he has said that the vendor will sell at the asking price, and the bit that we have offered on top will be the fee.

If I didn't think this house was such a good deal/opportunity I would be walking away. But we feel it is worth investigation ..

Your thoughts and ideas are welcome!

Kind regards,
Jaybo

G_M

Pity you asked for written confirmation. You are well on the way to agreeing a contract on this basis.

Had you ignored them and just proceeded, you could have refused to pay their bill saying you have no contract with them...

I suspect if you now make an issue of this, they will tell the seller you are not a serious buyer.

Try talking to the seller direct. He may not even know about this - it is an unusual arrangement, & I suspect EA is charging you both!

Jaybo10

G_M wrote: »

Pity you asked for written confirmation. You are well on the way to agreeing a contract on this basis.

Had you ignored them and just proceeded, you could have refused to pay their bill saying you have no contract with them...

I suspect if you now make an issue of this, they will tell the seller you are not a serious buyer.

Try talking to the seller direct. He may not even know about this - it is an unusual arrangement, & I suspect EA is charging you both!

Would that apply even if we don't sign anything?

We have only asked on the phone to send us details if we were not to respond surely a charge cannot be sought?

madness, you think you are doing the right thing in getting it in writing so you can spend some time reading it, or get a solicitor to look at it and just that simple act catches you out.. *sigh*

jamie11

I would be suspicious that the agent has told the vendor that you have offered the asking price and is just intending to keep the extra, I don't know how he could get away with it though. Maybe if you speak directly to the seller you can get to the bottom of it.

chickaroonee

Property isn't near a stamp duty threshold is it?

I'd tell them to take a hike.

Jaybo10

chickaroonee wrote: »

Property isn't near a stamp duty threshold is it?

I'd tell them to take a hike.

nope, bang in the middle.

I really normally would, but it is a good house in a good location and we would not normally be able to buy this type of property if it was in good nick. I am willing, at least, to investigate the situation.

googler

Jaybo10 wrote: »

He then said that the agreement they have with the vendor is that they do not pay the fees, but that the fee is charged to the buyer as a finders fee. This is 1% + VAT.

Exactly the point - they have an agreement with the seller that they will market the house for them, try to bring in buyers, progress the sale, etc.

They don't have an agreement with you. You didn't hire them on the basis that they would find a house for you, which is the circumstance in which a finder's fee would be payable.

You need to make it clear to the EA that your offer is what it is, and that their agreement with the seller is none of your concern.

chickaroonee

Just say no then!

PasturesNew

Maybe it's a new tactic, in a busy market, to get all the houses on their books in the area and wipe out their competition.

By offering EA services "free to seller", they'd get dozens on their books.... and if you're in an area where daft money is being paid by dafter people in daft volumes, then you'll feel an urgency to "not lose it" and just pay up.

Could just be a sneaky new twist - EAs don't actually sell houses, nor do they rent them..... they make their money from the invention of stupid new/high charges people didn't expect.

cte1111

An idea - get a friend to call them and say they are thinking of selling their house, but want details of the fees. Then you can see what the estate agent usually charges.

I've never heard of the buyer paying the fee before, seems odd as you don't have a contract with them.

ACG

Jaybo10 wrote: »

he has said that the vendor will sell at the asking price, and the bit that we have offered on top will be the fee.

So you will still be buying the house at the price you offered? In which case whats the problem?