Estate agent looking for a deposit to take property off market

amnblog

This is not standard practice - apart from on new build property.

EA Code of conduct

In England, Wales and Northern Ireland




9a As a general rule, you should not take pre-contract deposits, which have no validity in

law and can give consumers a false sense of security. However, in the case of new home

sales, you may take into account specific instructions from sellers. If a deposit is taken,

then a written receipt must be given, and the circumstances under which the deposit is

held and any interest accrued are refundable, must be clearly stated in writing.

9b You must not hold a deposit, or any other money belonging to a seller or buyer client,

unless you are covered by adequate insurance.

9c Any money held must by law be in a separate client account or accounts, as set out in the

Estate Agents (Accounts) Regulations 1981. You must be able to account immediately

for all money you are holding on behalf of a client.

9d By law you must not deduct any cost or charges from any client's money you hold, unless

your client has given you written authority to do so. You should ensure that your client’s

authority is obtained at the time of the deduction or that you give your client sufficient

notice prior to the deduction to object to it.

NYM

Non-refundable deposits are more common in a booming house market. Sellers may ask for them because they are worried that, if you pull out, they will have incurred costs and lost other potential buyers. However, unless the terms are well negotiated, there is the potential for you to lose that deposit because there is a problem with the house, whether the seller knows about it or not.

The exchange and completion process in England and Wales is by no means perfect. Both buyers and sellers face the potential of the other party withdrawing from the sale for no good reason, leaving them with legal and other costs. In this situation, and with estate agents pressuring you, it may seem reasonable to pay money to secure the property. However you should remember that the system also operates on the 'caveat emptor' principle - basically, if there's something wrong with the house or the legal title, it's the buyer's problem.

The formality of exchange of contracts operates to protect the buyer - although you may have agreed in principle to buy the house, until you exchange contracts you are under no legal obligation to do so. This period between acceptance of offer and exchange allows you and your legal advisors the time to investigate the property and the Register of Title at the Land Registry to see if there are any potential problems.

If you do not negotiate the terms of a non-refundable deposit properly, you could face the situation where the seller knows there is a problem with the house or the legal title but gets money out of you anyway, or where the seller is able to withdraw from the sale, though you would lose your deposit.

If you do negotiate the terms properly, it is likely (unless both sides and their solicitors are very quick) to take about a week to negotiate, sign and put in place. During that week the seller should have been able to provide you with everything you need to submit your searches and book your survey. If it is is not enough for the seller that you have paid for those two costs, you should be questioning their motives.

http://www.actlegal.co.uk/faq/buying-house-faqs/1/

I wouldn't pay

bebewoo

Psyco, what are you talking about, it's not standard at all when buying a house. I think you are confusing buying with renting.
Loopylouie, don't pay it, it's outrageous.
I would be really really angry if my estate agent had done this sort of thing and put off buyers.

amnblog

NYM wrote: »

Non-refundable deposits are more common in a booming house market. Sellers may ask for them because they are worried that, if you pull out, they will have incurred costs and lost other potential buyers. However, unless the terms are well negotiated, there is the potential for you to lose that deposit because there is a problem with the house, whether the seller knows about it or not.

The exchange and completion process in England and Wales is by no means perfect. Both buyers and sellers face the potential of the other party withdrawing from the sale for no good reason, leaving them with legal and other costs. In this situation, and with estate agents pressuring you, it may seem reasonable to pay money to secure the property. However you should remember that the system also operates on the 'caveat emptor' principle - basically, if there's something wrong with the house or the legal title, it's the buyer's problem.

The formality of exchange of contracts operates to protect the buyer - although you may have agreed in principle to buy the house, until you exchange contracts you are under no legal obligation to do so. This period between acceptance of offer and exchange allows you and your legal advisors the time to investigate the property and the Register of Title at the Land Registry to see if there are any potential problems.

If you do not negotiate the terms of a non-refundable deposit properly, you could face the situation where the seller knows there is a problem with the house or the legal title but gets money out of you anyway, or where the seller is able to withdraw from the sale, though you would lose your deposit.

If you do negotiate the terms properly, it is likely (unless both sides and their solicitors are very quick) to take about a week to negotiate, sign and put in place. During that week the seller should have been able to provide you with everything you need to submit your searches and book your survey. If it is is not enough for the seller that you have paid for those two costs, you should be questioning their motives.

http://www.actlegal.co.uk/faq/buying-house-faqs/1/

I wouldn't pay

This may relate to solicitors and sale contracts, not an agent trying a fast one.

kingstreet

It sounds like a clever wheeze to get your EA fees upfront.

You hold enough to cover your fees then ask the vendor's solicitor to adjust the draft completion statement, so the purchaser's solicitor sends less money.

Loopylouie

I will contact estate agents tomorrow and quiz him. Will let you guys know the outcome. Thanks

amnblog

Tell him 'NO' Louie.

Dave_Ham

Ask the EA if they are regulated to hold client money.

Furthermore ask them for terms and conditions, for example should the valuation report bad condition and unrealistic purchase price and you therefore pull out, is it refunded.

As suggested, just tell them no chance