5K estate agent fee for BUYER on 220K house

TrixA

getmore4less wrote: »

Even in a sellers market it is down to what people will pay.

Yes of course, I was just questioning the argument that the introduction of an additional 2% fee on the buyer causes everyone to reduce their offers by 2%.

katejo

MattinLondon wrote: »

Yes - we're moving further and further out at this stage. But now it's a struggle to find a place within the budget 2 suburbs further out than our original spot. Places were selling within our budget in Jan, but now are £30k over...

Called about a house just now as it'd be perfect. Agent said it was 'gone, as we've had over 200 viewings and lots of offers over asking price'. Which I don't understand as it's sale by tender, with a tender closing date of 31 March.

So they have a tender closing date, but if they get lots of offers in they end it early. Great.

Sounds rather like an employer who has a closing date for a job ad but brings it forward due to the high volume of applications

katejo

googler wrote: »

Possibly, on the face of it.

But, as folks above have suggested, and from other sources, nothing is set in stone when someone in E&W makes an offer on a property - not even the price - so, all the buyer need do is secure the property, then modify their bid by the amount of the buyer's fee before exchange.

If the 'successful' buyer does this and drops the offer at the last moment, is the seller allowed to drop them and offer it to one of the other buyers who submitted a tender? If so, would the dropped buyer lose the fee for pulling out?

Personally I would try to boycott any agent using this method.

googler

katejo wrote: »

If the 'successful' buyer does this and drops the offer at the last moment, is the seller allowed to drop them and offer it to one of the other buyers who submitted a tender? If so, would the dropped buyer lose the fee for pulling out?

The buyer only pays the fee on completion of sale

http://forums.moneysavingexpert.com/showpost.php?p=64923009&postcount=17

From this previous thread - http://forums.moneysavingexpert.com/showpost.php?p=64886571&postcount=48 - it's apparent that a vendor can decide, before exchange, that they want more from the buyer, so if that's a given, then there's nothing to stop the buyer, before exchange, deciding they're not going to stick to the price they offered.

Tales abound in this forum of 'we buy your house' companies who offer £X, then drop this figure by thousands the day before exchange, by which time it's usually too late for the financially-strapped seller to arrange an alternative sale.

getmore4less

TrixA wrote: »

Yes of course, I was just questioning the argument that the introduction of an additional 2% fee on the buyer causes everyone to reduce their offers by 2%.

It will be very difficult to detect as the sample sizes are small and the variablility in achieved prices is greater than 2% so it is noise.

it just creates an instant 2% increase in costs for the buyer and pressure on how high they can offer there is 2% less to put on the table.

In a rising market this might give a blip as a one off effect if all EA did it at the same time.

As some won't there will still be competative places that will be competing for the same total money.

As most people trade property so rarely their perception of the right price is a stab in the air based on data that is dated and a guess at what others might pay.

Also in a rising market their is the runanway tendancy to overpay for the fear of it will cost more tomorrow and and we don't do it often so another £1k only £6pm.

Dave_Ham

Aside from the greed component and this is clear, I think there are other considerations.

My view is that in a buoyant market and with ease of access to online agents and with more and more "savvy" and "informed" would be sellers then inevitably more sellers will find themselves online directly to cut seller costs given such strong demand (geographically sensitive of course)

Therefore, Estate Agents are then more desirable to sellers where they are incurring no cost although sellers are probably a bit naive to what is going on behind the scenes and whether overall this is the best option for them.

KnightSmile

Just to update you all.

I have been chosen as the 'preferred buyer' aka 'top mug'. I'm pleased as I really like the property and I have arranged a second viewing later in the week.

I now just need to find a way to try and half the fee! Fingers crossed the survey picks up some minor issues I can negotiate with. The property has no chain so I don't think I'm in the strongest position but I will try my best!

Damn the help to buy scheme!! (I blame it for the flood of buyers!) I spent many years at home saving hard for a 25% deposit and lots of that money is going on fees and on the inflated house price. I'm sure I will get over it once I have moved into my own place, however, it is annoying!

Wish me luck!

KS

katejo

KnightSmile wrote: »

Just to update you all.

I have been chosen as the 'preferred buyer' aka 'top mug'. I'm pleased as I really like the property and I have arranged a second viewing later in the week.

I now just need to find a way to try and half the fee! Fingers crossed the survey picks up some minor issues I can negotiate with. The property has no chain so I don't think I'm in the strongest position but I will try my best!

Damn the help to buy scheme!! (I blame it for the flood of buyers!) I spent many years at home saving hard for a 25% deposit and lots of that money is going on fees and on the inflated house price. I'm sure I will get over it once I have moved into my own place, however, it is annoying!

Wish me luck!

KS

Good luck! Hope you have allowed for future increases in interest rates when deciding how much you could afford.

KnightSmile

thanks Katejo!

I have chosen a five year fix so looking to get the borrowing amount down during this period to try and minimise the impact of interest rates rising!

Its really not an ideal situation but living in the south east, I dont have a choice but to pay for somewhere which stretches me financially.

katejo

KnightSmile wrote: »

thanks Katejo!

I have chosen a five year fix so looking to get the borrowing amount down during this period to try and minimise the impact of interest rates rising!

Its really not an ideal situation but living in the south east, I dont have a choice but to pay for somewhere which stretches me financially.

Where in the south east are you ? I grew up in the Medway Towns and now live in north East London .