5K estate agent fee for BUYER on 220K house

googler

KnightSmile wrote: »

Also, I don't know why a seller would want to do it this way as the estate agent will not try and drive up the price as they are guaranteed their £5000 fee regardless.

Only if the sale completes, according to the wording above - which is just the same as when seller pays fees.

silvercar

googler wrote: »

http://www.oft.gov.uk/about-the-oft/legal-powers/legal/estate-agents-act/handling-negotiations#named1

"You must give your clients written details of all offers received from potential buyers. This information must be passed on promptly. It can be sent by hand, post or fax.

You should keep a written record of all offers that you receive.

If your client tells you in writing that it isn't necessary to pass on certain offers, you don't have to write in those circumstances. For example, this could happen if the client doesn't want you to write with offers below a specific price level."

Darn. If they can claim they have explicit instruction from the seller not to accept offers which aren't in exactly the form you describe, that gives them licence to ignore regular offers. And we can't tell that without seeing the (confidential) contract between seller and agent.

What is the betting that an unscrupulous estate agent would tell the seller that they had declined a bid from the buyer that tried to by pass them as they couldn't show proof of funds/ hadn't sold their property/ wouldn't be able to get a mortgage/ were known to them as messers or some other such story.

katejo

silvercar wrote: »

What is the betting that an unscrupulous estate agent would tell the seller that they had declined a bid from the buyer that tried to by pass them as they couldn't show proof of funds/ hadn't sold their property/ wouldn't be able to get a mortgage/ were known to them as messers or some other such story.

Or tried to bypass simply because they objected to conditions of bidding because of the buyer fee. I suspect that sellers who agree to this method are also being greedy.

KnightSmile

If I have the highest bid and get to the survey stage I will haggle hard on any flags to knock the cost down to try and claw back some of the fee money!

Dave_Ham

Interesting, this tactic has not taken off in Essex yet although have seen examples springing from South London specifically.

Whilst it is a joke, it feels their motivation is more than just a gimmick.

My view is that they are trying to hold on to sellers in a buoyant market, who with demand so high that many next generation sellers are hitting the fixed fee and/or internet estate agents.

Here's hoping it pushes more to the online agents, or someone changes the entire flawed process but good luck with that one...

Be interested to see how this ends, good luck

ging84

I think 5k would still land it in small claims court, which would mean you can refuse to pay and only be at risk of relatively small costs compared to the actual fee

gordonbennet

Presumably the vendors that use these agents are fully aware of what their buyer will be charged? They are probably being told by the agent, "normally we charge 2% but we will reduce this to 1% as we will claim a fee from the buyer." And then the vendor is probably asked to sign an agreement stating they only wish to be informed of offers which are submitted on the correct (signed) form.

Crazy. Not in the buyer or the sellers best interests. Only for the benefit of the agents.

DRP

I'm not sure why ea chose 2 per cent?

That is much higher than a seller would be charged - could some of the fee be an incentive to the seller to use the ea?

ging84

DRP wrote: »

I'm not sure why ea chose 2 per cent?

That is much higher than a seller would be charged - could some of the fee be an incentive to the seller to use the ea?

That sounds like a fairly fraudulent scheme to me if it is.

seller offers £100k estate agent says there will be a £2k fee for introduction
seller gets £100k + £1k so actual sale price could be considered £101k

which when you get into the realms of £250k properties with a £5k fee with some going to the seller, the sale has jumped stamp duty thresholds

katejo

Dave_Ham wrote: »

Interesting, this tactic has not taken off in Essex yet although have seen examples springing from South London specifically.

Whilst it is a joke, it feels their motivation is more than just a gimmick.

My view is that they are trying to hold on to sellers in a buoyant market, who with demand so high that many next generation sellers are hitting the fixed fee and/or internet estate agents.

Here's hoping it pushes more to the online agents, or someone changes the entire flawed process but good luck with that one...

Be interested to see how this ends, good luck

There are now at least 2 agents in Walthamstow E17 using this tactic. You say it might be to hold onto sellers but it would put me off.
Our local MP isn't happy about it.