5K estate agent fee for BUYER on 220K house

DRP

they're making hay while the sun shines .... perhaps in a few years time the market may have dipped again and almost certainly online agents will be taking a larger chunk out of high street Ea's pockets.

googler

getmore4less wrote: »

What it does change is the SDLT on the fees so there is a small saving in the overall transaction.

SDLT is payable on the purchase price, not on fees.

The SDLT can only vary if this fee structure leads to reduced offers and accepted prices around the SDLT thresholds.

getmore4less

googler wrote: »

SDLT is payable on the purchase price, not on fees.

The SDLT can only vary if this fee structure leads to reduced offers and accepted prices around the SDLT thresholds.

Which it will

The buyers only have so much money to cough up, that can't change

if the EA take a cut off the top there will be less for the vendor

if buyer pay the fee there is no SDLT on that fee

if they pay the amount they have to the vendor they pay SDLT and then pay the fees out of money that has SDLT paid on it.

being near a threshold could make a big chage but ther is the SDLT saving on the fees.

getmore4less

The other effect is it reduces deposits by the fees, which could impact the lending available

MattinLondon

We're looking in an area where almost all of the properties are now sale by tender. What choice do we have? Just not buy a house?

getmore4less

MattinLondon wrote: »

We're looking in an area where almost all of the properties are now sale by tender. What choice do we have? Just not buy a house?

It is the seller that loses,

you only have so much to spend they get less of it.

TrixA

getmore4less wrote: »

The buyers only have so much money to cough up, that can't change.

This is the same argument that's made for SDLT (that effectively the seller pays it, because the buyer will reduce their bid by the amount of the tax) and I've never really understood it. In a sellers market surely the amount people offer is mainly driven by the amount banks will lend and the amount they need to offer to outcompete other prospective buyers. In our case the amount the bank is prepared to lend us is way beyond what we would ever want to borrow, and is therefore not limiting. Affordability matters, but is subjective - it's not as though there's some exact number that represents what a particular buyer can afford, and everyone acts rationally and reduces their offer by the amount of SDLT (and in this case agent fees) payable.

TrixA

We're looking in an area where almost all of the properties are now sale by tender. What choice do we have? Just not buy a house?

Look in a different area? Try leafleting streets you like and see if anyone is interested in a private sale?

MattinLondon

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.

getmore4less

TrixA wrote: »

This is the same argument that's made for SDLT (that effectively the seller pays it, because the buyer will reduce their bid by the amount of the tax) and I've never really understood it. In a sellers market surely the amount people offer is mainly driven by the amount banks will lend and the amount they need to offer to outcompete other prospective buyers. In our case the amount the bank is prepared to lend us is way beyond what we would ever want to borrow, and is therefore not limiting. Affordability matters, but is subjective - it's not as though there's some exact number that represents what a particular buyer can afford, and everyone acts rationally and reduces their offer by the amount of SDLT (and in this case agent fees) payable.

Up front fees can restrict the lending as there is smaller deposit.

For many lending won't be an issue it will be how much they can be persuaded to part with, if putting fees on the buyer does that then it is the right thing to do as the money was there all along, that has not changed.

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