Do you have to pay a token money to reserve the property on offer?

ComputeAngel

Hi Guys,

I am a FTB. (Sorry, if this is a very basic question as I have a little knowledge of how things works in buying a property.) I have seen a property & liked it and about to make an offer.

Just wondering, do I have to pay any token/reseve money to estate agent to reseve the property and take it off the market?

If I have to pay anything, how much do people normally pay to reserve the property?

What will happen if I am unable to secure the mortgage or something comes up in searches and we don't proceed with purchase? Will I lose that money?

Thanks

somethingcorporate

No, unless it is a new build in which case the developer may ask for a reservation fee.

You shouldn't be paying anything to the EA, they work for the seller and will be paid for by the seller.

ComputeAngel

somethingcorporate wrote: »

No, unless it is a new build in which case the developer may ask for a reservation fee.

You shouldn't be paying anything to the EA, they work for the seller and will be paid for by the seller.

Thanks for reply. The token/reserve money I have asked for is not a "fee" for the estate agent. It is the money to take the property off the market and will be adjusted latter on in deposit?

cloo

You've been asked to pay a fee to take a property off the market? Sounds very non standard unless it's a new build, as stated above.

TBagpuss

If you are being asked for money you need to get, in writing, details of exactly what they are asking for and on what basis. It is usual to pay a deposit at the point at which contracts are exchanged, when you and the seller both become legally committed to the purchase. That goes through your solicitor, not the agents.

Reservation fees are not uncommon with new build estates but again, you need to be absolutely clear about what you are being asked for and whet it covers, and in what cicumstances it will be repaid / credited to you.

ComputeAngel

Thanks both for replying. It is not a new built property, it is an old property.

Fluffi

This is not uncommon practice where I live for perspective purchasers to have to pay a £200 "deposit" to take the property off the market in order to show sincerity, good intentions etc.

I think the idea is to stop people offering on lots of properties simultaneously or putting in offers and changing their minds a few weeks down the line.

The estate agent I sold my flat recently has this policy. However the perspective purchaser is entitled to the deposit (holding fee) back if they withdraw their offer, pull out or change their mind for any reason at all :eek: which all makes it rather pointless IMHO.

When I found out my first buyer had pulled out due to "change of mind" I was cross when I found out the estate agent wasn't going to keep the deposit (because they weren't allowed). So I told them I didn't see the point in taking a refundable deposit and told them not to bother next time. The next time we didn't take the flat off the market until the survey was booked and paid for.

dominoman

No!

You don't pay anything. You make your offer and the buyer accepts it. That is all.

If you want to be in with a good chance then 1) have your mortgage in principle agreed (you can do it online) 2) tell the agent what a good buyer you are, chain free etc 3) offer high.

ComputeAngel

Thanks everyone

princeofpounds

Agree with (almost all) the others. Do not pay anything to the estate agent. It is not standard practice, not least because it is not a fair exchange of commitment.

The way buyers traditionally show commitment is by spending money on surveys, lawyers, final mortgage applications etc. This is enough to show you are serious.

Most sellers will stop viewings (or claim to at least) on accepting an offer, although no-one is bound until exchange has happened.

dannim12345

Sounds odd and none standard but if you do want to do this, ensure you have it in writing what you are paying for, how/when you'll get it back etc.