Booking deposit for estate agency

Gep

Hi, I'm in the process of making an offer for a flat and the agency asked me for a £3000 deposit (non refundable) up front.
This is not the first property I buy and I've never heard of anything like this. I understand why they are doing it: given that the English law allows buyers and sellers to change their mind up until exchange day the agency is worried to loose their commission.
Nevertheless it sounds an illegal practice to me.
Any comment?

rosie383

Sounds as if they are trying to guarantee their fee. Strange.

hcb42

walk away..

G_M

Don't do it.

But put your offer in writing to the agent and send a copy to the seller too. Make clear your position ie cash buyer, mortgage in principle agreed, your sale agreed etc

mrginge

Under no circumstances should you consider paying a non refundable deposit to an estate agent.

Gep

Thanks for the advices guys, but:

1) I don't know who the seller is at this stage (the agency is not going to tell me...) so I can't send him a copy of the offer

2) the market is extremely competitive for buyers in London, so I'm a bit worried I might loose the flat if I don't pay

Is there a way to proove that asking for non-refundable deposit is actually illegal (maybe a link to some law website)?

fairy_lights

Do they want you to pay the fee before they will even pass the offer on to the seller?
If you pay the fee after your offer has been accepted, what would happen in the seller end up pulling out, would it still be non-refundable?
Either way I'd run a mile, it sounds like a sure fire way to lose money.

DT12

Post it to the house you want to buy. They should get it.

Gonzo1987

Is it a new build property or a 2nd hand home? And are you sure it's non refundable if it's a 2nd hand property?

antrobus

Gep wrote: »

Hi, I'm in the process of making an offer for a flat and the agency asked me for a £3000 deposit (non refundable) up front.
This is not the first property I buy and I've never heard of anything like this. I understand why they are doing it: given that the English law allows buyers and sellers to change their mind up until exchange day the agency is worried to loose their commission.
Nevertheless it sounds an illegal practice to me.
Any comment?

I've heard of non refundable deposits (NRD). I believe they are perfectly legal, but normally there's a bid more quid pro quo in the deal. The buyer pays an NRD when their offer is accepted, and the seller agrees not to sell the property to anybody else so long as contracts are exchanged before date x. Or whatever. There are conditions. It's a way of locking both parties into the deal.

This old article explains;
http://www.telegraph.co.uk/property/3359028/Show-me-the-money.html

duchy

If you are the buyer and not the seller - there is no fee owed by you to the agent at any point.

Is this one of the reputable agents and are they members of any trade association ?

Personally I wouldn't touch them with a bargepole.

Suppose the survey came back saying the property was unmortgagable- from what you've said you'd lose your deposit.