Reservation agreement, purchase of older house.

Dollshouse

I've searched the forum and can't find anything about this.


I'm trying to buy a house (not new) and I've been asked to sign a Reservation Agreement and pay a fee. The fee is a whopping 2% which goes to the estate agent and is non-refundable. In other words it is part of his fee.


If I sign the sellers agrees to take the house off the market for 4 months. What is stopping me is that it is only refundable if the seller withdraws. It is not refundable if the sale does not go through for any reason other than that.


Apparently these agreements are a new thing. The seller is also paying a fee and I don't know how much they are paying. Both fees go straight into the pocket of the estate agent and are not refunded to either party if the sale goes through.


It looks like I'l have to sign and pay if I want the house. It seems like a racket and risky. What do I do?

davidmcn

Buy a different house.

hazyjo

Give your own terms. It's hard enough selling houses - the sellers and EA are losing a massive chunk of the market. I'd not touch it with a bargepole. They will undoubtedly have probs selling it.


I would say you're not buying under those terms, so either come back to you when they change agents (although you may still owe the old ones a fee, so check carefully!), agree a substantial discount, or wait until it's been reduced.


Cutting their nose off to spite their face springs to mind...

boo_star

I'd walk, after making it clear to the EA exactly why I was walking. Hopefully if enough people do that they'll knock it on the head.

The fee itself is ridiculous but not refunding it on completion is bonkers.

G_M

Put a letter throught the house letterbox to the seller telling them exactly why you are no longer interested in buying their property.

Dollshouse

I've been looking for the right house for years and this is the one.

Bollo2019

That is a lot of money to put down before completing - you might think the house is the one now, but once you do a survey you never know what might spring up and circumstances / perceptions can change quite suddenly.

Out of curiosity, say if you are caught up with searches, solicitors queries, mortgage lender terms and applications and don't manage to complete within the 4 months, are you then out of the negotiation or is the seller than just able to put it back on the market and see who can complete on it first?

I have a suspicion that the seller won't be paying a fee as high as 2%...

Dollshouse

I'm a skilled joiner for 40 years, I don't need anyone else to survey it. There are no chains on either side.


If completion does not take place in the period the seller can either extend the period or just walk away and put it back on the market.

SallyDucati

when I was selling my flat one of the agents I got round used this method. He basically said if a buyer wants it enough they'll pay and it costs you less. I didn't like the idea of it and thought I'd be counting out quite a few buyers, so went with an agent with a traditional charging method even though it cost me more.

davidmcn

SallyDucati wrote: »

when I was selling my flat one of the agents I got round used this method. He basically said if a buyer wants it enough they'll pay and it costs you less.

Not if buyers simply deduct the extortionate fees from their offer.

SallyDucati

davidmcn wrote: »

Not if buyers simply deduct the extortionate fees from their offer.

Which is what would possibly of happened, I just didn't like the idea though. As it was with a traditional EA charging arrangement I got over the asking price.