Buying a house - Commitment fee to estate agent??

eddddy

jeffwjz wrote: »

In the hindsight, we feel tricked - is there really another buyer with a higher bid? Is the EA even allowed to disclose another buyers bid??

It would be illegal for the EA to 'invent' another offer which didn't exist - but I guess some EAs may do illegal things.

However, if there really is another offer, the EA is free to tell you what it is.

AnotherJoe

I note some of your other posts are about a house with a risk of flooding, and gambling.
Which nicely come together with the one-way bet (for the vendor) they are offering you.
Get in your canoe and paddle away.

Albala

Astonishing- they even pocket the money if the sale falls through, the seller doesn't, even if the seller has incurred costs! The more we hear about it, the worse it gets, this time for seller as well as buyer.

ACG

Mutton_Geoff wrote: »

It’s in their terms ..

https://www.loveyourpostcode.com/terms-conditions/

Commitment Fee
We have a near 95% success rate for sales completing comparing to the industry average 70%. Our sales do not fall through because our clients are financially committed to completing. The commitment is calculated between 1% – 2% of the property value. In the event the sale does not complete, the commitment fee will be used to cover our administrative costs.

I’m surprised the vendors didn’t question how this worked and whether it had the risk of putting off buyers. Unfortunately the market is full of tricks to trap the naive. My guess is they didn’t read the small print.

No wonder they state their fees as 1-3% for the vendor, they’re doubling up by charging the purchaser a fee as well!

It would be very easy to make that sound like a positive. What it does not say is how many buyers they lose because they do not want to pay £2k to send out a memorandum of sale. £2,000 in admin costs - I think I want to be an administrator at their place. The vendor pays for it to go on rightmove and the photos etc, so take out that time then there is literally the cost of:
- Taking it off rightmove (10 minutes?)
- Sending out a memorandum of sale (should we say 30 minutes?)
- Checking proof of deposit (30 minutes)
- Some calls/emails checking the offer is acceptable - lets say an hour all in.
....Less than 3 hours work, but lets round it up to 5 hours to be safe. £400 an hour for administration is not bad work.

Is it just me or does 95% and 70% sounds a little bit too rounded?

quantumlobster

Do keep us updated, OP.

"Dear EA,

A haiku:

Your commitment fee
and your solicitor can
Get in the blue sea

Love, QL"

AnotherJoe

jeffwjz wrote: »

Thanks everyone I have replied the email to reject the terms.

Jeff, have you gone direct to the vendors?

Albala

ACG, that's an important point for sellers. I for one, as a buyer, would scratch out any house on those terms. So they may have a 'high completion rate' once they have hooked a buyer, but I suspect they will be putting so many buyers off that the house will sell slower and for less. If I was desperate for the house, I might go to the seller direct, but only to say, 'let me know when you change agent'.

Sibz

You do have your own solicitors right?

k3lvc

quantumlobster wrote: »

Do keep us updated, OP.

"Dear EA,

A haiku:

Your commitment fee
and your solicitor can
Get in the blue sea

Love, QL"

That's wasting about 60 letters - only 2 words were needed :rotfl:

Mickygg

k3lvc wrote: »

That's wasting about 60 letters - only 2 words were needed :rotfl:

Foxtrot Oscar by any chance?