Being charged a pre-contract deposit as seller is doing part exchange?

Jay_Harrison

Hi, first time buyers here!
We've currently offered on a house and had an offer accepted, however getting a few warning flags on a pre-contract deposit a company called 'Moving Made Easy' are asking for!

We saw a house with an estate agent, and when we decided we wanted to put an offer in, we were transferred over to a company called Moving Made Easy, as apparently the seller is doing a part exchange on a new build. I should note that this property we want to purchase is not a new build!

So I'm assuming the seller has employed this Moving Made Easy to do all the hard work for them and not have to deal with the estate agent, fair enough...

However, according to this Moving Made Easy, the 'house builder' is asking for a £250 deposit as a 'holding deposit' and take the property off the market. I asked for T&Cs are there aren't any? They're just telling me via email that should the sale fall through via no fault of my own, or upon completion I'll get refunded. Seems dodgy to me without a contract or T&Cs?

Has anyone else encountered this and could offer any advice? Getting warning flags and not sure if we should be backing out or not! Are they allowed to charge us this fee?

Thanks in advance

eddddy

I'd agree that it sounds dodgy - and best avoided.

You can try to get them to back down by saying something like "You must have a contract to show your solicitor before you can pay the £250".

But I guess if somebody else comes along who's willing to pay the £250 deposit, they might sell to them instead of you.


...Or you can say that you want to be paid a £250 pre-contract deposit instead, in case the seller decides to back out!

Jay_Harrison

I did try to say we weren't comfortable paying without a contract, but she had nothing to offer me in regards to that and said "We have sold numerous properties for this developer and although I appreciate your concerns, I would not be requesting these funds should it be an unusual transaction" :undecided

Fire_Fox

Welcome to MSE.

Why is this request coming directly to you and not via your conveyancing solicitor? I would refer them to your solicitor.

Are you buying from the vendor themselves, or from the developer? If the developer did you know this before you offered?

eddddy

Jay_Harrison wrote: »

I did try to say we weren't comfortable paying without a contract, but she had nothing to offer me in regards to that and said "We have sold numerous properties for this developer and although I appreciate your concerns, I would not be requesting these funds should it be an unusual transaction" :undecided

So it's just a straightforward negotiation.

• They want you to pay a pre-contract deposit of £250
• You want to pay a pre-contract deposit of £0

• They will say things to try to make you pay £250
• You will say things to try to make them accept £0

Eventually one side will give in, or both sides will walk away.

It's really just a case of who blinks first.

davidmcn

Ask them to give you a pre-contract deposit of £250 in return.

ethank

Very often in these cases, the EA fees will also be paid for by the housebuilder so you might want to ask your EA if they are happy with this proposal. Developers generally will not allow a person to reserve a plot until they are SSTC. However many sales might not progress due to mortgage etc, and so they want a sign from you that you are a serious buyer.

The contract you talk about will in fact be the sales contract. Which will be provided from the seller to the purchaser via the solicitors.

Ask them to give you a receipt for the £250 - and make sure you get that to your solicitor who will deduct it from the sale price.

Comms69

Jay_Harrison wrote: »

Hi, first time buyers here!
We've currently offered on a house and had an offer accepted, however getting a few warning flags on a pre-contract deposit a company called 'Moving Made Easy' are asking for!

We saw a house with an estate agent, and when we decided we wanted to put an offer in, we were transferred over to a company called Moving Made Easy, as apparently the seller is doing a part exchange on a new build. I should note that this property we want to purchase is not a new build!

So I'm assuming the seller has employed this Moving Made Easy to do all the hard work for them and not have to deal with the estate agent, fair enough...

However, according to this Moving Made Easy, the 'house builder' is asking for a £250 deposit as a 'holding deposit' and take the property off the market. I asked for T&Cs are there aren't any? They're just telling me via email that should the sale fall through via no fault of my own, or upon completion I'll get refunded. Seems dodgy to me without a contract or T&Cs?

Has anyone else encountered this and could offer any advice? Getting warning flags and not sure if we should be backing out or not! Are they allowed to charge us this fee?

Thanks in advance

Not a chance. Tell the seller to pay the deposit

diggingdude

Do you have other options other than this house in the area if so I would suggest either you're not paying a deposit, the seller can also pay deposit, or walk away

Jemima09

I'm sure this is the company who were involved when i bought my part ex house. I remember I paid a holding deposit of £250 which was fine, and it was deducted from the balance at the end..

but there was something later down the line at completion.. they said I had to pay for work they did towards the sale, but my solicitor disputed it because it wasn't anywhere in the contracts and obviously I hadn't chosen to use them, the estate agents had just told me I'd have to pay them a deposit.

lisyloo

Fire_Fox wrote: »

Are you buying from the vendor themselves, or from the developer? If the developer did you know this before you offered?

Ive sold part-ex before (not with a middle man).
The seller is selling to the developer and you are buying from the developer.

One of the potential risks is getting reliable information.
For example if the developer is asked “is there japanese knotweed” or “have there been any issues with the property/neighbours” during your tenure then then developer can just say don’t know and no and you’d have no comeback.

I would not be paying without even a standard printout of terms and conditions.

I would consult your conveyancing solicitor and consider the risk of lack of information from a seller that hasn’t lived there.