Property reservation fee

drexb5

Hello,

I paid £1k reservation fee for a property I want to buy. I am a first time buyer. And I had an agreement in principle.  Unfortunately later down the line I was not able to secure a mortgage, on this basis can I get my reservation fee refunded. 

The terms of the contract said that the fee would not be refunded if I or the seller withdraw from the sale or a deal is not closed with 2 months ~

NameUnavailable

The terms of the contract said that the fee would not be refunded if I or the seller withdraw from the sale or a deal is not closed with 2 months ~

What part of this isn't clear? You are withdrawing from the purchase.

However, why did you have to pay a reservation fee in the first place? Was this a modern method of auction sale?

GDB2222

drexb5 said:

Hello,

I paid £1k reservation fee for a property I want to buy. I am a first time buyer. And I had an agreement in principle.  Unfortunately later down the line I was not able to secure a mortgage, on this basis can I get my reservation fee refunded. 

The terms of the contract said that the fee would not be refunded if I or the seller withdraw from the sale or a deal is not closed with 2 months ~

If it's a new build, you should have a reservation fee agreement. Perhaps you could put a photo of it here, in full, but with personal details blanked out. 

drexb5

NameUnavailable said:

The terms of the contract said that the fee would not be refunded if I or the seller withdraw from the sale or a deal is not closed with 2 months ~

What part of this isn't clear? You are withdrawing from the purchase.

However, why did you have to pay a reservation fee in the first place? Was this a modern method of auction sale?

No it is with an estate agent. I have been looking for a property for a while and they suggested to put a reservation fee so someone else does not take the property. 

It is because i am not voluntarily pulling out but my inability to get a mortgage, despite the agreement in principle i got turned down at a later stage.

AdrianC

drexb5 said:

It is because i am not voluntarily pulling out but my inability to get a mortgage

You are pulling out.

It is not an issue with the property or with the vendor that is causing you to pull out.
It is an issue entirely on your side.

eddddy

Hmmm... having looked at that EA's website, personally, I would tend to steer clear of buying a property through them.

And I definitely wouldn't use them if I was selling. They seem to use the same business model as "quick sale" and "we buy any house" type companies.

Did they want to do a "back to back" sale to you? Is that why you couldn't get a mortgage?



(If it was a "back to back" sale - and they took £1000 off you without warning you that getting a mortgage would be very difficult with a "back to back" sale - that's almost certainly worthy of a complaint to the Property Ombudsman. 

If that's the case, I think there's a reasonable chance that the ombudsman would tell them to give you your money back.)

GDB2222

https://www.bettermove.co.uk/

These people?

I can't see anything wrong with the agreement above, I'm afraid. It might be worth asking a solicitor, if the reservation fee were larger, but probably not for £1k.

As Ed says, it depends whether there was something about the property that prevented you getting a mortgage?

drexb5

AdrianC said:

drexb5 said:

It is because i am not voluntarily pulling out but my inability to get a mortgage

You are pulling out.

It is not an issue with the property or with the vendor that is causing you to pull out.
It is an issue entirely on your side.

Thank you for clarification

drexb5

GDB2222 said:

These people?

I can't see anything wrong with the agreement above, I'm afraid. It might be worth asking a solicitor, if the reservation fee were larger, but probably not for £1k.

As Ed says, it depends whether there was something about the property that prevented you getting a mortgage?

Thank you, i will find out from the broker but i doubt there was anything wrong with the property. 

drexb5

NameUnavailable said:

The terms of the contract said that the fee would not be refunded if I or the seller withdraw from the sale or a deal is not closed with 2 months ~

What part of this isn't clear? You are withdrawing from the purchase.

However, why did you have to pay a reservation fee in the first place? Was this a modern method of auction sale?

No it wasn't, it was so i dont lose the property to someone else.

DayDreamerandGeneralWaster

They sound like cowboys.