What fresh hell is this? EA wanting £2500 up-front deposit when buying…

pinkteapot

Read the latter part of the description of this property: 

https://www.rightmove.co.uk/properties/125940293#/?channel=RES_BUY

You have to put £2500 down at the very start! Which I assume you don’t get back if conveyancing turns up problems and you pull out. 

All you get in return is 8 weeks exclusivity in which you can’t be gazumped. 

Wow.

SusieT

Sounds like a variation of the modern auction idea. This one means there is a fee of ca £400 and nothing obvious to say you get the remainder back if the survey or searches bring up a nasty, or if the valuation comes back lower and you cannot get a mortgage - or if you pull out for any other reason. I would expect most people will run away fast reading that

pinkteapot

Yep, £2500 deposit (which is part of the house price, but is paid up front), plus an additional fee to the usual ones when buying of £400 for the EA to draw up a legal agreement between buyer and seller.

House hasn’t sold and has been reduced. I’d imagine the poor vendor’s choice of agent is in no small part responsible. 

strawb_shortcake

I'd have put money on this bring Springbok. 
A family member attempted to sell their flat through these, they target those desperate to sell and promise the world and don't deliver.

pinkteapot

Good grief, just learned from reading the 1-star reviews on TrustPilot that a number of people have signed “minimum price” contracts for them to sell their house… Vendor says I want a minimum of £100k. Springbok sell it, vendor gets £100k and Springbok pocket any extra they’ve managed to get for it... In some cases £20k.  

NameUnavailable

pinkteapot said:

Good grief, just learned from reading the 1-star reviews on TrustPilot that a number of people have signed “minimum price” contracts for them to sell their house… Vendor says I want a minimum of £100k. Springbok sell it, vendor gets £100k and Springbok pocket any extra they’ve managed to get for it... In some cases £20k.  

Nice little earner, as Arfur Daley would say!

Woolsery

Springbok have been 'well-known' for years. I won't say for what to stay on the right side of libel law.

Not a single external photo of the property and the nearest Street View gets is somewhere unattractive. No details of how such a perfect EPC score was obtained, especially with such a large glass area, so I'd guess they might have an 'independent' in-house assessor.

The writing above the bed is appropriate. We can all dream and some dreams turn into nightmares.

pinkteapot

I wasn’t looking at the house to buy it. The local newspaper does “stories” (paid by EAs I assume) on “amazing” houses up for sale. Usually when a house has been on the market months and gone unsold. Saw this one featured so had a nose on Rightmove as working out what the problem is is a fun game. In this case, I’d say the EA is part of the problem. Maybe that and the proposed new coal mine nearby. 

I am enjoying the fact the agent has said "recently modernised" several times... The house was built in 2012!

strawb_shortcake

With the flat I know that they have up for sale the brief is full of holes and downright lies. Marketed as being in the city centre but actually miles away in the suburbs. 

They reduced the price without any discussion meaning that the minimum price could not be met. When instructed to stop marketing the property as they weren't happy with a significantly lower price they were ignored. Now the property has sold through another agent they are claiming a £5000 introduction fee. 

Their companies house data is an interesting read and to me throws up plenty of red flags

seven-day-weekend

pinkteapot said:

Good grief, just learned from reading the 1-star reviews on TrustPilot that a number of people have signed “minimum price” contracts for them to sell their house… Vendor says I want a minimum of £100k. Springbok sell it, vendor gets £100k and Springbok pocket any extra they’ve managed to get for it... In some cases £20k.  

When I lived in Spain (more than ten years ago now), this happened a lot.  EA values the property at  £100k, buyer agrees, EA sells the place for £150k and keeps the £50k.  Obviously British EAs are learning this from the Spanish!

eddddy

pinkteapot said:

You have to put £2500 down at the very start! Which I assume you don’t get back if conveyancing turns up problems and you pull out. 

It sounds like what's called a "pre-contract deposit".

They've been around 'forever', but very few people use them because they're often more trouble than they're worth.

If they're done properly, the deposit is supposed to cover the seller's legal costs, if the buyer pulls out without a good reason (e.g. the buyer simply changes their mind).

But I suspect some dodgier estate agents keep some or all of the deposit themselves if a buyer pulls out, instead of passing it to the seller to cover their legal costs.

And 'the devil is in the detail' - a pre-contract deposit agreement might have outragiously one-sided terms - you need to read it in detail to check.


Here's a quote from the Property Ombudsman:

Done properly, a pre-contract deposit has the potential to give a buyer and a seller the confidence that the transaction is likely to complete - the potential for gazumping is significantly reduced, as is the risk of last minute price negotiations. Whilst the TPO Code still recommends that agents should avoid the practice, it was considered prudent to set out what steps they must take when they did receive an instruction from a seller to collect a deposit from a buyer....

Link: https://www.tpos.co.uk/news-media-and-press-releases/press-releases/item/pre-contract-holding-deposits