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Anyone had to pay reservation fee on a house purchase (not new build)

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Found 9th Feb 2013
Had offer accepted on a house (not newbuild). The agents are asking for a reservation fee (£500) with various stipulations, e.g. completion within a month. Had nothing in writing re t's and c's. This doesn't seem normal to me -- anyone else experienced this in any way?
The house was taken in part exchange by housing developers. Seems like they are passing on their normal new build processes...
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tell them to go swivel

You won't complete in a month
Edited by: "csiman" 9th Feb 2013
never seen this on a purchase only on rentals.

sounds like non refundable which means that they call it a fancy name but it may be their way of passing some of the advertising fees which the vendor should pay to the buyer. personally, i would tell them that i am not interested if i have to pay such a fee as this is not the normal practice in sales.
Edited by: "mutley1" 9th Feb 2013
Over the phone they said would get all back if survey proved to be dodgy (but didn't define what this meant). Otherwise if we pulled out for any other reason, then we'd get half back.

Wouldn't mind but it's been on market for over two months already, so what's the rush!!!!??? They started with some vague 5% deposit paid offer, which has now been withdrawn. Seem like a bunch of cowboys!!!!!

Thanks csiman and mutley1! Think advice so far is sound
wouldn't bother.
csiman

tell them to go swivelYou won't complete in a month



you will if you are a cash buyer. :-)
mooruk

Over the phone they said would get all back if survey proved to be dodgy … Over the phone they said would get all back if survey proved to be dodgy (but didn't define what this meant). Otherwise if we pulled out for any other reason, then we'd get half back. Wouldn't mind but it's been on market for over two months already, so what's the rush!!!!??? They started with some vague 5% deposit paid offer, which has now been withdrawn. Seem like a bunch of cowboys!!!!!Thanks csiman and mutley1! Think advice so far is sound



it is a buyer's market. it always is, even at the height of the market. i am a property investor so i am very familiar with the purchase process. although i have never bought a new build as i don't like that area of the market.

don't pay the fee and stick to your gun and say that you will only proceed if they waive this fee. you will try your best to complete as soon as possible since you also want it to go through quickly yourself but that a lot of what happens depend on other people like the solicitors, the mortgage lender, the surveyor etc but for your part you would certainly act quickly.

they may have had a lot of time wasters so they want to make sure that you are serious. they normally ask to see evidence that mortgage proceedings are happening within a few weeks to demonstrate that you are serious as the buyer can pull out at any time.
Never heard of this happening before and a month seems a very short timespan for completion, especially when you have no control over how quick your bank processes the mortgage.
I've seen this once on Scotland. The property was advertised by an auction house/estate agent and they stipulated that if you bought before the auction date, you would have to pay deposit money up front, just as you would have if you had won it in an auction. This was a friend and the amount was 10% as I recall.
Contact the vendor direct & tell them you're not willing to do this. It isn't standard practice & the vendor probably doesn't know anything about it.
Hi,

I am familiar with this process because I had to pay £500 reservation fee through a house purchase that was a part exchange deal.

Although I did manage to complete the purchase in the time period stipulated (i took a gamble). I only managed it because I used the same solicitors that the previous owner had used therefore the majority of the paperwork was already with the solicitor (although this helped the solicitor ie less work for him I still had to pay the extortionate solicitors fees).

My advise is, only go ahead with it, if you are confident that you can meet the T&C's, It is very tough and stressful to purchase a property even more so with additional pressures of completion in a tight timeframe.

Hope this helps!

c_bigbear

you will if you are a cash buyer. :-)


I wish
conveyancers will always find a way to screw things up
Edited by: "buddhabelly" 9th Feb 2013
c_bigbear

you will if you are a cash buyer. :-)


good luck trying to get a solicitor to complete all surveys / searches and complete within a month
I am a property investor and last year i bought and sold 9 different properties, i've never heard of a £500 deposit or 4 week time line. The quickest i've ever bought a second hand vacant property was 6 weeks. The mortgage companies are well renowned for being slow and getting surveyors is usually down to the mortgage company. Also the solicitors want to double check lots of information and they can't guarantee how long things will take.
It's a buyers market out there and stick to your guns. The seller may have been let down by a buyer before but that's not your fault. As with any transaction it's trust. Go see the estate agent, give him your solicitor details and undertake you want the purchase to go through asap as well.
Good luck.
Thanks to everyone for their responses. Interestingly, we went for a second viewing today, house now empty and we identified £2k worth of work at least that needs to be done. So, if anything, we'll reduce our offer and then tell them to take a running jump.
I was asked by the agent to provide £1K as advance to show that I was serious in buying. I showed him and the vendor my deposit in bank though they decided to go with another buyer who was willing to pay that. So it does happen where the agent asks for a deposit to ensure certainty of transaction. This is in Greater London area.
absolutely no chance you could complete within a month. If the agent works in this way i'd stay well clear. Good luck!
Sounds like the vendor is scamming. You default on completion date, bye bye money. Nothing to stop them doing this over and over again to many people.
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