Estate Agents Force Buyers to Pay to Get Their Offers Accepted

24/10/2017
Home buyers are advised to be careful when paying a 'Reservation Deposit' to their estate agents as the money could be being kept by the estate agent, rather than being deducted from the purchase price.

As unbelievable as this may sound, this practice is actually happening as we found out when one of our unsuspecting first time buyers was forced to pay a fee to the estate agent just to get their offer accepted. Add to this that even though the charge was an estate agent's fee, it was actually called a reservation fee.

Under normal circumstances, if you pay a reservation deposit to an estate agent, this should be held as Client Money - meaning it belongs to you not to the estate agent. The estate agent should then send the client money on to the seller's solicitor to be held on trust until the completion of the house purchase.

You can read here to find out what should happen when paying a reservation deposit.


We have specialist conveyancing solicitors who can help you if you are in this situation. Call 0333 344 3234 (local call charges apply) to find out more.

*Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels

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How does the scam work?

The estate agent in question printed the following beneath a property advertised online:

"This property has a reservation fee of 0.25% plus VAT on an offer amount that has been accepted and will need to be payable to [Estate Agent] before the property will be taken off the market."

All well and good: a reservation fee (or 'buyers fee') is part payment towards the purchase price of a property and means that a vendor has accepted the offer of the buyer paying it.

The buyer contacted the estate agent about the property in question and was invited to an open day to view the property. The buyer visited the property on the open day along with a number of other potential buyers.

The buyer subsequently posted an offer through the estate agent and was told by the agent that this had been accepted, but would require payment of the reservation fee stated above to take the property off the market. The price agreed for the purchase of the property was £215,000, so the payment required was £643.

The buyer contacted us when approaching us for conveyancing services. In furnishing us with essential facts, they explained the matter of the estate agent's reservation fee which raised alarm bells.

While it's clear that if the seller pulled out or the valuation was incorrect, the buyer would have this money refunded, if there were any legal or other issues with the property itself then there would be many scenarios where the buyer would simply lose this money. This would be the case if a survey revealed a significant subsidence problem and the buyer chose to pull out.

We contacted the estate agent to find out more about this reservation fee.

"You only paid for the viewing, stupid!"

The estate agent informed us that the 0.25% payment to them wasn't in fact a reservation fee as part payment of the purchase price, it was an ‘admin fee’ which was payable to the estate agent and wouldn't be deducted from the purchase price. The money was, according to the agent, intended to be used to cover the costs of an open day.

A seller instructs an estate agent to market their property to obtain as high a price as a buyer will pay. The estate agent can organise an open day to showcase the property to a number of buyers which encourages them to compete by placing as high an offer as possible. It is purely for the benefit of the vendor, who should therefore pay for it entirely.

It's entirely understandable that vendors - and estate agents - expect buyers to 'ready' themselves as much as possible. To be taken seriously in this market of high value commodities, they have to have mortgages in principle and are more attractive if they've already instructed their conveyancing solicitors. That said, it is well known how expensive a process buying a house can prove to be.

Any more demands on a first time buyer?

Most first time buyers are strapped for cash; they have to pay for solicitors, surveys, valuations, searches and removals. According to this estate agent, they are now expected to pay towards the marketing of a property they want to buy without any guarantee that it will favour their bid.

The Property Ombudsman has been investigating two other complaints regarding the same practice by the same estate agent. We hope that all interested readers take note of this scam and tell others. As a buyer, you're already financially stretched. Estate agents should not be adding to this with cynical scams and misrepresentation.

What can you do if you have lost money to an estate agent?

If this has happened to you then you should look to:

  • Raise a formal complaint with the estate agent; if not successful then
  • Report the estate to the Property Ombudsmen; if not successful then
  • Instruct a solicitor to help you exercise your legal rights in court.

We have specialist conveyancing solicitors who can help you if you are in this situation. Call 0333 344 3234 (local call charges apply) to find out more.

*Fixed Fee – No Sale No Fee – On all Mortgage Lender Panels


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