Holding deposit practice?
Hello to all the property118ers,
I wish to get some feedback on the demand for a holding deposit and pre-sale contract with estate agents. This comes into effect after the offer is accepted by the vendor and 1% of sale price is taken up by the estate agent as holding deposit.
This is non refundable if exchange does not offer in 28 days. I know this dubious practice was stopped by some estate agents last year but have surfaced again in west London.
I am not sure how widespread the practice is or its legal?
Thanks,
Sunny
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Member Since February 2011 - Comments: 3454 - Articles: 286
10:15 AM, 7th October 2016, About 10 years ago
28 days is no where near long enough to commit 1% to exchanging especially if you need a mortgage. What if there is a problem with the Survey, Searches or your solicitor goes off sick? What if the estate agent goes bankrupt? Who is holding the money and where?
There is no way I would pay it personally.
Member Since August 2014 - Comments: 46
2:30 PM, 7th October 2016, About 10 years ago
Thanks Neil.
I believed I submitted the best offer for the property (highest price, motivation, finances in place and track record in the area) among the final 3 bids. However I refused to pay the holding deposit. The seller is a disabled person waiting to go in care and she is handling the sale via estate agent. I think the estate agent may not be advising in seller best interest. I may complaint about them to NAEA.
I found this link in guardian about similar practice last year
https://www.theguardian.com/money/2015/may/09/property-estate-agent-pre-contract-deposit
Sunny