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Conditional Selling???

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  • Conditional Selling???

    Hi, I am selling my property and have been approached by an estate agents about a deal they are offering. They are saying if they can get me an offer on my property within 5% of the asking price within 20 days then I pay them their fee but if they sell it outside of the 20 days then I don't have to pay them a fee at all. The small print is that I must use their mortgage broker and solicitors. If I don't then they will charge me £300 for each agent I source myself. Is this conditional selling?

  • #2
    Re: Conditional Selling???

    With regards to the 5% 'deal', it doesn't sound too bad and in theory, although I don't know your expected value, looking at the variety of figures I've shown below, chances are you could receive an offer that is within 5% of your sale price.

    £100,000 - 5% = £95,000
    £125,000 - 5% = £118,750
    £150,000 - 5% = £142,500
    £200,000 - 5% = £190,000
    £250,000 - 5% = £237,500
    £350,000 - 5% = £332,500
    £450,000 - 5% = £427,500
    £500,000 - 5% = £475,000
    £750,000 - 5% = £712,500

    Worth remembering that a lot of people have it in mind that if they are going to make an offer, will usually offer between 5-10% of the asking price. Plus, make sure the agents put it on at its true value that YOU want and not they immediately suggest because they may be pricing it in order to get an offer in that 5% bracket.

    With regards to you using their mortgage broker and solicitors, that for me would make me say thanks but no thanks. A property I purchased tried to get me to do similar with a £1000 incentive, ie, if I use their broker and solicitors, they will knock £1000 off the purchase price. That to me sounded great, but when looking at the other costs involved, the broker was £300 just to use their service, if the mortgage they sorted was agreed, I had to pay them a £150 commission fee, and that's in addition to the standard mortgage application fees, so that alone is £450 for their broker. In addition, the solicitors required a £150 application and admin fee to secure their service, so that is £600 so far. On top of that, when speaking to solicitors about costs, they were actually nearly £800 MORE expensive than any other solicitors I'd had quotes from, plus others I'd used before and therefore it actually worked out that it was £1400 more than I was expecting but minus the £1000 reduced value, it was still me forking out £400 more than I wanted.

    Needless to say, I didn't accept the offer, paid the full offer price so no £1000 reduction, sourced a mortgage broker and solicitor who didn't need any upfront fees and the broker was paid commission by the lender, not me and in total it save me about £600.

    Therefore, worth looking at ALL associated costs because if they do scrap their fee for you, you may be making up for that loss by paying increased charges associated to their 'other' services. Very sneaky process and no doubt a lot of people get caught so good luck!